The funding challenges of today’s market leave many charities in a tough position. This often drives them to pursue activities that diversify away from uncertain public funding and ensure more flexibility in their operations. This necessity has led to an increase in the competition of trading activities amongst charities, leaving each charity little choice but to spend time better understanding what unique solutions they can bring to the market.
Trading activity can be an important source of any charity’s income growth, but only if planned thoughtfully. An easy trap for those new to trading is sticking to models that others have executed successfully. This approach triggers more copying than innovation, doesn’t employ the real strengths of an organisation, and ultimately reduces their chance of success. An example is the popularity of the Business-to-Consumer (B2C) model. While this business model may feel more familiar to many charities, there is a significant consequence in overestimating brand power in the market. This can severely distort the perception of the true viability of B2C as a trading venture. Carefully considering the higher risks inherent with B2C models could lead many more charities to engage in alternative ventures better suited to their strengths, such as Business-to- Business (B2B) models.
How do you recognise which of the countless market opportunities, options, and approaches are right for you?
To help, TSIC has created a tool to assist charities in ensuring that their revenue generation initiatives have the greatest chance of success. This is achieved by narrowing down on a market competitive product or service that they have or could develop the ability to deliver successfully. Our tool, TSIC Unlocked, provides the structured methodology to help charities tease out and better understand their true strengths.
We can share a few lessons with you from working with clients on the path to creating business models:
1. Don’t fall into the trap of copying the success stories of others.
Other charities success with one model does not ensure it will be a perfect match for you. Successful endeavours in revenue generation mirror successful businesses—they play into the unique strengths of the organisation.
2. Do take time to estimate your organisation’s unique strengths.
Using a tool such a TSIC Unlocked can open a space for you to better assess and understand which exceptional ventures suit your strengths best.
3. Do answer the follow questions first when considering any new trading activity:
- What is the service or product you aim to provide?
- Who is it for?
- Who pays for the service?
- How is it linked to your charity’s mission?
While taking the time to evaluate your strengths and craft a creative trading venture can seem tedious, especially when it is seemingly easier to borrow from existing examples of success, we believe that this exploration of creatively tailored business models is essential to outshine the competition.
The Social Investment Consultancy (TSIC) operates at the intersection of the for- and non-profit worlds, dedicated to helping charities and businesses maximise their social impact. The latest models of social enterprise, revenue generation and social investment, and the integration of skills and expertise from across the public, private and third sector form the basis for our work.
TSIC’s research, Charities Unlocked: Progress and Potential for Charity Revenue Generation which analyses the growth of various models of charity revenue generation will be launched this month.