Third Sector Income Generation

Whether your charity generates its income from Endowed Funds that have been invested; local authority service level agreements; trading activities; or from fundraising from the public, its ability to generate income at pre-2020 levels will have been affected.

Share values fell dramatically early 2020 and dividend income continues to be depressed; rental incomes are also suffering as landlords receive requests for rental holidays, or deferment and even loss of tenant. Charities that rely on their investments to fund activities may continue to see a fall in income over the coming months.

Whilst there was an initial increase in donations at the start of the March lockdown, large fundraising events such as the London Marathon being cancelled have caused a significant fall in charitable giving with predictions that the UK third sector will have lost around £10bn in donations this year.

During the last financial crisis, charitable giving fell by 11%; with predictions that we could be facing a post Covid-19 recession, Charities need to be thinking now, about how they will be generating income in such an environment.

Trustees should consider:

  1. Donor engagement and understanding your donors

    To make good decisions, Trustees need to have accurate budgeted income information and key to this is understanding the Charity’s donors, whether they are large corporate donors or individuals. Now more than ever relationships with donors is critical and it will be important to take them on your journey and to share your news and activity with them.

  2. Fundraising

    How will your charity meet any projected shortfall of funding? Do you have a plan?
    Would the services of a professional fundraiser or bid writer be a way to address the shortfall? Buying in a day a week or other short term period could allow you to get maximum return on applications for funding.

If this is an area you wish to explore please contact Deborah Austin in our specialist charities team