6 Points to Consider When Looking to Grow or Diversify Your Income
In today’s competitive funding climate, social enterprises and charities are looking for ways to ensure a more sustainable future for their operations and impact. This often means more self-reliance from organisations when it comes to generating the money required to create their desired social impact. In this blog, we share our top six things to consider when revamping your income for impact.
We know it can be intimidating for social enterprises and charities to make the shift from being grant-reliant to self-sustaining. However, considering these top tips should set you up to make the right decisions when seeking sustainable income and, therefore, sustainable impact.
Appreciate that your income is for impact
It can be easy to forget that your income is there to fuel the impact that you’re creating. It is not a necessary evil, but rather an empowering enabler. Keeping your social or environmental aims front-of-mind when exploring new income opportunities will help drive your enterprising attitude towards income for impact.
Understand your current financial mix
Before making any changes, it’s important to understand where your income currently comes from. There are three steps to this;
- Firstly, what income streams do you currently have? This might include grants, donations, social loan investment, trading etc.
- Secondly, what is the proportion of each of these? You may wish to work out what percentage each income stream is of your overall income.
- Lastly, how diversified is each income stream? For instance, is 60% of trading income generated through one customer?
Once you understand the makeup of your current financial mix, you will have a better grasp of the financial risks and sustainability of your organisation.
Be inspired by others
In our opinion, competitor research is very under-rated. There’s so much to learn by simply investigating what others in your space are doing; and this includes how they’re funding their impact.
While all organisations are different, researching what other social organisations are doing will likely offer insight into how successful different income generating activities could be for you. At the very least, it’s likely to ignite ideas or inspire you to explore new income avenues.
Think outside the box
Growing or diversifying your income doesn’t always mean doing something completely new. The social sector is unique in that, while we’re all driven by our own social mission, the paths to achieve this often overlap between organisations. This means there’s great potential for organisations to work in partnership and combine resources to achieve collaborative impact. Be sure to explore partnership opportunities with your network for additional income and impact possibilities.
Define your ideal financial mix
Having determined your current financial mix, obtained an understanding of what others are doing and an awareness of your options, you will now need to agree on your ideal income mix. This will also involve identifying your investment and risk appetite; which might call for a cultural shift and internal buy in before moving forward.
Allow for change to be a process
When looking to grow or diversify your income, you need to acknowledge that it will not happen overnight. Allow your organisation a realistic length of time to find the right financial mix, make the relevant adjustments to the wider business and settle into a new approach.
Remember to think about your social enterprise holistically; a change in your approach to income might require adjustments in strategy, operations or governance; and this can take time to get right.
At SIS, we love nothing more than seeing incredibly impactful organisations growing their income generating activity so that they can grow or protect the social or environmental impact that they’re creating. Looking to grow a sustainable social enterprise? Check out our ‘9 Building Blocks for a Sustainable Social Enterprise’ blog here.