Where can I find a grant to fund our operations?
In short, you probably can’t. In today’s grant-making environment, it is extremely difficult to find funding to support the ongoing operations of an organisation. This really is a ‘unicorn’ grant and most commonly you’d find them associated with research type organisations (for example, there are a few federal grants for agricultural research-related organisations but even these are dwindling).
Aside from them being rare, I’d venture to suggest that operational grants are not terribly desirable as they generally see you locked into spending money as dictated by a government agency and often having to adjust your focus to meet their priorities (not to mention messing around with the documentation required to acquit them). Your organisation can also become very dependent on the grant and certainty can never be assured of operational funds beyond the term of the grant and/or an election cycle.
So if not a grant, how can you secure funding for operations?
Corporate Sponsorship
Some organisations try to leverage corporate sponsorship. Don’t get me wrong, corporate sponsorship can be very useful. But it is not a great strategy to be significantly reliant on this. It takes a lot of work to secure an initial commitment, with ongoing work to nurture the relationship to maximise the likelihood of the organisation continuing its sponsorship arrangements with you.
Like grants, corporate sponsorship reliance can result in major challenges if a corporate partner changes their giving plans. Developing a solid corporate sponsorship strategy is useful but shouldn’t form the core of your operational budget as this puts the organisation’s sustainability at risk when the priorities and budgets of your sponsors ebb and flow.
Membership Fees
Another option is membership fees. Depending on your membership base, can you gather more from this source? Options could include:
- A low fee, marketed to many people (relying on volume to build income).
- A moderate fee, marketed to a smaller but still significant group.
- A high fee, marketed to a niche group.
- A multi-level approach, with a range of price points (and associated benefits).
In order for a membership strategy to be effective, you will need to combine excellent marketing (a compelling reason to join) with value (either direct value for the member or clarity about how their membership will benefit those the organisation aims to assist).
Profit Generation
If your organisation is a not-for-profit, this doesn’t preclude you from making a profit, just from dispersing it to owners/shareholders. By definition, a not-for-profit must instead reinvest profits into the purposes of the business. So that’s great news – you can make money! This is our number one preference for organisations wanting to be sustainable.
But how could you generate profits? There are lots of ideas, but here are a few ideas to get you thinking:
Reviewing your service pricing: Are you leaving money on the table? Are people turning up to your subsidised service holding a take-away coffee or talking about other discretionary spends? If they are, that’s an increase in pricing your market could probably have borne. Worried about some people missing out? Perhaps offer scaled pricing with discounts offered to people with health care cards or another mechanism that could indicate hardship. Or you could adopt the more novel approach of asking people to ‘pay what you were worth’ – you might be pleasantly surprised by the outcome (and if you’re not, perhaps it’s a hint to check you are delivering value!)
Corporatised services: What is your organisation great at? Or what are your team’s (or members’) under-utilised talents? Can you develop a profitable business area that isn’t necessarily directly connected to your main purpose (although it might be)? Where is the intersection of your skills and market demand? There’s no sense in offering something you can’t make a good return on, so a strong business plan is important.
Events: Running events can be lucrative, but remember to carefully look at the cost of staff time as well as actual expenses to ensure that it is ‘real profit’ that you are banking.
What next?
If your organisation is struggling to source operational funds, it might be beneficial to conduct a business-minded review into your operational model and look at how you can operate in a financially sustainable manner. Grants and sponsorship, if you can get them, might yield short-term results but ultimately will see you on a tiring treadmill of constantly chasing funds rather than having a value proposition that puts you in control of ‘earning’.
Want to get some advice on funding for operations? We’re here to help. Get in contact and we can have a chat about ideas that might suit your organisation.
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