Succeed at Mission and Money
A snapshot of our learnings from developing commercial income in the charity sector.
‘Everyone agrees on the burning platform. The practical approach to creating new income streams, knowledge, experience, expertise, is what’s more difficult.’
Clare McDermott, Commercial Director at Help for Heroes
Like many, we know there are opportunities for charities to generate income beyond traditional fundraising.
At Good Innovation, we’ve been exploring these opportunities over the past 5 years, initially through our 3-year charity collaboration, Good Lab, and more recently working with individual charities to develop and launch commercial ventures.
We’ve seen successes - ideas that have raised millions in investment - and failures - ideas that never make it beyond a board paper. Importantly, we haven’t seen the successes in the sector that we’d hoped for.
So, a few months ago, we set out to understand why. What’s holding our sector back when it comes to commercial income? What do we need to be doing differently?
We spoke to 30 organisations from within and outside the charity sector, to hear their thoughts on the challenges of commercial venturing.
One thing was clear - it’s not the quality of ideas, or the strength of opportunity that is proving a barrier. While no organisation is the same, we heard shared challenges across the organisations we spoke to.
Here are some of our key learnings as to why the sector is failing to maximise commercial opportunities:
Big Picture Strategy - Understanding why you’re doing this.
Charities want and need to diversify their income outside traditional fundraising methods. But they aren’t yet clear on what they’re looking for when it comes to commercial income. They haven’t set a clear, realistic ambition, or considered the balance between delivering on mission or delivering income.
Resource and investment is needed - but how can organisations ensure they are set up for success?
Making ideas happen - Avoiding organisational treacle.
Excitingly, there isn’t a lack of ideas within organisations. While making sense of where opportunities lie remains a challenge, the biggest barrier to commercial success is organisational treacle. Venturing takes an entrepreneurial approach and mindset, and many charities aren’t set up to function in this way.
How can charities rethink their approach to ensure good ideas don’t get lost in project management?
Capabilities and culture - Getting governance on board, and developing the right skills and culture.
We heard stories of commercial ideas being shut down before having a chance to test their full potential. Stories of risk-averse boards preventing release of funds, or internal trail-blazers coming up against unrealistic KPIs.
How can organisations make sure they have the relevant skills and experience to turn ideas into income?
But, it’s not all doom and gloom. We also spoke to some charities who are doing this well. Our founder, Andrew Bathgate, interviewed Iain Foulkes, CEO of Cancer Research Horizons about the approach at CRUK.
Our Mission and Money report sets out 18 recommendations to help charities think about how to tackle these challenges. You can read the full report here. (Or email us to receive a printed copy).
If you’re curious about our findings, we’ve been hosting 45-minute sessions with charities interested in commercial income opportunities, to share our lessons in detail.
Our conversations so far have continued to resonate across the sector, so we’d love to hear from more organisations keen to tackle their challenges.
You can reach out to Andrew at andrew@goodinnovation.co.uk.