When we talk about funding for charities and not-for-profits, many of us still default to the traditional model of donations, grants, and fundraising events. That approach can be powerful, but it is only part of the picture. A growing number of organisations are blending those familiar methods with a newer paradigm that treats their purpose as something to partner with and invest in, not simply to sponsor. By exploring tools such as impact investment, social enterprises, and income generating assets, it becomes possible to build more sustainable models that sit alongside, rather than replace, the old funding routes. Below are examples of some funding sources.
Under old paradigm: this is a continuation of an older charity mindset that asks people to donate to a cause and involves:
- asking for donations from the public
- running events, fundraisers, or dinners
- seeking grants from local government
- seeking funding from central government directly, if there is a relationship with a department
- lottery grants or community organisation grants
- apply for funding from privately endowed foundations (check their criteria)
- Iwi-based organisations
- approach community foundations (often a regional focus), energy trusts, or gaming trusts
Under new paradigm: seek partnership via impact investing and look for ways that a business element could be combined to ensure sustainability, such as charging for services or goods, or creating an asset of value. This is hard work but it is often a more long-term approach and can be done in combination with more traditional approaches. This could involve:
- a start-up that creates an app to generate income, while also advancing purpose
- a business that employs the people you want to help (for example, employing former prisoners)
- providing an investment opportunity for property with housing or temporary accommodation, where income is also generated while the purpose fulfilled
For further information, an overview report with examples from the Centre for Social Impact is here.
