Now I’m not one of those who sees the government (of whatever colour) as the Devil incarnate, but recent warnings about the risks of state funding cuts for charities do make me think “I told you so”.
For the last five years or more, our friends at ACEVO have been encouraging charities to cosy up to government and become just another delivery channel for public services, the idea being that government can supply all the funding need. But now the tide of public funding is about to turn – and next April it could go out a long way!
The lesson we learn from this is an old one of course – don’t put too many eggs in one basket – or, in fundraising speak, make sure you have diversified your income streams properly to reduce the risk to your organisation.
This is not just an issue with public service delivery charities either – I am often surprised how dependent clients of ours can be on just one or two sources of funds – whether it’s trusts, individual giving, community fundraising or any other income stream. So I’m always looking to see how balanced their fundraising mix is and therefore what level of risk they are taking.
Diversification is such a fundamental element of risk management in fundraising that perhaps the IoF should make all its Certificate students write out 100 times “Diversification reduces risk”!
Don’t get me wrong – we do need to take risks as fundraisers, but these relate to trying new ideas, to testing new markets and techniques – not to sticking complacently to the same methods and funders(governmental or otherwise) or looking for some magic funding bullet, because these don’t exist!