The commercial value of charities: Why business acumen may be the best donation

By Frank Nigriello

The charity sector makes a distinctive and widely recognised contribution supporting or replacing activities often delivered by the NHS, social care and education, and other agencies. As government-owned services are constrained, charities have filled gaps and extended their services.

The post-pandemic environment poses a significant challenge. For example, pressure on funding and demands on services has intensified due to a reduction in public spending. The conditions around the COVID-19 pandemic have reduced, and in some cases eliminated, opportunities for traditional fund-raising activities as people are unable to join together for events, and corporate donors are more cautious about the outlook of their own businesses.

While sometimes strongly resisted by the charity sector, shifts in management, accountability, and governance systems may be required to manage the current limitations to fundraising opportunities.

At the heart of revitalising the charity sector may be the oldest principle that has guided success in the commercial sector: understand the value your organisation creates and optimise it.

There is a range of tried-and-tested disciplines for assessing value, segmenting audiences, and ‘delighting customers’. Underpinning all of these is an acceptance of a need for change, a willingness to improve activities for which there is ‘pull’, and identification of the sacred cows that are ready for the barbecue.

Peculiar to the charity sector, perhaps, is the proliferation of small, boutique organisations focused in similar areas and often sub-optimal in their delivery. Within Oxfordshire there are several charities with a focus on mental health, for instance. Would specific services be enhanced and costs more significantly contained if these charities merged resources?

Similarly, charities have been reticent to adopt commercial practices that could provide higher value for their ‘clients’ and increase revenues. Most charitable service delivery is underpinned by people with significant levels of knowledge about their field. This knowledge can be commoditised and ‘sold’ in various ways.

A large youth charity, for instance, amassed a wealth of knowledge about developing children and young people through activities that would not be provided through the education system. When challenged several years ago to codify these activities into e-books that could be sold for a nominal amount through an eCommerce facility on the web, the staff nodded appreciatively but did nothing.

For cancer charities to ‘sell’ materials on how to organise finances when beginning palliative care may be too difficult. But to gain revenue from advertisers who might offer much needed commercial service to people in that situation (eg will writing) would deliver benefit to the client and ongoing forms of revenue to the charity.

There are many traditionalists in the charity sector who will find this framework to be distasteful, possibly distressing. But as support from the commercial sector and from individuals is likely to become more constrained in post-pandemic Britain, can the charity sector rely on tradition and goodwill to fund the services that are often critical to the communities they serve?

Charities may be far better taping into the resource of business marketing specialists to help identify and present revenue-earning value propositions to their target markets. It’s often far easier and more effective to ask for a leg up instead of a handout.

Through the National Business Response Network from Business in the Community, charities can find a way to connect with business people to tap into the creativity, business acumen and specialist skills that could make all the difference. To learn more about the National Business Response Network visit https://businessresponsecovid.org.uk/

Frank Nigriello is chairman of the South East Leadership Board of Business in the Community and chairman of Oxfordshire Business First.