Thinking about a wider range of funding sources can help your organisation diversify its income and become more financially sustainable in the long-term. There are many funding sources to consider and various diagnostic tools to help you find the right funding mix.

Grant funding

Most voluntary and community organisations could not exist without grant funding in some form. Grant funding can be valuable way of enhancing budgets to solve specific problems or to take forward an innovative new approach.

Many organisations, unfortunately or unnecessarily, depend on grants entirely. Keeping all your eggs in one 'funding basket' is not recommended. Funders are the first people to discourage you from becoming dependent on them. Rather than relying on one large Big Lottery Fund grant you could think about approaching charitable trusts and foundations such as the Lloyds TSB Foundation or Comic Relief.

Giving and public fundraising

Giving and public fundraising is about asking people for money or donations to continue the charitable aims of the organisation or to run specific projects. There are many ways to generate income through giving and public fundraising, for example membership fees, street collections, fundraising events, payroll giving, Gift Aid, legacies and corporate sponsorship.

Hidden assets

Assets, both physical and invisible, can be used in a variety of ways to assist voluntary and community organisations achieve long-term financial sustainability. Underused equipment, room space and staff skills can be used to raise income. You could rent out that spare office as public meeting space, allow members of the public to use your photocopier or fax for a small fee, turn that unused computer room into a resource centre for the community or provide administration services for other organisations in the area.


Trading is not about turning voluntary and community organisations into commercial businesses, but enabling organisations to become more financially sustainable by exploiting opportunities for trading.

There are many different types of trading but all are associated with selling goods or services on the open market. Think about what you can sell. What assets do you have? This could be people, property or skills. How can you sell it and who will buy it? Think laterally to get the real value from your assets.


Procurement and public service delivery is an evolving process within the third sector. The delivery of public services under contract is one option that voluntary and community organisations may consider to earn income. Public service delivery offers many opportunities and longer contracts than traditional funders. However, the process is legally binding for both parties and you should choose contracts carefully, making sure the intended outcomes are in line with your organisation's mission and aims. You should also make sure your organisation has the right skills and resources to tender for and manage public sector contracts.

Loan finance

The availability and accessibility of loan finance to voluntary and community organisations has increased considerably in recent years. Loans are used where large amounts of money are needed to purchase property, land or equipment, or to establish new projects and ventures. Alternatively, as organisations develop new income streams, such as contracting or trading, they may also require significant investment to create new services. Wherever investment is needed to drive organisational growth loan finance may be a viable option.

Loan finance is not an income stream but a financial enabling tool. It is not a replacement for grants but is simply seen as another way to finance an organisation. Loans can benefit the sector in many different ways but are not appropriate for everyone. Loan finance should only be considered if it will benefit your organisation and appropriate structures and systems are in place to repay it.

If you would like to know more about sustainable funding or ideas on how to diversify your funding mix please contact us or your local county voluntary council.