A Means To Diversify The Funding BasePresentation to Common Cents Conference 2011

12 May 2011

Presentation By Hugh O’ReillyBusiness Development Executive, The Wheel

About The Wheel

VisionOur vision is of an Ireland with a vibrant and dynamic community and voluntary sector, as united as it is diverse, operating at the centre of Irish life and decision making as a necessary part of a healthy democracy.

MissionOur mission is to strengthen the community and voluntary sector, focusing on organisations that seek to create a better world.

The Wheel is the largest network of charities, community and voluntary organisations in Ireland.

The Wheel: A Snapshot■ Our membership totals 917 organisations. ■ The Wheel’s directory holds contact details of 10,796 charities, community and voluntary organisations.■ 63 events, conferences and workshops hosted by The Wheel in 2010 with 2,132 attendees. ■ 822,442 numbers of pages visited on www.wheel.ie in 2010.■ 6,014 hard-copy and 17,126 soft copy distributions of Le Chéile, our high quality sector magazine in 2010.■ 564,090 number of emails sent communicating with the sector in 2010.■ 95.1% of membership who believe our membership programme is good value.■ 1,548 copies of our good practice guides sold or distributed in 2010.

• Priority since 2003 that core, sustaining support for The Wheel must be developed from its membership

• A total of 25% (or circa €250,000) of income in 2009 came from members and others in the sector via earned income

• Yet The Wheel has traditionally relied on a large proportion of its annual core funding (of between 40% - 50%) to come from statutory/government grants to meet service demand

• Breakdown of 2010 Income

*National Training Fund Allocation

Income Diversification Context

Total Funds Core FundsStatutory Grants & Funding 63%* 48%Membership Fees 11% 15%Additional Grants & Sponsorships 12% 17%Contributions from Meetings & Events 7% 10%Other Earned Income 7% 10%

Total: 100% 100%

Income Diversification Context

2007 93%2008 100%2009 86%2010 84%2011 ???

2007 100%2008 91%2009 91%2010 87%2011 70% (80% TBC)

• High water mark in Statutory Funding reached in 2007

• Overall income high water mark was in 2008

• Plainly told The Wheel brought in €181,347 less in 2010 than it did in 2008

Would make you want to…

What to do?

• Step 1: Engage The Board, get working on a plan

What to do?

• Step 2: Scope The Task• The Wheel’s objective is to serve our members in two primary ways: helping

them to get their work done and representing their shared interests to government and other decision-makers

• Looked at the core budget and resources needed to deliver on the mission over the next three years

• Looked at the likely funding available to do so. Assumptions were made that:• The Wheel will continue to grow its membership numbers year on year

and will thus bring in an income from this activity (Law Society of Ireland 49% of income generated by member and subscription fees)

• statutory income will be reduced by 50% in 2011 and repeatedly in subsequent years also

• All costs associated with non-core funded schemes were not included and it only concerned our “core funding” needs as per our current business model.

• When the projected income was deducted from projected core expenditure we were faced with a deficit/shortfall projection of close to €500,000

Another moment to…

What to do?

• Step 3: Assess Your Options

• Look at the core mission of the organisation and assess the services provided to deliver that mission

• Assess ALL the ways your organisation can generate income. Rule nothing out initially but go through each systematically before you focus on the core sources available to you

• The WheelSource Assessment1. Individuals Via Membership – Excellent

Via Major or Special Gifts – LimitedVia Traditional ‘Annual Giving’ – Poor

2. Foundations and Trusts

Via one-off project funding – GoodVia unrestricted Support – Poor

3. Corporations Via sponsorship – GoodVia one off project gifts – GoodVia unrestricted support - Poor

4. Organisations (both C&V as well as other nonprofits)

Via membership – Good to ExcellentVia restricted project support – FairVia sponsorships – Fair to Good (co-sponsorships)

5. Government / EU Via unrestricted core support – Reducing, but goodVia restricted project support – Very GoodVia unrestricted project spport – Fair to Good

What to do?

• Step 4: Develop Actions• The Wheel identified 5 core areas or strands where they could hope to develop

and diversify the income streams of the organisation

1. Focus on external relations to advance the organization – through significantly increased networking and contacts-management opportunities for the organization in general as well as for funding will be identified.

2. Focus on incrementally growing the ‘earned income’ capacity of The Wheel by setting challenging targets in a number of areas: training income, selling publications, advertising and consultancy income.

3. Focus on growing the membership base and doubling the numbers over three years: this will involve enhanced member benefits, enhanced sales techniques and various incentives.

4. Approach foundations and trusts for project funding: researching, drafting and submitting applications.

5. Identify, target and develop relationships with ‘preferred partners’ in the private sector that secure sponsorships, advertising and other types of financial support for The Wheel.

What to do?

• Step 5: Capacity to deliver• The Wheel identified the capacity and resources available to them internally to

deliver the 5 strands• Looked at the cost/benefit of taking on additional resources to deliver the

programme• Added the overall calculated cost (€180K) of additional resources needed to

deliver the programme to the original deficit of €500,000• Thus The Wheel’s three-year income diversification target comes to ca

€700,000.• Employed a new Business Development Executive at the end of June 2010• Income diversification Strategy is to increase the earned revenue of the

organisation by €700,000 in the three years from 2011 – 2013:• Year 1 Target Increase (2011): €150,000 approx• Year 2 Target Increase (2012): €250,000 approx • Year 3 Target Increase (2013): €300,000 approx

So, How’s it going?

Strand Area % Total

1. Earned Income

Training 16.9%

Fundingpoint 21.3%

Advertising 52.2%

Consultancy 29.3%

Publications 26.1%

Insurance 17.6%

Sub Total: 24.0%

2. Membership 31.0%

3. Grants & Sponsorships 40.1%

4. Corporates & Partners 32.6%

5. Government & EU 87.3%

Total excluding Statutory 30.6%

Total including Statutory 70.9%

• Quarter 1: 1 Jan – 31 March 2011• We are mapping all earned income

lines to strands of the income diversification strategy

• Some line items are a little flattering due to timing issues etc

• Some line items are flagging• Good news is that we are tracking

it and monitoring it• All told we are about where we

need to be• Main point is that All staff and the

board have a shared interest, responsibility and input

How do I apply it?

• KISS: Keep it simple… stupid!

• Step 1: Engage the Board and your staff; buy in from everyone from the top down

• Step 2: Scope the task; take the starting point of assuming cuts to funding of 50% and see how you would survive

• Step 3: Assess Your Options; rule everything (all income generation ideas) in until you have to rule them out

• Step 4: Develop Actions; every piece of real estate and service you provide has a monetary value, choose the ones that best deliver your mission

• Step 5: Capacity to deliver; internally or externally, unless you resource the plan adequately you are setting it up for failure from the start

• Step 6: Build in reporting mechanisms so you can monitor progress and review and adapt regularly

Some things to remember

• Know your value proposition, what you are worth to others “People don’t want to buy a quarter-inch drill, They want a quarter-inch hole” - Theodore Levitt

• There are no silver bullets, be prepared to work and be prepared for things not to work out

• You are not alone, everyone is in the same boat so network and ask advice

• Imitation is the highest form of flattery … which is justification for theft! (cut, copy, paste)

• Data is key (being able to have data and being able to regularly review it)

• Generating income when it is all boiled down is a numbers game so the more people you are requesting a ‘call to action’ from then the more income you will generate.

And Finally…

“Everything that can be counted does not necessarily count; everything that counts cannot necessarily be counted.”

Albert Einstein

Questions & AnswersPresentation to Common Cents Conference 2011

12 May 2011

Presentation By Hugh O’ReillyBusiness Development Executive, The Wheel