That nervousness probably stems partly from charities being inherently risk averse. Trustees do not like to see a negative P&L, and a negative balance sheet is not an option. However, perhaps it also stems from not being clear about how commercial risk can be managed by a charity. For example, by establishing a separate trading company that isolates the risks.
Charities are increasingly having to consider a range of options when it comes to raising funds. It is often the case that they have specialist knowledge, a strong brand and, in some instances, assets they can exploit, e.g. intellectual property. Finding a solution to ‘how do we do it without risking our core operations’ may help unlock that potential. This is a subject our Coaches discuss, as does our Business Expert Marie McQuade, who specialises in Business Models.
‘Either through a commercial partnership or independently trading can be an important way for charities to create products that fulfil their core purpose and/or engage their core audience. But it’s is important to look at the ultimate reason for trading for a particular cause in the first place and get this right.’
If you can see commercial potential in your charity and would like to explore ways of unlocking it, get in touch