Putting a positive spin on profit - generating income from your skills and expertise

With trusts and statutory funding ever more squeezed, it’s clear that many organisations will need to find alternative income sources to survive. It’s not fair, it’s not good for society, but sadly it feels unavoidable.

But other forms of fundraising (corporates, major donors, legacies etc.) are rarely a quick fix. They too can be oversubscribed, require specialist expertise and/or take time to bear fruit.
 
So is there an alternative?

In recent years, we've increasingly focused on supporting charities to generate earned income by monetising their skills and expertise. For many charities, their talents are more valuable and highly-sought than they realise, and can unlock income with the right approach.
 
However, they may have to overcome some common barriers:

• Lack of time, knowledge and/or confidence to create products, develop a clear proposition and negotiate commercially
• Concern about whether charging for services is appropriate, and aversion to the word "profit"
• Frankly, being too kind and too nice – where charities do sell services, they often hugely undervalue and undersell themselves

 
But I know these barriers can be overcome – and I'm hoping to convince you with a case study from a small charity that we recently worked with, called Social Action for Health.

About Social Action for Health (SAfH)

SAfH is a community-based health charity providing services and support to people most affected by health inequalities in east London. Since their inception, meaningful community engagement has been a core part of their work, to ensure the voices of people most at risk of health disadvantage are front and centre of health services and research.

As a small charity deeply embedded and trusted in their community, employing local staff who understand local people’s priorities, they are uniquely positioned to facilitate better quality community research that is mutually beneficial for both researchers and the community. They often have the opportunity to collaborate with research institutions and individual researchers, and potentially to charge for their expertise.
 
But, like many, they previously lacked the time and commercial knowledge to articulate a clear offer and proposition, and develop the pricing structure and processes to compete with the bigger fish (often commercial providers) in the community research space.

They were also concerned about risking their reputation, if people perceived that they were being led by the money and financial gain, rather than the community. Many in the SAfH team felt uncomfortable with the concept of profit and its negative connotations – money ending up in somebody’s pocket for personal gain.

A cancer awareness project in Hackney, run by Social Action For Health

Working with SAfH to develop their community research offer

The opportunity to scale up SAfH’s community research first came up when we facilitated a series of income generation strategy workshops for them in early 2023. Three things we did proved especially insightful:

• Skills mapping to identify the team’s unique skills and expertise, how they were using them already to achieve impact, and how this might be replicated to generate income.
• Horizon scanning to identify future trends or possible developments in their sector that might create income opportunities.
• Competitor analysis to pinpoint similar organisations that already sell services, how SAfH compared, and what SAfH could learn from them.

Informed by this, we encouraged the team to come up with a shortlist of income generation ideas, with “wild card” ideas welcome and encouraged! We then shortlisted the best ideas – including community research – and scoped them out using the lean business canvas: a tool we recommend for sketching out an outline business plan for a new product idea, with all the key components on a single page.

This showed clear potential to increase income from community research, but more work was needed.

So we worked with the SAfH team as follows:

• Fully scoping out potential customer groups: what were their current needs/limitations, how could SAfH help them, what might concern or put them off working with SAfH?
• In-depth research into five “competitors”: how did they describe their services and build confidence with potential customers, how did their proposition compare to SAfH's, what did they charge? Many of these so-called competitors were also partners, so part of the challenge was working out how best to co-exist in the community research space, and identify when someone else was better placed to do a project.
• Financial analysis: what did SAfH charge for different types of research projects, how much time did the team actually spend on delivering them, where was there potential to charge more to fully cover costs and generate surplus?

A key breakthrough came when we shifted from talking about profit to surplus. As mentioned earlier, "profit" can come with negative connotations. But surplus felt positive and healthier – giving SAfH confidence and permission to talk about reinvesting income into community projects and services for local people.

This shift enabled SAfH to position itself as the “Fairtrade” option for community research: an ethical choice that enables researchers to achieve their own objectives while making research more relevant and accessible for local communities, and supporting a vital local charity at the same time.

Armed with this growing confidence and clarity, we worked with SAfH to create a few key things to support their community research strategy:

• A stronger proposition that explained SAfH’s approach, expertise and ethos, and the benefits of collaborating with them.
• A bank of case studies and testimonials to demonstrate the positive impact of SAfH’s previous community research projects and build confidence that they were an effective, trustworthy partner.
• A rate card that made it easy for SAfH to cost up projects, factoring in the need to value the team’s expertise and fully cover costs.
• A “scorecard” for evaluating potential research opportunities, enabling the team to confidently decide whether a project was the right fit for SAfH, based on to what extent it benefitted the local community, enhanced their work and profile, and whether the researcher’s ethos and values aligned with SAfH’s.

One key challenge has been SAfH's capacity to implement all these new tools – some are still making their way into action on their website etc. But actually, this has been part of their learning curve – try not to worry too much about doing everything and making it perfect, just start somewhere and make incremental changes to develop the offer.  

Reframing your thinking to focus on surplus rather than profit can make people feel comfortable about generating income from your skills and expertise

Increasing confidence to generate income from your skills and expertise - why does this matter?

For SAfH, this was a pretty involved process, and the work is still ongoing. But it’s had a positive impact.
 
The team feel more confident about ensuring full cost recovery and generating surplus from community research, and more purposeful about describing their expertise and working with researchers to agree appropriate costings. They also find it easier to say no to opportunities that will not cover costs and have the necessary social impact.
 
As a result, the community research projects they commission not only generate vital income, but boost their social impact too - both directly through ensuring better quality and more accessible research, and indirectly through increasing funds to invest in their other services.
 
There are lessons here for charities in a similar position, with the potential to sell something to the private sector.
 
This isn’t about putting things behind a paywall, but valuing and capitalising on your unique skills and expertise. In so many areas, charities have as much to offer, if not more, compared with profit-making companies. They solve problems and create value for those who have the ability, and willingness, to pay for it.
 
The question isn’t why you should consider doing this, but why not? Because there’s a bigger picture at play.
 
If you don’t sell your expertise, then somebody else will fill the gap – quite possibly someone without the same social impact, ethical approach and community-centred ethos as you.
 
If you undersell your expertise, at best you’ll put pressure on your team to cut corners and do a sub-standard job. At worst, you’ll look like a budget option and, counterintuitively, put people off by being too cheap.
 
If you rely fully on grant, contract and fundraising income, you’ll unavoidably be under more financial pressure in a thanklessly difficult climate. Every organisation will be competing for that local tender, or oversubscribed funding pot. But not every organisation has the skills or confidence to sell their expertise.
 
Doing this well not only generates new income, it builds confidence internally and externally – including with donors and funders – that you’re a more financially resilient, sustainable organisation.
 
I appreciate that not every charity is well-placed to do this. And, as with everything, it’s not without its challenges and risks. But I think more organisations should have the confidence to try, or at least scope it out. It takes time, and a clear process, but it can really pay off.
 
Profit doesn’t have to be a dirty word in the charity sector (especially when reframed as surplus to reinvest). More than ever, for some it could be a vital solution.

Huge thanks to Social Action for Health, and their CEO Ceri Durham, for helping us to develop this blog and kindly giving permission to share their story.

If you'd like to explore how we can help you to develop income in this way, get in touch.