This category deals with the trading side of fundraising, for example, when a non-profit charges a fee for its services, sells goods (though charity shops are also in a separate catgegory), creates a separate trading company or otherwise raises funds by selling goods or services.
More about trading
Trading must only be done occasionally and it must not be done in competition with other traders. The public must be buying the goods because they wish to help the charity and the profits must be used for the charity’s charitable purpose.
If trading becomes substantial or regular, it is best to set up a limited company which covenants all of its profits to your charity. Instead of covenanting (which must be for up to four years or more) the company could use the Gift Aid scheme to remit funds effectively to your charity.
It is prudent to seek legal advice in the setting up and running of a trading operation of this kind. An accountant’s advice would also be helpful in making sure that the two legal entities are entirely separate.
Your membership forms a niche market of a certain kind of person. One thing is sure: they like your organisation and probably wish to be associated with it. The Henley Centre for Forecasting, among others, has highlighted the phenomenon that people are increasingly defining themselves in terms of the organisations they support and their profession, rather than the place they come from. They are, for example, beginning to think of themselves as members of the World Wide Fund for Nature, rather than inhabitants of Tottenham. This enhances the possibility of selling them goods which bear your logo. T-shirts, for example, make abundantly clear the wearer’s allegiance. Once it can be determined which goods interest the charity’s supporters the next step is Starting a catalogue.
Licensing deals for charities have their origins in the licensing of well-know trademarks such as cartoon characters and famous figures from cinema and television.
Suitable products are designed by a design company and sold on to a manufacturer who then manufactures the goods and and in turn sells them on to their usual outlets, or possibly finds new outlets for the goods. A star, Mickey Mouse for example, then appears on a bewilderingly wide variety of products, from straightforward toys to curtains and bedspreads, as well as coat hooks and torches. A licensing agent takes the copyright owner through the whole process, putting the best deal forward, looking after their client’s interests and maximising their return.
Shops offer a reliable way of diversifying a charity’s income. This is also probably subject to a different business cycle to membership. They can be expanded across a country depending on the amount that can be invested and the availability of prime site, high quality premises. Anything less will not be seen by those giving or those buying.
In recessionary times it is easier to open charity shops because the institutional landlords who control most of our high streets are less choosy about who they rent to.