Businesses provide products and services which they sell to people (companies, individuals, organisations, etc.). Businesses sell these products and services for money.
Charities provide products and services to people (as above) in exchange for money. So why are charities, in the eyes of the many, not viewed as a business?
There are three reasons which blur the picture:
Terminology: "Surplus" instead of "profits" is used but ultimately, it means the same. The idea is that turnover exceeds costs which makes an excess called profit/ surplus.
Purpose: Charities have a charitable purpose, social goal or an aim which benefits people. These aims don't rely upon "seen" money. However, they are underpinned by money which is how people deliver their services or sell their products. The output is perceived as free because the money trail is behind the scenes. In business, invariably the money trail co-incides with the purchase of a product or service and therefore is "seen" by the customer.
Funding: A term that plagues the life out of any meeting in the charity world. Funding used to mean exclusively grants and donations (which includes gift aid and legacies). However, funding has evolved into a business function within charities. Charities apply for funding in a similar way businesses tender for work. Both businesses and charities would receive money if they were successful.
Simply put charities are a business. They make say they look different, say they are different and say they act differently but when they are broken down into the fundamentals, they walk, talk and act in the same as a business. Charities, like businesses have staff, managers, reports, meetings, talk about finance, strategy, marketing, sales and logistics. Whilst their services are different e.g. caring for people versus selling widgets, ultimately, they provide a product or service which is exchanged at some point in time, either directly or indirectly for money.
Many charities, large or small lack the requisite skills and knowledge to fulfill their potential in their marketplace. This is why organisations like Temco exist - to help train charity workforces in topics surrounding operating an organisation, managing funding, improving the effectiveness of a workforce and upskilling the workforce with key skills and knowledge.
For more information about Temco and the training or mentoring services we offer, call Andrew Moore, Lead Trainer and Mentor for Temco on 07926 606 660 or e-mail [email protected]