Earned income

Voluntary and community organisations are increasingly being encouraged to diversify their income streams to ensure long-term sustainability. Earning money through assets, trading, and contracting are one way organisations diversify their income to afford more financial flexibility. Income from these sources is unrestricted, which means that your organisation can spend it any way it chooses as long as it advances your mission and objectives.

Approaches to generating earned income include:

• Trading - mission-related trading (selling things related to your organisation's aims and mission) and unrelated trading (selling things purely for profit which can be used to subsidise core work)
• Cost recovery (charging users a minimal fee)
• Contracting (providing specified services via a contractual agreement)
• Social firms (involving service users in income generation)
• Asset-based development (organisations with property sometimes have space to rent out to other groups)

Earning income is an important source of funding for the Third Sector. However, earning requires your organisation to think laterally about what your organisation does, whom it does it for, and what it could sell to generate income. There are also other issues to consider before starting earning, for example, the legal issues of trading and new skills needed for sales, marketing and promotion. All things considered earning might not be for everyone. However, for those organisations that earning is an option, it can be a big step towards sustainability.