Charity begins … with a business plan! Monica Higgins takes a look behind the scenes at some successful charities and finds that many commercial business structures are crucial to their survival, too.
Walt Whitman once said, “charity and personal force are the only investments worth anything.” That may be so, but charity is serious business these days and these organisations need a business plan, cash flow and investment, to realise their philanthropic goals.
While recent reports suggest Australia is in a phase of donor fatigue, the number of charities and non-profit organisations popping up-and flourishing-suggests otherwise. From charities for cancer and every other known disease, to education, the environment and natural disaster recovery, it would seem Australians are happy to open their wallets for a good cause. Also peeling bills from their folds are benevolent ex-professionals and corporates keen to make a difference to the state of our nation.
These organisations may not be the Starlights, St Vinnies or RSPCAs of the world, but their socially aware creators and subsequent employees have bent a backbone or two to make a dent in research and improving the quality of life.
While many of us daydream of being instrumental in saving a forest of ancient trees or feeding a village of starving children, going the whole nine yards is not as easy-or as instantly gratifying-as we imagine it might be. Making that charitable business ‘succeed’ requires a good dose of dedication and patience.
The CEO of Tender Loving Cuisine (TLC), Jack Barker, should know. He’s been at it for a decade, but it took five years just to break even. Today, the meals on wheels-style non-profit organisation proudly carries the Heart Foundation tick and is working closely with Diabetes Australia. But the business had humble beginnings and it was a long road to becoming the fully self-funded operation that TLC is today.
With an entrepreneurial and accounting background, Barker’s benevolent business idea arose from helping out a mate with his meals after a debilitating car accident. The food was a hit and it set the wheels in motion for a premium meal delivery service with a client base of the elderly and the unwell. Barker entered into an agreement with NSW Health to provide home-delivered dinners to discharged hospital patients from Sydney’s Royal North Shore Hospital, and now many more public and private hospitals use the service.
“To run a charity or a non-profit organisation, you have to be absolutely committed because it’s not a money-motivated industry. The motivation instead comes from providing a great product or service that helps others. And the satisfaction and gratitude for doing so is very rewarding.” Barker’s motivation was well and truly tested at the start when the nursing staff working alongside him found the role too time consuming, and left the now 65-year-old to train health care workers, social workers and dieticians to spread the word.
Theo Richter, president of Power Thinking Health Council, thinks along the same lines when it comes to commitment to a cause. He says the drive behind starting a non-profit organisation is about a philanthropic intention rather than the spoils of wealth.
Richter’s registered research-based charity dedicated to the power of the brain as a tool, and the positive role it can play to deliver relief, recovery, prevention and treatments for cancer sufferers. “To start a charity or a non-profit organisation you need to have a community purpose. And that purpose should never be based on delivering any profits to the members of the organisation,” he says.
“You need to seek out like-minded and right-minded people and set up collaborative arrangements.” He suggests having an additional base of resourceful people will cover any gaps that might appear in the structure of your business.
Like all registered charities, Power Thinking Health Council relies heavily on marketing to attract investments and donations from outside sources, a task Richter says is a challenge when you’re already running on a shoe-string budget.
His organisation’s initial target for fundraising was through their website and registration with www.ourcommunity.com.au a network and resource for community groups, charities and non-profit organisations. “As a purely web-based research company though, we found investments and donations were very difficult to attract.”
To increase awareness of their research, Richter and his team opted for interactive workshops to promote the powers and benefits of the brain in better health and well-being. With gold coin donations suggested as entry fees, the seminars also provided a solid foundation for further research. “The results of the workshops fed strongly into our research. And once our results have been circulated more widely, we can then put out a business model, which will form the basis of our forward projections for significant investments and donations.”
Competitive Edge
With much bad news circulating today, it’s not really surprising to find many organisations willing to go the extra mile. But before you quit your job to sail away on your charitable boat, keep in mind not even charities are free from competition.
Paul Graham, a financial adviser for CCH Australia, says competition can be fierce. “So a strong point of difference should be at the forefront. If there are already 10 non-profit organisations out there doing the same thing, should you really go ahead with yours? It’s a good idea to visit an accountant and benchmark the various non-profit organisations in your area. This will give you a good idea of where you stand,” he suggests.
Like many successful commercial small to medium-sized enterprises, TLC grew from a niche in the market. “The most complaints received by the Department of Ageing, Disability and Home Care come from nursing homes that have patients admitted who are malnourished,” Barker says. “I wanted seniors to be able to get the best tasting dinners without the shopping and cooking, and to stay healthy. There was nothing like that on the market at the time.”
A non-profit organisation also requires the same groundwork as a commercial business such as business plans and extensive preliminary research. “Do your homework,” Barker suggests. “I know that advice has been given time and again, but it is true. Make sure you have a business plan. A lot of small businesses don’t do their pre-planning and budgeting and that is where they fall through. You need to know that you have enough budget to carry on; and in that way, a charity or non-profit organisation is no different to a commercial business.”
Richter has similar advice. He believes patience and a little forward planning are key to success. “Give yourself time to set up your organisation. Apart from the different registration requirements for charities-both state and federal-we were only able to set up our charity research organisation after almost a year of testing initial theories. Even before it was up and running, we had already determined an implementation plan as well as a clear direction for the first year of operation.”
With this foundation in place, the charity was confident about their purpose and direction, and by the end of their first year of operation, were successful in securing a volunteer management consultant to assess their progress and future in terms of their directions and requirements.
Social Conscience
While it’s common knowledge the high-flyers of the commercial business world generously give a percentage of their profits to assist in the planting of trees, the saving of lives, the finding of cures and the buying of books, small to medium-sized enterprises are also discovering that it’s just not enough to endlessly take, without giving back to the communities that nurture them.
Leone Martin is a young mum. Her salon-quality hair products, EverEscents, are the only organic range available in Australia, and while she has the potential to reel in handsome profits because of her current market positioning, she opts to donate five cents from every sale to Camp Quality.
“It’s all about karma,” says the vibrant ex-insurance broker. “It’s such a great feeling to give back to society and to a worthy cause.”
Her thriving business stemmed from a personal quest to alleviate her grandmother’s battle with cancer, and her range of 100 percent organic products urge consumers to pay closer attention to what they’re putting into and onto their bodies.
But selecting the right charity was not an impulsive decision and Martin stresses if you do want to support one through your product sales or business profits, make sure it ties in with your range and company vision.
“People who are buying organic products generally care a great deal about the planet, and so I chose a charity to complement my product. The charity also needs to be confident of the products they’re endorsing before they give the green light, so a lot of scientific testing had to be done first.”
Although initially struggling with the knowledge of the financial gains to be had through donating to charity, since her new range went on the market early this year, Martin has already noticed the extra benefits that come with being a little selfless. “From a marketing perspective it has given my business credibility, but it’s not something I purposefully set out to do,” she insists.
Dui Cameron, designer of women’s fashion label Boom Shankar, would say that financial benefits are supplementary to the purpose of giving to charity. Boom Shankar is fast becoming Australia’s favourite Indian-inspired fashion label and as a measure of success, the flamboyant Eastern-inspired garments not only sparkle from the pages of top fashion glossies, but also in boutiques across the globe.
But success in the rag trade is not the only force that drives Cameron. A portion of her profits are generously donated to struggling villages in India, a country that Cameron says has given her so much. The young designer’s latest accomplishment has been the construction of a bore to provide a disadvantaged Indian community with running water.
And it’s personal satisfaction from her donations rather than any tax benefits that drive her. “While there are small tax write-offs,” says Cameron’s business associate, Erin Lickford, “for Dui it’s all about giving back. So the focus is not so much on the advertising of our donations in order to increase revenue, but about doing something for the greater good of a community.”
With a growing rate of commercial businesses and individuals developing a social conscience, is job satisfaction on the rise too? Barker certainly thinks so. “If you want a good income, then this is not the job for you,” he warns prospective TLC employees. “In our office, no one undermines each other as we’re all here because we want to be. It’s a happy, healthy working environment.”
For the majority of us, charity begins at home, but for the many people who work tirelessly for Australia’s non-profit organisations, it is also packed up and taken to work.
