Whither Sustainability? Well, It Depends

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July 16, 2013; The Guardian


NPQ has covered the issue of the reliability of income previously on any number of occasions, but perhaps nowhere to so much acclaim as in Jon Pratt’s “Dynamics of Funding: Considering Reliability and Autonomy.” Now, this blog entry written by David Floyd for the Guardian takes up the same issue for social enterprisers, because the author thinks that there is something of a default view that earned income is more likely to produce sustainability than grants.

This, he contends, is an oversimplification. “The sustainability of any source [of] income is based on how likely that money is to continue coming in and that will be different for each organization depending on their circumstance.”

He suggests that we imagine a hypothetical group that has been established to provide homes for retired llamas and consider their possible revenue streams:

  1. Fees from zoos who are legally responsible for providing homes for llamas in old age
  2. Regular donations from people who are keen to see retired llamas have a good home
  3. Grants from grants trusts (institutional funders) with an interest in llama welfare
  4. Admission fees from people who want to come and visit the llamas in their retirement
  5. Fees from the National Health Service for providing experimental “llama care therapy” for their patients
  6. Selling llama-related t-shirts and merchandise

In this case, he says, “(a) is the ideal source of income, because you’re being paid by a customer who needs your service to deliver that service. (b) + (c) would be the next best things because you’re being paid by some people who want to pay for (buy) the social activity you’re providing. (d), (e) and (f) all involve providing services and products other than the social activity your organization provides, in the hope that these services and products will make a profit to enable you to deliver your social mission.”

But this scheme regarding the llamas all falls apart if the zoos feel no responsibility and the llama lovers have other more pressing commitments they cannot be persuaded out of. The point, Floyd writes, is “to start from your social mission and work out the most likely way to generate the cash to deliver it on an ongoing basis.”—Ruth McCambridge

  • David Floyd

    In one sense, I think the argument I’m making ought to be a tautological one: ‘the most sustainable income streams are the ones you can sustain’ but it’s something that – at least here in the UK – has got amidst the clamor for charities to replace voluntary income with trading income.

    This clamor is partly coming from people who take an ideological position – a quite legitimate ideological position that I support in relation to some social activities – that it’s morally better for social action to be commercially self sufficient than to be dependent on either state funding or private altruism.

    Unfortunately, some people working in social enterprise jump from this position of principle to the suggestion that trading activities are most practically sustainable way of raising cash for social action in any given situation. Clearly this is nonsense.

    Then we have public sector agencies – not sure whether this is similar in the US – who are demanding that local charities become commercially ‘sustainable’ because they can’t afford to keep providing them with grant funding.

    Leading to the absurd notion that the fact you are no longer able to get regular funding for your mental health support group from the state, in some way means that funding its activities by opening a cafe is a sustainable alternative – when not getting state funding and attempting to run a business with no connection to what you do in a highly competitive market place are activities that are both as unsustainable as each other.

    That’s the simple bits of this argument, though.

    There’s also a more complicated question about whether in some instances, some social organisations could actually reduce their ability to generate the income they need through donations and (in-kind) through volunteering, by commercialising their social operations – I don’t mean charity shops but actually commercialising their social activities, for example a church selling tickets for its Sunday service – and therefore discouraging people from contributing either cash or time voluntarily because they don’t want to be seen as donating to ‘a business’.