Many organisations reach a point where they realise that grant funding, donations and investment income will be inadequate in the future to sustain the organisation or cover the cost of growth initiatives. This is when it becomes evident that the organisation will need to actively engage in an income generating activity to make unrestricted profit for the organisation’s benefit. Does this sound like you?
Income generating activities can be passive, such as interest or dividends on investments. However, what we refer to as income generating activities are the active steps taken to charge for services or products in order to make a profit, no matter how small or incidental the amounts may be.
Typically, income generating activities fall into 3 categories:
- Charging for existing activities
- Creating a business for the beneficiaries as a means of outworking the organisation’s objective
- Starting a new business to make a profit for the organisation