Third Sector Article: It’s Time to Foster Local Community Investment

Heather is a regular Guest Blogger on Third Sector. Here’s her September article:

At a time when public trust in charities is being challenged, local communities want to sHeather Portrait Colour Cropped BWupport local causes. This is the message championed by recent research, so how do locally-rooted organisations maximise this opportunity?

The Charity Commission’s recently published Public Trust and Confidence in Charities 2016 report highlights the importance of local connections.

Its headline findings state: “A connection with the local community is important when the public choose which charities to trust.

“Three-quarters of the public agreed that they trust charities more if they have heard of them, and three in five agree that they trust charities more if they are providing services within their local community.

“The importance of familiarity with a specific charity is so strong that only 30 per cent would feel confident donating to a charity they have not heard of previously.”

Local organisations seem to be struggling to galvanise this local support, as flagged in research funded by TSB, called Small but Vital: Local Charities Matter.

It emphasises that Britain’s small and local charities are facing three distinct challenges: lack of awareness, competition from bigger charities and insufficient resources. But it also says that a third of the public cannot name a local charity.

I suggest there are two options a local organisation could take to increase engagement and investment from their local community.

The first is to consider ways to improve awareness and communication with your different local stakeholders to maximise their involvement and increase transparency and trust for the long term.

By improving communication methods, you can engage new and existing stakeholders in different ways across the organisation, for example volunteering, donating products, financially investing or participating in services.

This requires a segmentation of stakeholders and deciding on the messages they want to send or hear from different groups, and the best methods or tools to use. Once this is decided, the organisation could use a client relationship management system to track and record interactions with contacts and deploy integrated communication tools.

The second option is to provide local people the opportunity to financially invest in a tangible local resource or look at ways to maximise financial giving. The approach you take would depend on the opportunity and the appetite of your community.

If an organisation is developing a commercial trading service which supports the community while also generating future income – for example shops, cafes, community facilities, or leisure and recreation amenities – you might want to consider community shares or crowdfunding.

If local people want to have a real stake in the organisation and wish to influence, shape or support its future existence, community shares can be the ideal approach for developing a model of local ownership and buy-in.

If you feel your community wants to benefit personally from their financial investment, you might want to look at crowdfunding options, which can provide financial remuneration or rewards in return.

If local people just want to give a donation to help deliver a local service and don’t expect anything in return, then match-funding donations can be the best way to go. Research shows that more people give when their donations are match-funded. The aim of match-funding is to incentivise more people to give and people to give more.

Heather Black is managing director of Economic Change CIC, which helps organisations improve their efficiency, sustainability and impact.

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