Why fundraisers shouldn't underestimate small businesses

There are 5.7 million small businesses in the UK and the appeal of small but regular donations from this donor audience is growing. Increasing public pressure on businesses to demonstrate social purpose and individuals wanting to work for and buy from businesses that do good, also result in a huge income potential for charities.

In the UK, if 1 in 20 small businesses gave just 1% of their income, it would create £1 billion of new charitable funding every year. So, how can charities that may be unfamiliar with corporate fundraising take the plunge and make small business part of their strategy?

There are some fairly common misconceptions of barriers working with small businesses:

Time and resource

Many small businesses want to donate through cause-related marketing type donations, e.g. 10p from every product sold, but as a fundraiser, these relationships can be time-consuming to steward.

Low donation values

When a small business can only donate a small percentage of sales or profits, it might not make financial sense to go through the work involved in putting a commercial participation agreement in place for each one.

Business credibility

You’re only able to consider a partnership with a business that has been incorporated or trading for at least 2-3 years.

These pain points are all valid – but as Brexit and more general financial uncertainty looms, looking to the small business community could help many charities to generate new funding streams.

Three reasons why small business donations are worth your attention:

Sole-traders, freelancers and consultants make up the majority of small businesses in the UK

Personal values are at the heart of most small businesses. Therefore, as 43% of charitable income currently comes from individuals and only 2% from businesses, it can be much easier for fundraisers to connect with the individuals running small businesses, especially compared to larger more bureaucratic companies.

Small businesses are already giving regularly

According to Peak B’s latest Small Business Community Value Report (September 2019), small businesses are giving an average of £502 per year. With over 5.7 million small businesses in the UK, this income potential is too great to ignore.

Small business generosity isn’t dampened by Brexit fears

As the shadow of Brexit looms, small business giving appears to be surprisingly Brexit-proof. According to the same report from Peak B, small businesses are responding to Brexit uncertainty by doubling down on giving back to communities and social causes – a trend that fundraisers can’t afford to ignore.

So where do you start?

Well, we’d recommend starting at www.workforgood.co.uk.

Work for Good is an online donations platform making it easy for small businesses to donate to UK registered charities through the sales of products and services. Small businesses can set up and pay donations to you, track their donation history and create a giving page to tell their story. A digital commercial participation agreement is integrated into the platform allowing businesses to legally link donations to their sales and enables you as a charity to accept smaller donation values which you may otherwise be unable to do.

Over 800 charities and small businesses are using the platform and charities including WaterAid, Tommy’s, Friends of the Earth and Plastic Oceans are benefitting from rerouting small businesses to Work for Good to steward and keep track of their support.

Though fundraisers may have good reasons to avoid taking on small business donors, the increasing untapped potential of the small business sector is too significant to ignore. Work for Good can help you manage this support.