Skip to content
Skip to main content

About this free course

Become an OU student

Download this course

Share this free course

Introducing the voluntary sector
Introducing the voluntary sector

Start this free course now. Just create an account and sign in. Enrol and complete the course for a free statement of participation or digital badge if available.

1 What is funding?

Cartoon image of a group of people holding placards.
Figure 1 Donations are important elements of funding

If you are involved with a very small organisation you may already have a good idea of how your organisation is funded and where the money comes from. You might have direct experience of running fundraising events or writing bids for funding from government or grant making trusts. Even if you’re not currently working in the voluntary sector or volunteering, you have probably seen people shaking their collecting tins or attended events run by organisations trying to raise money. In bigger organisations it may not always be so apparent where the funding comes from. You may know how the project you work on or support is funded but not be sure how the money is raised for everything the organisation does.

Although exploring ‘how to do’ fundraising is beyond the scope of this week’s study, it is useful to bear this in mind to provide a context for the rest of this week. There are many different methods that organisations might use to raise funds, such as street collections, small local events as well as national ones (e.g. Comic Relief or Children in Need television nights), sponsored runs, crowd funding, national campaigns for donations by text, phone, online, charity shops selling donated items as well as the organisation’s own products, and so on.

Some of these methods might generate only small total sums but for a small organisation these might be vital to their survival. Organisations may also raise funds through bidding for contracts to run services or by applying for grants but these are perhaps less visible outside the organisation – unless they are successful of course.

Activity 1 Out of the Blue

Timing: Allow approximately 5 minutes

Read the following example of fundraising by Helen & Douglas House (H&DH), an Oxford-based organisation that cares for terminally ill children, young adults and their families. ‘Out of the Blue’, a group of singers from Oxford University, released a single in 2014, Hips Don’t Lie – Charity Single – Shakira – Out of the Blue [Tip: hold Ctrl and click a link to open it in a new tab. (Hide tip)] , with all the profits going to the charity.

Out of the Blue Shakira medley

The fantastic Out of the Blue have recorded a medley of Shakira songs and all proceeds from the sale of the single come to H&DH, supporting hospice care for children and young adults.

We have been amazed by the popularity of the video, after Shakira herself posted it to her Facebook page, and sent a Twitter message to the Out of the Blue boys! Hundreds of thousands of people have watched the clip, so please watch and click through to buy the single, & support H&DH!

(Helen & Douglas House, 2014)

Now consider the following questions:

The charity single eventually raised £10,000.

  1. How significant is that sum of money for an organisation that had an income of £10.41 million in 2014?
  2. Why do you think it is important for voluntary organisations to get involved with this type of activity?
To use this interactive functionality a free OU account is required. Sign in or register.
Interactive feature not available in single page view (see it in standard view).


The sum of £10,000 is obviously a very small amount for this organisation – around 0.1% of their total income. Although you do not have all the details here, it is possible that H&DH do not have to get very involved with the singles – it is probably the group’s choice to make the singles and donate the money. Therefore receiving £10,000 for minimal effort is worth doing.

It is all good publicity for H&DH (and Out of the Blue): their cause was probably brought to the attention of people who were unaware of them before. The organisation would hope to gain more donations and also new volunteers from this. The organisation has 220 employees but 1250 volunteers, so volunteering is important to them.

Out of the Blue have a strong Oxford identity. Therefore, the charity (although Oxford-based it also operates across southern England and parts of the Midlands) is also making a local connection and hoping to draw on more local support. Furthermore, H&DH rely almost entirely on donations. This illustrates that seemingly small initiatives like this have a wider application than funding, by potentially generating publicity, interest and more donations, and all therefore adding to the picture of sustainable resources for organisations.

For some voluntary organisations, however, receiving £10,000 could be significant funding, which enables them to keep going for another year. As you will see later this week, income from individuals forms the largest proportion of funding for every size of organisation (NCVO, 2015).

Many organisations try to obtain resources from different funders so they are not reliant on just one source. This has become particularly important in recent years as government funding to voluntary organisations has been cut. However, having different sources of funding creates challenges: in addition to all the work needed to apply for funding, numerous external relationships then have to be managed, as well as completing all the reports and complying with any monitoring required, when funding is through contracts and grants.