What are these alternatives?
To help you decide which is best for you, we've developed advice that covers a range of potential funding options.
Click through the tabs above to find out more about the different sources available.
Many will often see all these methods as fundraising, some of them are better seen as raising finance.
The difference may seem like splitting hairs, but it's important when trying to work out what type of funding your organisation needs – and, importantly, how much.
Fundraising tends to refer to raising smaller amounts of money over a longer period of time. It's often for smaller projects or to supplement an annual income on a regular basis. It’s usually seen as raising regular funds to help contribute to the regular day-to-day costs of running the club or providing your activities.
Finance is often used to mean raising capital funding – significant sums of money on one-off projects that lead to a step change in the kinds of activities your club can undertake and the revenue (and impact) you can generate from them. There is potentially more time and effort involved in raising finance – but organisations can also secure more money for bigger projects.
Things to think about
Crowdfunding is a powerful tool, but it’s not a magic bullet. You need to work hard at promoting your campaign both on and offline to give it the best chance of success. But it terms of effort, it can be less time-intensive than things like organising events.
As activity is driven online, it can connect with younger or busier audiences who might not attend events or respond to more traditional fundraising. But it can also alienate older and less connected communities, so think about whether it works for your likely donors.
Having a strong social media presence or email list is vital to achieve the reach you need to connect with people. If you want to crowdfund and don’t have a website, a Facebook page or regular newsletter, then consider developing this first.
People are bombarded with requests for funding online, so make your appeal stand out. Make it as professional as you can, but it doesn’t need to be too slick – ultimately, you need donations to be able to do something important, and that ambition should shine through.
Things to think about
While flexible, the law governing companies with share capital is built around protecting investors seeking to achieve a financial return, so social purpose can be harder to enshrine.
Clubs seeking to balance the sporting mission with rewarding investors could look at becoming a Community Interest Company to do this. But once rights have been given they’re difficult to remove, and selling equity in a ‘standard’ company structure can start a process that can see control move away from the club’s participants or users.
There are also laws and regulations governing offering share capital to the general public that can make it hard for clubs to use these methods cheaply or without risk.
While exemptions exist for companies raising less than £150,000 from fewer than 100 people, or where there’s already an existing member base in a relationship with a company (such as club members), clubs should take professional advice to ensure they don’t inadvertently commit criminal offences, which can also lose their directors the benefit of limited liability.
A quick guide
There are various sources of finance that can help get your project off the ground:
Debt finance is money lent to an organisation in return for which the organisation undertakes to repay the lender both the interest and the original amount lent. It can be lent from a variety of sources.
Mainstream finance is where loans come from mainstream banks and building societies in the form of finance to help your club do something very specific and transformative. As the lenders need to get their loan back with interest, you’ll need to show how you’ll use the money to generate new cash to service the debt.
Social finance involves specialist lenders focused on organisations that deliver a tangible social impact, as well as a financial return.
Angel investors are people who provide capital, typically for a business start-up, usually in exchange for some form of share in the company. For sports organisations, angel investment is usually in the form of loans.
Peer-to-peer funding is using debt from members or users. Because security is hard to achieve, the ability of organisations to access this is usually dependent on having community or locally-based lenders who understand the organisation and its aims.
Things to think about
There are lots of guidelines from HMRC on what’s needed to ensure you’re claiming Gift Aid on genuine donations for a charitable purpose. It can be quite complicated, so it’s worth making sure you fully understand the regulations before starting in earnest so you don’t get nasty surprises further down the line.
Grant search engines
Grant search engines hold a host of information about possible grant opportunities.Read more
Try these organisations if you need a grant.Read more
Grants from other organisations
Other organisations also offer grants.Read more
- Bowls England - Help for affiliated clubs to find out more information on local, regional, national and even European funding opportunities.
- Cash 4 Clubs - Cash 4 Clubs offers all sports clubs in the UK the chance to win grants ranging from £250 to £1,000. It's a simple scheme aimed at giving community clubs a helping hand and provide the opportunity to raise the money they need to invest in their club.
- DSC Sports Funding Guide - The Sports Funding Guide is a practical guide aimed at helping organisations and individuals looking to raise money and win support for their sport. Available from Amazon, and Directory of Social Change.
- Educational Grants and Charitable Trusts - EGAS offers students, especially disadvantaged students, expert guidance and advice to enable them to secure funding for education and training.
- England & Wales Cricket Board - Raising the money to carry out your plans is without doubt the most challenging task faced by cricket club committees and members. This guide will help steer you through many of the grant aid and development funding agencies which exist and to give you an insight into their respective funding criteria.
- The Football Foundation - The Football Foundation directs £40 million every year into grassroots sport.
- Funding for sailing - Tips on putting together a funding bid and points you in the direction of some of the key funding sources that sailing clubs have been successful.
- Grantsnet - Grantsnet is a search engine for grants available to UK organisations.
- Lottery funding - A free website run by all National Lottery funders in the UK. The site allows you to search for information on current funding programmes across the UK.
- NCVO Funding Central - A free grants search database.
- One Family Foundation - Pools together and redistributes profit to fund projects that will benefit families and communities.
- Premier League and FA Facilities Fund - Providing grants for building or refurbishing grassroots facilities, such as changing pavilions and playing surfaces for community benefit, with money provided by the Premier League, The FA and Sport England, and delivered by the Football Foundation.
- The Rob George Foundation - Provides financial support to young people who demonstrate exceptional commitment/ability in the world of sport but are held back by their financial situation from pursuing their goals.
Social sector grants
There are a large number of grant providers in the social sector, both nationally and locally.
These grants can come with conditions such as how it's used and what it helps to deliver.Read more
Some providers include:
- The National Lottery Community Fund - This is the biggest community funder in the UK. It uses money raised by National Lottery players to fund 12,000 projects each year, providing grants of between £300 and £500,000 to community and voluntary groups, and charities.
- Power to Change - This is an independent charitable trust set up to support community businesses to create better places across England. There are many types of community business, including sports and leisure organisations, who can access both grant funding and support to grow and develop a community business.
- The National Lottery Heritage Fund - Like the National Lottery Community Fund, its and Heritage Fund rewards projects using money raised by National Lottery players, focusing on projects that help people enjoy and protect the heritage they care about. Sports organisations have already benefited from Heritage Lottery grant programmes, where eligible projects deliver outcomes for heritage, people and communities
- Local Funding - Local social sector grant funding is also available from a number of charitable trusts, foundations and Corporate Social Responsibility initiatives. A good place to start is Know How Non-Profit. Comprehensive listings can be found at Funding Central.
Social sector loans
In addition to mainstream finance providers, there are also specialist lenders focused on organisations that deliver a tangible social impact, as well as a financial return.Read more
Examples of social sector banks include:
There are also a number of local Community Development Finance Institutions that provide loans to community focused and socially-driven organisations.
A list can be found here.
Social sector bonds
Social sector bonds offer an alternative to loan funding for larger organisations looking to raise finance of more than £1 million over the medium term.Read more
Social investment funds
Social investment funds provide and use capital to generate social, as well as financial, returns. This can be in the form of both loan funding and equity investment.Read more
Typically, social investment is used to help an organisation grow by covering costs needed to deliver new activities and income streams.
These funds are managed by Social Investment Finance Intermediaries. With examples including: