Funding without the fatigue: Alternatives to grant dependency

In this week’s Frequently Asked Friday, we're tackling a question that’s becoming more common as the funding landscape shifts. Relying solely on grants can feel like running on a treadmill that’s getting faster every year – exhausting and hard to keep pace with. This week, Helen Oparinde, Sector Growth Coordinator, explores what other income options are open to charities, the rules you need to follow, and how changes in fundraising regulation and public procurement could affect your future plans.

 

Question

We are finding it difficult to keep our charity going through just raising income through grants. Is there an alternative?

 

Answer

Yes. The Charity Commission guidance on managing charity finances makes it clear that charities can get the funds they need in different ways – including fundraising, selling goods and services, and making investments. The key is making sure you know the rules for each approach and that your charity complies with them.

Trading rules
Charities may carry out trading activities that contribute directly to their charitable objects, or – if the purpose is to raise funds – activities that don’t involve significant risk.

The Charity Commission outlines three main categories:

  1. Primary purpose trading – directly furthers one or more of your charity’s objects, e.g. a charitable art gallery charging admission to an exhibition.
  2. Ancillary trading – indirectly supports your charitable aims and is treated as primary purpose trading for law and tax purposes, e.g. a theatre charity selling refreshments to its audience.
  3. Non-primary purpose trading – raises funds but doesn’t directly further your objects, and is permitted provided there’s no significant risk to your assets.

Read more in the Commission’s guidance CC35: Trustees trading and tax.

Fundraising regulation is evolving
We’ve previously talked about the benefits of registering with the Fundraising Regulator in our blog What Fundraising Regulator Registration really means for small charities.

From 1 November 2025, the UK’s fundraising rules will be updated. The Fundraising Regulator has produced three new support guides:

We also talked about passionate changemakers in I want to fundraise – do I need to start a charity?

Procurement law changes
The Procurement Act 2023 went live on 24 February 2025. Many charities and social enterprises rely on public service contracts as a vital income stream, and changes in the law, such as the new Provider Selection Regime for health services, will affect how these contracts are awarded.

The government has launched a consultation, Public Procurement: Growing British industry, jobs and skills, which closes at 5pm on Friday 5 September 2025. The proposals aim to open more opportunities for SMEs and VCSEs, making it easier to compete for contracts.

Have your say – this is your chance to influence how procurement works for your sector.

For a deeper dive into what this means for your organisation, join our free Meet the Series session with Richard Dickins, Managing Director of Social Value Business, who will explain how to position your social impact as a valuable asset and become a partner of choice in supply chains.

 

 

 

Date Posted
Image
Helen Oparinde, NCVS Group Support Coordinator