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National Council or Voluntary Organisations
Sustainable Funding Project
Case Study:WebPlay
Key themes Using loan nance to develop
a unding mix Achieving growth by developing an
earned income stream Using a business-like approach to
improve charitable work as wellas creating prot
Trading, not contracting,with the public sector
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Sustainable Funding Project Case study:WebPlay
WebPlay is an arts education charity that has grown signicantlysince being ounded in 2000. It has grown rom a turnover o20,000 to 500,000 in the UK alone. It has achieved this by usingloan nance to develop a unding mix. It has gone rom beingreliant on grants to receiving 30 per cent income through trading.The charity sells its project to schools, but does not contract withthe public sector, up to now. It aims to increase the percentage oearned income even urther.
DateThis case study is based on an interviewwith Sydney Thornbury, May 7, 2008.
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Summary
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WebPlay is an international artseducation charity. It was ounded in 2000by Sydney Thornbury. It started as a smallproject, working with 300 children in 10primary school classes in London and LosAngeles. Over the last seven years it hasgrown signicantly - last year it workedwith 3,120 pupils in the UK.
The WebPlay mission is to inspire andenhance the learning and creativity ochildren, linking classrooms locally andaround the world. The programmes use
drama and technology to make learningun, to broaden horizons and to supportthe development o childrens academic,personal and social skills.
WebPlay projects allow primary schoolchildren to collaborate online withother classes and a proessional theatrecompany to develop their creativity. Thechildren create a play based on what theyhave learned about their partner class.The plays are videoed and uploadedto a site so other classes can see them.
The project develops both drama andtechnology skills, and engages thechildren to learn about the world.
The project works in the UK and the US,but this case study will ocus on the UKoperations. The US part o the project isalso run on a sustainable unding basis.
WebPlay started as a small project.For the rst three years, it ran on ashoestring, with the director, one part-time member o sta and one employeeseconded rom a theatre company. In therst year, the project raised 20,000, andby year three, it raised 50,000. It was runentirely on grants at this stage.
By 2003, it had become clear that therewas a demand or the services WebPlaycould provide. The projects were cross-curricular, making them attractive to
teachers. By working with schools, theorganisation realised that there was amarket or their work.
WebPlay made the decision to registeras a charity, in order to develop as anorganisation. This was a key turning pointor WebPlay. However this move alsobrought nancial challenges.
Sustainable Funding Project Case study:WebPlay
About WebPlay How the project grew
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In 2004, WebPlay experienced cash fowproblems or the rst time. Previously,the director had used her own unds to
cover any shortalls, on the basis that themoney would be returned to her whenthe grants came in. This meant that theorganisation had been cushioned romthe impact o grant unding in arrears.However this was not a sustainablesituation: the director was unable tocontinue bankrolling the project, and inany case, the organisation realised thiswas not an adequate solution to theproblem.
At this point, Thornbury decided to
develop a dierent unding mix. She eltthat even i the cash fow situation couldbe resolved, being dependent on grantunding would always be precarious.The charity started to look at ways odeveloping income.
There was one obvious income streamthe charity could consider. At that point,schools were receiving the programmes
or ree. However Thornbury elt surethat they would be prepared to pay orthe service. Ater three years o deliveringprojects, she was condent the marketexisted.
The move to charging would be timely.Schools were being given devolvedbudgets, which meant they could decideto spend their money on projects such asthose provided by WebPlay. But to starttrading meant that more resources wouldbe needed to set up systems and plan
strategy. The organisation would needcapital to get started.
WebPlay invested time to ensure theirnancial systems were ready or a changein approach. One o the charitys trusteeswas an accountant, who spent time withthe director going through the nancesand nancial systems. In 2004, theorganisation was ready to look at loannance to develop their work.
WebPlay decided to approachVenturesome, a specialist provider oloans or the third sector. It invests in
projects that are oten considered toohigh risk by traditional lenders, andthe money paid back is reinvested inother projects. Venturesome placesan emphasis in high social impact, andworks with organisations to ensure theirwork is eective. Venturesome calls itsunding mezzanine nance. It bridgesthe gap between grants and loans romtraditional lenders, oering amountsrom 20,000 to 350,000. Loans arerepaid over three to ve years. The
rate o interest is decided on a case-by-case basis. For an organisation such asWebPlay, without any collateral,this kind o unding was crucial.
Dont make the mistake othinking that earning income is thesame as being sustainable. Earnedincome can ebb and fow just asmuch as grants and contracts.
This is why its important to havean income mix.
Sustainable Funding Project Case study:WebPlay
How the project grew About Venturesome
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External expertise: the organisationmade use o various sources to helpthem develop. In the early stages, aseconded member o sta rom atheatre company helped the project togrow. The organisation built expertisethrough its board, ensuring membershad proessional skills and passion or theproject. Once Venturesome had comeon board, WebPlay could call on thelenders or help and advice. Finally, theorganisation rents oce space throughCAN (Community Action Network)Mezzanine. It took advantage o asecondment scheme set up by CAN.A marketing expert rom Sony helpedthe charity to develop a marketing plan,and will work with them again on a webmarketing plan. The organisation hasbeen extremely proactive in ndingsources o help.
Loan fnance to trade: a loan providedthe organisation with more than justcapital, it was the starting point or aculture o change and innovation. Thesecurity o having reserves allowed theorganisation to take risks. Starting totrade also beneted the organisation.It had to listen to its customers, andensure that it was really providing agood service to its market. Thornburyeels that the charity would not be assuccessul i it was still grant-reliant, astrading had orced it to develop andrene its services. For example, to retainschools, WebPlay developed a regularemail communication with headteachersto keep them up to date with theprogramme and what they could expectrom their pupils. This provided a betterand more competitive service.
Management skills: WebPlay had tolook at its planning processes to scale upeectively. Thornburys approach wasto look at tools rom big business andadapt them or her organisation. Shewas cautious about bringing in modelsrom dierent sectors without looking atwhat purpose they served. The charityneeded tools that reacted to change.For example, the charity developed amarketing system, with a spreadsheeton marketing activities, with benchmarkgures and achievements. This workingdocument has been ar more useul thana lengthy strategy that gathers dust onthe bookshel. The charity has tried to befexible to adapt to the changing sector,with a strategy or three years ahead, butplans or just a year.
Identiying with the third sector:many arts organisations dont think othemselves as third sector organisations,and miss out on sources o support andunding. WebPlay has tapped into any
networks that can help. For example,Thornbury is a member o the Acevospecial interest group on arts, andregularly attends Sustainable FundingProject events.
Sustainable Funding Project Case study:WebPlay
Keys to success: What helpedWebPlay develop and grow?
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Sustainable Funding Project Case study:WebPlay
Sydney Thornbury oers advice or chieexecutives running organisations that arelooking to adopt a sustainable undingmix.
1. Adopting sustainable undingshould be a long-term objective.Dont underestimate how long it takesand how much impact it will have onyour organisation. Its not a quick x.
2. Dont make the mistake o thinkingthat earning income is the same asbeing sustainable. Earned incomecan ebb and fow just as much asgrants and contracts. This is why itsimportant to have an income mix.
3.Look or any and all opportunitiesto maximise income. Drill downinto every area o the work you do toidentiy ways to make money romexisting projects, as well as developingnew ones.
4. Develop networks o supportand mentors. Surround yoursel withpeople who have dierent levels oexpertise. Sometimes peer-to-peersupport is just as valuable as expertiserom mentors at a higher level.
5. Make time or yoursel. You cantwork fat out all the time; its notconducive to strategic thinking. Bestrict about your work/lie balanceand make time to do activities thatwill ocus your energies elsewhere.This will ultimately help you eel morepositive and achieve more.
The Sustainable Funding Project is an NCVOinitiative working in partnership with theBig Lottery Fund and Charity Bank
The project encourages and enables voluntaryand community organisations to explore andexploit a ull range o unding and nancingoptions to develop a sustainable unding mix.
The Sustainable Funding Projectwww.ncvo-vol.org.uk/sp
T: 0800 2 798 798
Links:www.WebPlay.org
www.caonline.org/venturesome
www.can-online.org.uk
www.ncvo-vol.org/sp
Tips or chie executives
