I watched this happen in real life, and it still winds me up thinking about it. Sheffield Rebuild was a genuinely excellent social enterprise. Worth being clear about what that actually meant in practice: it trained unemployed, homeless, and NEET young people in a proper trade, gave them pride and self-esteem and a real route back into work. A charity that traded commercially to fund that mission, not a private business chasing profit. For years, that work ran largely on the back of one council contract. One.
When that contract came up for renewal, it went to a private company that undercut the price. Sheffield Rebuild, unable to compete on cost alone against a bid that didn’t carry the same depth of support, lost the contract and, with it, the income that had kept the whole organisation running. Staff were made redundant. The organisation closed.
Six months later, the company that won the contract went bust. They couldn’t actually deliver what they’d promised at the price they’d promised it for. By then it didn’t matter. The organisation that could have delivered it properly, and had been doing exactly that for years, was already gone, its staff scattered, its expertise lost, because the funding that had let it exist had all come from one place, and one place changed its mind.
That’s the shape of this failure every time. A single funder, however generous, however loyal for years, is not a permanent engine. It’s a temporary catalyst that happens to have lasted a long time, right up until a new head of commissioning arrives, a budget gets cut centrally, a cheaper bid comes in, or priorities simply shift in a direction that no longer includes you. None of that is a reflection of your work. It’s a reflection of the fact that your organisation’s survival depended on a decision that belonged entirely to someone else.
No single funding stream should make up more than roughly 30% of total income.
Not a rule against taking the big grant, take it, it changes what you can do. A rule against letting any single relationship become the one thing standing between your organisation and closure.
Ask yourself the question nobody at Sheffield Rebuild got to ask early enough. What would happen to your organisation if you lost your biggest contract or funder tomorrow? What would it do to your services, your staff, the people who actually rely on you? If the honest answer is “we’d fold within months,” you already know exactly what the 30% rule is protecting you from.
Want to work this out for your own organisation?
I’ve put together a free one-page Single-Source Risk Check, list your top three funding sources, work out what percentage of income each one represents, and see straight away whether you’re carrying single-source risk. Grab it free in resources →
