This blog article is based on my response to a poll and article on The Guardian – Voluntary Sector website about whether the voluntary sector needed to invest more in attracting commercial talent from the private sector. In case you were wondering, I voted NO on the poll. Below are my reasons why and more importantly some pointers for charity leaders on some reasonable responses to the funding crisis.
However, I also need to be clear that I’m sick and tired of this continued admiration for the private sector. It has crept into the public sector and voluntary sector over the years and and is constantly held up on a pedestal. I personally don’t think that it is so black and white and believe that the voluntary sector needs to stop living in the shadows and instead be bold and confident in the way that it operates if it is going to deal with funding reductions in these extremely challenging times.
I’m not saying that charities shouldn’t attract talent from the commercial sector; I just think that charities should attract talent (full stop) and continue to develop and nurture it. Rather than seeking to lure talent from the commercial sector, I’d give the following advice to my fellow charity leaders:
Don’t worry about being commercial; be charitable because that is what society needs you to be. Listen to your beneficiaries and make sure that you are doing the right things to help lift them out of misery and poverty. If you’re not helping to lift them to do that, then you should ask yourself the serious question “what are we doing and are we actually needed doing what we’re doing?” and revisit your organisation’s mission statement and really think whether you are achieving what it sets out to do.
Times are tight and a challenge for all. The Big Lottery Fund – Reaching Communities grant is currently awarding 6 grants for every 100 applications it receives and most funders are overwhelmed by the current level of demand from charities. When times are tough you MUST manage your resources tightly which means accurate financial monitoring and keeping your costs down. This may sound obvious, but it’s amazing how little financial cuts can have significant implications in the long-term. If you have made as many minor cuts as possible, then what are your biggest areas of expenditure (for most charities this will be either salaries or rents)? Have you explored all the options to bring these costs down? If this feels like a delicate subject then it is completely appropriate to source external and impartial expertise.
Despite the uncertainty, charity leaders should INVEST in keeping their staff motivated and ensure that they are solely contributing to the success of an agreed framework (e.g. a business plan with agreed KPIs) as when times get tough the plan can go out of the window which causes more stress and chaos for everyone. I also think that those charities with reserves should be more creative with them. It takes money to make money and just having it sat in the bank with virtually no interest is not responding to the needs of your beneficiaries or the best way to govern the charities financial sustainability. Have an accurate and thorough reserves policy that ensures that you’ve captured and allocated funds for all your current and contingent liabilities, but also have an investment policy that outlines what you intend to do with any remaining reserves.
Why not invest some of your reserves in profit making social enterprises (only ones that operate as a CIC as gives you legal guarantees) or an Industrial Provident Society (IPS) through social investment bonds and make your money work for you?
Also if you’re not currently receiving donations (it is incredible the number of charities who don’t) then have you asked “who are our supporters and why are they not donating?” A lot of small / medium sized charities are put off fundraising as it can be labour intensive with not much pay-back. But why not motivate and reward volunteers who are passionate about your cause, help them to learn new fundraising skills and put them into practice on your behalf?
Fully participate in third sector consortiums and deliver public sector contracts under a CIC legal model with profit being donated to the main charity (minimise the risk - maximise the reward).
Don’t cut your training budget. Being able to invest in the commercial abilities (and other needed skills and behaviours) of your workforce which will save you a fortune in recruitment costs and keep staff loyal and feeling valued in their roles.
The above is charity management. And my ‘top tips’ are not original ideas, there are charities up and down the country doing one or more of those suggestions, some doing them exceptionally well and some less so (much like businesses throughout the UK that provide the same products and services, but some better than others). What I would say is that if you’re in charity management (be that CEO, Operations Manager or Trustee) and you disregard most of these suggestions, you should write down what your alternatives would be. But do challenge yourself to come up with different strategies if you have been doing the same thing for the last 12 months and to date have had no positive results. Remember, it is possible to see changes, but it takes a little more time, effort and patience that you may be used to and in an ever changing world, doing the same thing usually results in exactly the same result. Maybe this is the time to start doing things differently?