How Can Charities Help Themselves?

As regular readers will know, the Back Britain’s Charities campaign has been urging politicians, businesses, the Government and the public to do what they can to support charities during difficult economic times. But we’re also aware that charities have to do what they can to help themselves, and that means making sure that they are as efficient as possible and diverting as much of their income as they can to helping beneficiaries and furthering their charitable mission.

An interesting report by Impetus – ‘Beating the Cuts’- has looked at the challenges that charities are currently faced with, and come up with a number of recommendations that, if adopted, could potentially help charities ensure that their finances go further.

The report’s conclusions urged charities to learn the following lessons:

• Short-term financial pressures should not create a ‘crisis management’ situation
• Keep investing for the future sustainability of the organisation
• Know your “customer” and continually refine your offering to appeal to these customers
• Concentrate organisation resources on the activities where they have the greatest capabilities and are most able to demonstrate tangible results
• Identify a deliverable and sustainable scope and scale of operations while remaining flexible enough to respond to new growth opportunities
• Develop and maintain a healthy mix of sources of income
• There is often scope to reduce costs without impacting core operations
• Your organisation could benefit from a wealth of external experience

The report was compiled following a difficult five years for charities since the global recession of 2008. The report argues that it “is unlikely that pressures on charity funding will ease in the short term” and cites research by the Charities Aid Foundation which uncovered a 20% drop in donations to charities over the past year.

Recognising that difficult financial times for charities look set to continue in the years ahead, the report asserts that the economic outlook for the sector means that there is a renewed pressure on social sector organisations to “prioritise excellent leadership, financial planning, and impact management.”

It’s crucial that charities do what they can to make savings and stretch their finances as far as possible. We know that times are tough and it can be hard to be optimistic, but thousands of charities across Britain are using innovative schemes and ways of doing business to stretch their resources further. The conclusions of this report are essential reading for those involved in the running of a charity, but we know that many charities – smaller ones in particular – still need help and advice. That’s why the Charity Choices programme we discussed last week is so interesting and certainly worth keeping an eye on as it develops, but in the meantime do take a look at this report and see what advice it holds for you!