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I have direct experience as a trustee of a care home where, after a four year period, the local authority, which funds many of our residents’ care, at last offered a 1¼% increase. During that four year period the home has had to contend with wage increases; the minimum wage on which our entire wage structure is based has increased year on year; and food and energy costs have risen by more than inflation.
Therefore to be offered 1¼% after four years can only be considered to be derisory and merely puts an increased burden on having to fund the difference by way of top-ups from relatives.
The lunacy of the situation was exemplified a couple a short while ago when with our care manager I met three commissioners from the area. For some time now we have contracted to provide 4/5 "hospital to home" or "step down beds" at our normal weekly rate which are used by social workers to free up hospital beds. The meeting was to discuss expanding this as recently the house next door to us had become available and we were considering whether it would be worth exploring a possible extension to the home.
The commissioners we met said that without any effort at all they could fill up to 40 beds tomorrow with people who were currently in hospital as part of the classic bed blocking problem. For this, they were prepared to offer the normal weekly rate including the top up which they thought was somewhat generous.
As treasurer, I went away, did some research on the likely building cost and put a forecast together. Needless to say, on the amount they were prepared to offer (circa £450 per week) the numbers simply did not add up. Therefore we resolved not to explore this any further as it would be irresponsible as trustees to risk the ongoing wellbeing of the home on a project such as this.
When one considers it is estimated that the cost of keeping someone in hospital is approximately £225 per day at its very lowest, making a minimum £1,575 per week the nonsense of this situation can clearly be seen.
If the commissioners had been able to offer us something in the region of £750-£800, which is still around half the cost of a basic bed in hospital, then the project would start to make sense.
People are being kept in hospital longer, the NHS is incurring costs which are more than twice necessary and presumably somebody somewhere is unable to have hospital treatment because of this.
Research published by Age UK found that patients now wait an average of 30.3 days before finding a place in a residential care home, a rise of three days per patient since 2010. It has estimated that the number of days lost to “delayed discharge” was more than one million and an estimated cost to the NHS of up to £260m, since the Coalition took power.
With a population which is ageing this is a real problem that needs a solution. Care providers could be facing bankruptcy if councils continue to reduce the amount of money they pay to them. It has been estimated that a total of £2.7 billion less is being spent on care for vulnerable, elderly and disabled people across England than before the current round of austerity cuts began – a drop of a fifth in just three years.
Maybe we should go back to the convalescent homes that used to fulfil this function so well, as an intermediary between hospital and home. Clearly there is no easy solution but care homes are in real danger and we will fail our elderly if something does not change soon.
A retired British teacher, I am currently working in Uganda at Mount Zion Orphanage, supporting some of the poorest children in Africa. My initial experience with a particular Ugandan-based volunteer organisation provides a cautionary tale about charity tourism.
I had worked in civil war torn Mozambique in the mid-80s, helping teach English to medical technicians, and working with boy soldiers to help reintroduce them to society. The issues faced by the people of Africa were something that became very personal to me – as did the reward of working hard to help. After taking early retirement from teaching, I wanted to find a relief project to get involved with, somewhere where I could use my skills as an educator.
An internet search led me to Mzungu Volunteers, a Uganda-based volunteer organisation which was set up to connect overseas visitors interested in volunteering with needy projects in Uganda. I applied for a position and, because of my experience, was immediately invited to help run an orphanage which is based near Kampala. I was told that the orphanage had 80 children and was going through a redevelopment programme and needed help and guidance as well as financial support.
Arriving in Uganda, I became ill with a bug and spent my first 24 hours in the country in hospital. It was a tough start to an adventure that was only going to go from difficult to worse.
A large donation
Once well enough, I went to the Mzungu Volunteers headquarters and handed the president a large donation that I had brought with me from the UK. I was given a receipt and told the money would be used for building materials. I was then taken by a Mzungu assistant to visit Kampala and immediately recognised that all was not as it should be. The staff were initially very unfriendly and non-communicative, the facility was a school of 150 kids, 32 of them were orphans, and the building they were in was rented rather than owned so they were not at liberty to do any building repairs.
I managed to persuade the staff that I was legitimately trying to help and found out that the school doesn't receive any money from Mzungu Volunteers but they were in desperate need of aid and support. My shock at the situation I was in has turned into suspicion about much of the volunteer tourism system as it became clear that mine was not an isolated story.
I did make an attempt to get the money back from the Mzungu Volunteers HQ without luck and began, instead, trying to make a difference in the school. It was clear straight away that rather than managing the programme the most urgent job was to plug a hole in a sinking ship.
After a couple of weeks working directly with the school to build a fundraising mechanism, establish a volunteer programme and fix the urgent needs of the children, another two volunteer tourists arrived. Two Spanish volunteers arrived to help teach and undertake some construction work, having purchased a volunteer vacation from Mzungu Volunteers.
The vacation promised had turned into the holiday from hell as they reported having had money stolen from belongings which they had left at Mzungu HQ and had international flights booked on their credit cards. A little investigation with help from a lawyer friend revealed that this was not the first occasion of this kind of treatment of paying visitors.
A fraudulent organisation
It was clear that the efforts of staff and supporters at the Mount Zion school and orphanage were being undermined by this fraudulent organisation and so I went to the police. It's worth noting that Ugandan police require any investigations to be done for them and to be provided with travel expenses if they need to speak to witnesses or apprehend suspects.
Following an investigation of my own, I worked with police to bring a charge against the leader of the Mzungu Volunteers. It's unlikely that many of the schools, orphanages and community projects associated with Mzungu Volunteers will ever see the money promised, or the volunteers who gave their time and money will ever get the sense that they've made the difference they wanted to. However, the need is still there and for one orphanage at least there's new hope.
A programme back on its feet
Mount Zion Orphanage now has its own volunteer programme – which is transparent about money, projects and challenges faced. A website has been set up which is being run by staff at the school and a Facebook page established with over 300 likes. Donations of clothing, mosquito nets and money are being sent to the programme. Small amounts of money make a huge difference – a teacher's monthly salary is equivalent to £50.
The website has already had a positive impact, with volunteers due to arrive in the coming months. The past month, the school has seen radical changes – from running water to a new dormitory and a laptop for staff to maintain the website. This has created a new optimistic, hopeful atmosphere.
I was determined to make something good come from the bad situation the school found itself in – and help those foreign visitors who are motivated to offer time and hard work to contribute directly to the school and not to any middle men who are syphoning off cash.
Have I learned any valuable lessons? Every day I've been here. Most importantly I'd say don't get down-heartened and change your mind about volunteering or donating. Those in need have been struggling for too long and swindled out of money that was earmarked for them. Take your time to do your research. Here are some pointers:
• Often the local charity or organisation which is at the point of delivery is connected to a supporting donor charity in the UK. If you're nervous about their legitimacy, check their credentials through the Charity Commission.
• Be wary of "middle men" agencies who recruit volunteers, often with an inducement of a safari package or rafting trip, and then farm them out to existing schools and orphanages without support . You may not be as welcome as you think.
• A sophisticated internet advertising campaign can lure you in but the reality may be very different. Take time to get references and testimonials.
• If you experience something that appears corrupt report it. Too many people are too embarrassed to tell friends and colleagues after they've originally made a noise about going to the other side of the world to help those in need.
• Donors are often more interested in new projects than in maintaining old ones. They like the "we did this" satisfaction of it. Consider supporting an existing programme which has a clear route in that others have already followed.
Leading to a bad reputation
The British generally have a bad reputation in Uganda and are not well trusted. Too many promises made and not delivered or money spent on what is seen as a "nice to have" while urgent life-threatening issues go unresolved. Trust is key – both with the Ugandans and the volunteers. A couple of examples of bad practice, local corruption or ineptitude lead to scores of donations and offers of help drying up. Trust develops best through mutual respect, friendship and familiarity, and can be demonstrated by processes and control.
A large amount of the donors' contributions is spent on the management systems that are needed to ensure the money gets to the right place. The larger the operation the more management, often white. The small scale operations can be effective in getting to know your colleagues and building trust but finding the legitimate ones from a distance is hard.
So is voluntourism worth the effort? If you can raise money to send, you should. If channelled through a proper source, it's the most effective way to help. If you want to offer your help then take the time to research the options, protect yourself and your donation, and make sure that your good intention becomes a great experience for everyone.
As we see many people facing continued economic difficulties and public sector cuts continuing, it is perhaps not surprising that charities will also suffer. Of course, most people don’t stop being philanthropic or charitable because times are hard, but they may have to change their giving plans due to their current circumstances. And the charity and voluntary sector has to adapt.
At Community Foundation for Merseyside we work with a wide range of community organisations across the region, from small grassroots groups to large, established charities, and have really noticed how those organisations in Merseyside have had to become more innovative than ever to deal with the changing landscape of giving.
Many of the donors we work with are also adapting the ways in which they give. One of the biggest changes has been the increasing switch to online giving, the benefits of which are several fold. It offers a constant presence through which charities and groups can connect with potential givers and offers greater audience reach for low cost.
Well planned, targeted social media engagement can be one of the most effective ways of forming relationships with possible volunteers and donors. It allows people who are interested in giving, no matter how big or small, to find organisations they would like to help. Social media is also a great tool for charities and groups to communicate their messages.
Last year, for example, we launched Localgiving.com which gives small, grassroots charities and community groups an online portal through which they can attract and manage donations.
Localgiving.com has also developed a "Grow Your Tenner" match funding campaign which encourages people to give small amounts on a regular basis, supported by match funding and which enables the sum to be doubled. I think campaigns such as this are absolutely vital for boosting funds in the short term, whilst also promoting long term relationships with donors.
Whilst we all hope that charitable giving, in conjunction with the economy as a whole, picks up again in 2013, it’s important that the charity and voluntary sector continues to adapt, innovate and share learning in order to support a culture of giving, and continues to meet the needs of local communities.
It was an exciting prospect, taking a successful charity through its next stage of development. Cats Protection is a world leader, focused on cats, but depending hugely on people. The challenge was the massive everyday pressure on everyone, which made strategic design and delivery seem like a luxury. I’ll let the figures speak for themselves, but they are mind-boggling. Last year we helped 235,000 cats!
The first task was to revise the strategy. We’d inherited a superb one-page vision, values and objectives statement. But hang on – where was mention of volunteers, or growth in our primary work? The trustees saw it immediately, and were really supportive. We consulted others and they saw it, but asked "How"?
The second task was to reshape the management to line up behind delivering the revised strategy. With 7,000 people, 95% being volunteers, operational leadership and support was crucial. Again, trustees were superb – questioning, challenging, and then fully behind the changes. At the same time we updated the governance model and new trustees were recruited to add further strengths. We believe wholeheartedly that there are always wonderful volunteers out there to act as trustees and in other roles. It’s up to us to have the skill to find them and help them support our work.
Rehoming and reuniting cats
We do three things. We rehome and reunite some 50,000 cats each year. Phew! That was the core work that mustn't be damaged by changes. We were neutering 98,000 cats a year, to prevent more unwanted kittens. We wanted to increase that, but it costs money – serious money. We were described as like a two-and-a-half legged stool as our third objective, education, was small compared to the huge numbers of cats helped.
We deleted over 25 paid posts, when possible by managing vacancies, and we recruited staff to deliver strategic priorities – cat work, education and advocacy, volunteering, learning and development. We put in place a new performance management system, and invested in leadership development and project management.
Initial loss of savings
There were things that weren’t initially successful. We had savings of £11m earmarked for capital developments which went down because the UK bank we used had been bought by an Icelandic bank before the 2008 banking crisis. We have now got most of it back, and so can boast a great new homing centre in Ferndown, Dorset, and a rebuilt adoption centre, in Belfast – double the original size. Both of these were strategic priorities.
We should see the remaining balance returned within a year or two now, but it was a sweat! Our supporters were wonderfully loyal through this. I personally wrote to every one of them as soon as this hit us and we have kept them updated.
So where are we now? Volunteers remain at the heart of the strategy and we will soon hit 10,000. Is that a 40% increase or are we better at counting now? We just do not know, but I have met so many new volunteers that I know for sure that people are still joining our charity because they want to support our work.
Our beneficiaries are cats, and while rehoming numbers stayed flat for some time, neutering grew to 191,000 each year, an increase of over 90%.
The impact of the recession
Then the recession hit, and cuts were affecting everyone. House prices, and hence legacies, went down. Donors saw their incomes hit. Yet at the same time demand went through the roof. We had always been full, with some 6,200 cats in care at any time. The phones started ringing continuously with people not wanting to give up their beloved cats, but having to do so. People in tears. Job losses. Homes lost. Family breakdown. And the cats suffering.
I take my hat off to our wonderful people who answer our phones, a small team at the centre and volunteers and staff all round the country. It can be a thankless task: “But you are Cats Protection. You’ve got to do something to help us!” It can be so hard explaining that, yes, we will, but 95% of our people are volunteers, not magicians who can create extra cat pen space every day. Yes we will help, but please, please be patient.
One of the amazing experiences of our work is the phone call which says that we are needed to handle a multi-cat household. That could mean a house or flat with anything from 10, 50 or even more cats living there. The one thing you can be certain of is that there will be more than expected.
Someone wanted to help, took in a few strays, and then others needed help. Soon it got out of hand, and neutering dropped off the urgent list. We often hear: “I don’t know how. They were brother and sister.” The answer is simple: one un-neutered cat can be responsible for 20,000 kittens over 5 years. Before that happens we have to intervene to help, and every day counts.
Often our people are accepted as helpers, when uniformed officers aren’t let in. We work alongside other charities, housing, social services, anyone who can contribute to a solution. We mobilise people to go in, trappers, drivers, local vets are on standby.
Thinking on the spot is crucial
Every case is different and planning can only take you part way. Thinking on the spot is crucial. But every pen is full! Fortunately we home 1,000 cats each week, so pens do come empty, waiting lists may need to be juggled. Although cats really like to live individual and solitary lives, like the African Wild Cats from whom they are descended, we can and do double up cats from the same family on occasions – only after they have been neutered, of course.
Another crisis hit recently. We operate a domestic violence project, called the Freedom Project. When the abused partner wants to leave home, sometimes fear for the safety of a cat or dog is the tie keeping the vulnerable person in that abusive environment. The children won’t go without being sure that their companion is being cared for.
So we look after the cats, and colleagues at the Dogs Trust take the dogs, since refuges rarely take pets. Sadly we have just heard that we have to find a further £15,000 to keep even our limited work going on this project.
Already staff are spending weekends as volunteers out raising funds for this vital work – yes vital, life-saving, potentially for both cats and humans. Every extra day spent in a violent relationship risks further violence or even death. Charities have to demonstrate public benefit, and this project is a different angle on what we do in terms of public benefit.
What cats can mean to people
People sometimes ask about the work saying, "but it’s only cats”. To understand the importance you need to see what cats mean to the people they live with. Our supporters are loyal, and often thank us for what we do on their behalf. Cats don’t cause recessions, but they suffer as a result. They are sentient beings, with feelings, positive and negative.
I like the quote, attributed to Gandhi and others: “A nation's greatness is measured by how it treats its weakest members.” The importance of this is the focus on all members of society, animals and humans. People want us to do this work, they give their time as volunteers or give funds for it, and that is a measure of how important those people regard the work to be.
We have made a start at developing our education work. Our operating model uses volunteers, so we have a tiny team of education staff, recruiting, training and supporting volunteer speakers with the skills to go into schools and adult groups. We have recruited 22 in just one year. Our vets run professional development courses for vets in practice and support vet students with extra-mural study opportunities.
We also have a range of educational resources for schools to use, and these can be downloaded free. We know that they are used right across the world, and even translated by local groups abroad. Our education work is growing fast and in the first few months of this year we have spoken to audiences of over 3,000 people, adults and children across the UK. It’s an impressive start, and we are committed to growing this further.
Daily pressures can be enormous
So back to strategy. Daily pressures can be enormous in this charity. 95% of our people are volunteers with huge commitment. It is not uncommon for me, when visiting branches, to hear people talk of their paid job as an interruption to their real work of volunteering to help cats. Homing is still the core work, and yet this is trying to solve a problem for the cat after it has arisen. Neutering is preventative, from the point of view of the animal. Education is preventative from the human point of view.
Our charity is nearly 85 years old and in that time it has changed society in its attitude to cats. In time our education programme has to change society more, so that cat owners take responsibility for their animals, through neutering, right through to death. Then our homing work can reduce, as can the suffering that we try to prevent and deal with. Our vision is a world where every cat is treated with kindness and an understanding of its needs. We have a way to go, but with the people we have, and good leadership, we are heading that way.
By now, we're all too familiar with the "current economic climate", as it is euphemistically referred to. What we mean by this, of course, is a vicious recession, a stagnating economy, increasing unemployment, public expenditure cuts and, for our sector, a marked decline in donor confidence. The voluntary sector has certainly taken more than its fair share of the resulting hit, with estimates suggesting a 5% reduction in the national charity workforce over the past 12 months and the stark assessment that this year is likely to be the hardest for the sector in over a decade. What better time then, to start a new job?
I joined the Stroke Association in October 2011 to lead on a project to relaunch the organisation around the occasion of our 20th anniversary. This relaunch is being brought to life with a whole raft of events, including launching a new campaign at the start of the first ever Action on Stroke Month; an updated redesigned website; and encouraging people to celebrate the lives and achievements of stroke survivors while showcasing a dynamic and contemporary new brand.
Having worked in the voluntary sector for the past 12 years, I was always intrigued by the Stroke Association. This interest developed further as I started to see their work appear increasingly in the sector press and how frequently they were shortlisted for a myriad of third sector awards. I'm proud to be part of an innovative and progressive organisation which does remarkable things for people affected by stroke. Stroke is one of the greatest health challenges of our time. It is the third biggest killer in the UK, after cancer and heart disease; and the leading cause of severe disability in adults.
Joining any new organisation is a not the easiest process. Getting up to speed quickly with new ways of working, understanding new structures and delivering a new strategy can be somewhat challenging. But the challenge is increased when that organisation has come through a period of rapid growth, as the Stroke Association has experienced over the past five years.
Major successes achieved
We've achieved major successes – lobbying for an NHS stroke strategy in all four countries of the UK, increasing income from £13m to £30m and growing staff numbers from 350 to nearly 800 in order to reach directly to 35,000 stroke survivors every year across 350 services. However, it's even more of a challenge to come in at a time when things are starting to look less rosy.
Despite a prolonged period of growth, and despite resisting the seemingly endless onslaught of the "current economic climate", the Stroke Association is not recession proof. Earlier this year, announcements were made of 28 redundancies amongst the charity's 800 staff.
Though disappointing, it was perhaps inevitable that job losses would have to come in order for us to make around £1.8m of savings to ensure a balanced budget in 2012/13. We took this as an opportunity to start creating a more focused structure which better serves the needs of a much bigger and far-reaching organisation. Standing still was not an option. We seized the chance to adapt and evolve into an organisation which is able to be more focused and better heard in an already crowded voluntary sector market.
Savings through efficiency
The majority of these savings have been made through efficiency gains (another euphemism), reducing travel, cutting back on unnecessary expenditure and a freeze on non-income generating posts. But these cut backs can only go so far, and sooner or later, like any other organisation, we had to look at head count.
We made the decision to reshape in the most informed way possible: mining data on audience insight, support data and customer needs like never before. This represents a profound step change for us – looking outwards more than inwards. Constantly assessing decisions against our mantra of "what does this mean for stroke survivors?"
Charities should always be taking a long term approach to keeping costs under control, working smartly and ensuring that more of our donors' money is spent on doing what matters most for our beneficiaries. The Stroke Association has been doing just that and despite the recent cut backs, there is still much to be optimistic about as long-term plans are now in place to move the charity into a stronger, more successful future. We can afford to be optimistic because we have been developing plans and resourcing to meet our challenges for the past two years and the charity's 20th anniversary provides the backdrop for much of these plans to come to fruition.
Full fundraising team in place
So why the optimism? Well, firstly, for the first time in a number of years, the Stroke Association has entered a new financial year with a full fundraising team in place. The NHS Future Forum recently highlighted the charity's services and recent investments in IT infrastructure have removed many of the barriers to efficient working and getting the most from the data that we hold. But above all else, the thing we're most optimistic about, the thing we're most excited about and the thing that has the greatest potential to move our charity forward is our new brand. We've spent the past 18 months researching, developing and preparing for the launch of the brand, which now permeates through everything we do.
Through this period of intense change, it has been vital to make sure that staff feel informed and able lead the changes. At the end of last year our Directors' team visited every region to deliver a series of road shows to all staff. The presentations and discussions at those events have informed the planning for our 20th anniversary activities and also helped us to make sure that we are delivering everything that our colleagues need to launch the brand and Action on Stroke Month in May this year.
This year we built on the messages and dialogue from those road shows in a series of staff conferences to develop concrete plans for involvement and engagement from every part of the charity. And across the charity the excitement about our new brand and new approach is palpable. The early brand research with staff, volunteers, beneficiaries and other stakeholders has really borne fruit. When people see the new logo and colours, when they hear about our new messaging framework it is clear that it speaks to them and speaks for them.
Also, this enthusiasm is spilling over into practical planning and implementation of a huge range of events and activities starting with Action on Stroke Month. Providing our people with the tools they need has unleashed their creativity and passion, which is why my optimism is not just based upon hope. My optimism is based upon the ideas and plans that are coming from across the Stroke Association which, I am sure, will help us to weather the "current economic climate" and to emerge from it stronger and ready to grow.
Bringing the organisation closer together
In conclusion, we're using our 20th anniversary as an opportunity to bring our brand to life, but this is more than just an external facing promotional push. This is about bringing the organisation closer together, adapting to the parts of the external environment that are here to stay and moving ahead as one unified community of people that are for life after stroke.
We've taken the short term measures to bring our costs in line with our expenditure but we've also taken the longer term view that you don't get a second chance to take advantage of the first signs of recovery. We've changed the way we look, what we say and how we say it. We're mobilising all parts of our organisation to be fundraisers and to be a Stroke Association champion to others so that we can grow our supporter numbers significantly. We're changing our approach to volunteering and how we support volunteers. We're putting more money into the lifesaving research we fund. And we're asking everyone to help increase awareness and understanding of who we are and the difference we make to the lives of stroke survivors and their families.
"…the thing we're most excited about and the thing that has the greatest potential to move our charity forward is our new brand."
Managing charities in this financial climate
FROM THE EDITOR: Right now everything appears doom and gloom in the charity sector, with a great wave of financial pressure bearing down on charities. The management of charities can be forgiven for shuddering at the approaching spectacle, with advance ripples already having a nasty impact. When trustees and senior executives have hitherto been pushing forward purposefully with their charities, what they are now being confronted with must be demotivating to say the least. Having to run hard just to stay where you are is a demanding task – having to run hard and then find yourself moving backwards is even more difficult to live with.
This discussion feature looks at whether it is still possible for charity managers to move their charities forward or whether they think charities will be reduced to operating defensively, just trying to plug gaps caused by money drying up. We have contributions from the Society for Chemical Industry, RoSPA, Rainbow Trust Children's Charity, the Cancer Recovery Foundation, North West Air Ambulance, Wimbledon Civic Theatre Trust, and Soham for Kids.
All these contributions, in their own different way, reveal a determination to press on with their particular cause, thinking afresh within a disciplined approach. These charities will do more than simply survive during the current financial crisis. They will emerge more effective and more successful, offering an example to the rest of the sector.
Consideration of downsizing should be seen as positive
HAMZA ALI, director of finance and IT at SOCIETY OF CHEMICAL INDUSTRY (SCI), comments: The current financial situation means that there has at least to be consideration by charities of downsizing, but downsizing shouldn't necessarily be regarded as a negative development.
Yes, it is inevitable that downsizing will result in realignment of services with a reduced number of staff, and the charity will have to review its objectives in order to determine how and what to deliver to its beneficiaries. But it is also an opportunity to re-evaluate the reduced level of services and redefine the mission statement for maximum impact.
However, it will mean change; it would be futile to assume otherwise. Nevertheless, the sector with its enthusiasm and passion for making an impact should bear in mind that sometimes doing "less is more".
In all organisations it difficult to downsize in a downturn; in the charity sector it is particularly difficult due to the ethos of the sector. However, downsizing is a necessary exercise if the charity is to survive and rejuvenate in times of financial stress.
The recent evidence of the private sector cutbacks of 2008-09 shows that the rapid cutbacks early in 2008, while severe, in fact cushioned the eventual rise in unemployment. Although it was drastic and painful, it would probably have been worse if it was not done at the time. Economists and forecasters were pleasantly surprised the unemployment did not rise into double digits by end of 2009. It is a management practice adopted from the surgeon’s textbook, “cut clean, cut deep”.
Downsizing can create an opportunity for the charity to convert inertia into efficiency. The executive need to ask; why downsize? Is it a good idea? While it may be obvious to cut back on staff costs due to a major shortfall in funding in order to simply survive, there are other imperatives too;
i. What is the commercial reality? Whether good or bad depends on the underlying strategy and implementation.
ii. Reduce the major cost base – salaries are over a third of total costs in the charity sector.
iii. Revitalise struggling organisations by re-aligning processes and staff levels to customer needs.
iv. Creates opportunity for talented and committed staff.
v. Restate values – allows staff to "opt-in" or "opt-out".
vi. Signal a clear message to stakeholders about the determination of the charity to succeed.
Any major change comes attached with major risks; downsizing is no different. However, awareness of the risks and lead time would mitigate the impact, if not altogether eliminate risks. The main risk factors are;
• Regulatory – protracted disputes and tribunals. Settlement costs.
• Reputation – detrimental impact on customer service. Loss of brand value.
• Leakage – skills and activities "lost between the cracks".
• Decline in revenues – lost donations and supporters due to lack of follow-up and shortened outreach.
• Cash outflow – upfront redundancy payments; a long lead time for recovery.
• Key personnel – loss of knowledge, but replace with consultancy.
HAMZA ALI of SCI continues: It would be a pointless tactic to downsize without clear expectations of the desired outcomes. Someone said "even a crisis is an opportunity". The executive should have clearly defined outcomes following a significant change in direction after having invested a huge amount of time, effort and money in downsizing the organisation. The generally desired outcomes would be:
a. Drive efficiency – increase profitability with a lean structure.
b. Realignment – focus tasks towards customer needs. Less is more.
c. Value – reduce non-value added tasks; deliver high value customer benefits.
d. Effectiveness – reduce administration and streamline procedures.
The skills set for the future will require the charity sector to be nimble with lateral thinking change management and an innovative attitude. There is evidence of these skills in the emerging niche charities which are operating at the cutting edge of service delivery. Similarly, many of the established large charities are moving in this direction.
There is a paradigm shift visible in the sector – the numbers happen to be the outcome. It is the impact of the service which makes the difference. Succession planning and business continuity planning are essential in order to maintain organisational capability above individual players.
All a bit clinical and textbook management I am afraid, but that's what the charity sector needs at the moment.
A real chance now to show what we can do
TOM MULLARKEY, chief executive of the ROYAL SOCIETY FOR THE PREVENTION OF ACCIDENTS, comments: For some charities, the recession is a serious impediment to operation and many have already gone to the wall. Those which depend on a Government revenue stream that has now dried up may see limited alternatives and looming disaster.
At RoSPA, our approach has been entirely different and (touch wood) does seem to be working. Firstly, we have structured ourselves not to depend on Government funding, although when it has dried up in some areas (our turnover has fallen by 50% because of this), we have had to, unfortunately, terminate some project- dependent contracts. Equally, we are capable of expanding again when the opportunity arises, as it surely will. Building this thinking in from the start has been very important.
The recession and the dearth of public funding have spurred us on to look differently at the world. We have re-examined all our well established activities and found them to be in need of, and offering potential from, an overhaul. We have outsourced and de-risked one major function as a result of this examination; we have found much potential in others. Growth, where it was thought not likely to be found, has been found.
Energy and creativity within our excellent staff have uncovered these opportunities. More widely, notwithstanding the relative status of our UK activities in the key areas of training and consultancy, we are looking overseas much more actively and this too has proved to be productive.
Most importantly, within the uncertainty that is occurring in the UK public sector, there is opportunity. The reorganisation of public health services in England has given us a real chance to show what we can do to reduce accidents and, in turn, this can save the taxpayer a lot of money, ensuring that our safety interventions, we hope, will be more than ever in demand in the longer term. We are trying to shift thinking, aligning it to Government policy and campaigning for common sense, low cost/high value accident prevention. It seems to be working.
One thing for sure is that our political masters need creative solutions too and because we are keen to invent them, we are seen as an organisation with a lot to offer. Public health achievements are generally slow and expensive to deliver; accident prevention can produce measurable results, including savings to the NHS, within the lifetime of a Parliament. We like to think that we are innovative and flexible. So far, this recession is proving that we are.
The necessary focus for charities management
ROBERT DERI, director of finance and administration at RAINBOW TRUST CHILDREN'S CHARITY, comments: We are currently living through probably the worst global economic downturn since the 1930s and the charity sector is certainly not immune to the effects of low economic growth, unemployment, high taxes and general uncertainty. This volatile environment certainly sorts the "wheat from the chaff" in all business sectors and charities are no exception.
Previous recessions have been relatively short in duration and not as deep. And management tended to follow the typical tactics of "battening down the hatches", postponing investment and reducing staffing until the upswing comes. However, given that this recession is likely to continue for a considerable time, organisations which continue to downsize and refrain from investment will put their long term futures at risk: it is certainly true that they won't "shrink to greatness".
So what kind of management is needed in charities to win through? Different charities will face varying issues and priorities but management must be focused on:
PEOPLE – strategies to retain and develop good employees. Inevitably, financial issues and increased competition will put serious strains on human resources. The pressures on frontline workers are already intense with relatively low wages and benefits. However, management must recognise that people, including volunteers, are the most valuable asset in the organisation and are the key to success in difficult times. Employee engagement is crucial – involved people are motivated people and that makes a big difference
LOYALTY AND DIVERSIFICATION – strategies to strengthen donor loyalty and diversify income streams. The recession changes the dynamic of income and wealth creation in the economy and it is vital for management to be alert and develop new opportunities
EFFICIENCY IMPROVEMENT. Charities are generally at a competitive disadvantage when increases in demand or new technology require capital expenditure given the difficulties in raising investment finance for organisations whose aim is "not for profit".
A focus on the charity's impact and effectiveness with well defined key performance indicators and benchmarking will highlight where improvements should be made. Good management will build capital requirements and efficiency improvements into a well defined strategic plan rather than just continuing to fund inefficient operations through donor funds.
AN INTEGRATED BUSINESS PLAN – stretching out at least 3 years to ensure all parts of the organisation are working towards common goals.
ROBERT DERI of RAINBOW TRUST CHILDREN'S CHARITY continues: Alongside the challenges, however, good management teams will be looking to exploit opportunities. The world does not stand still and we are seeing social and demographic shifts with, for example, a growing elderly population.
There are new sources of funding arising with the growing willingness of businesses to forge partnerships with charities, wealth from increased levels of inheritance between the generations and new wealth created by the "internet world". We are also seeing encouragement of the not-for-profit sector by central government to forge partnerships and play a much bigger role alongside public sector services
Within the sector there are clearly many capable management teams who are building great organisations and shaping their charities to thrive in the current economic environment. The adoption of good business practices is increasingly evident across the sector – whether that be charities marketing their product, segmenting their markets, focusing on their core products or formulating business plans.
At Rainbow Trust we are very focused on delivering our core strategies; gaining 52nd place in the prestigious Sunday Times Top 100 Best Not-For-Profit Companies To Work For 2012 is testament to the employee engagement strategy, including some real innovations in the charity sector such as performance related pay.
Our Integrated Business Plan is well developed and we are incorporating return on investment profiles to a far greater degree. Through conversations with other colleagues in the sector it is clear we are not alone in developing our organisation. The charities sector is proving resilient and there is little evidence to suggest that management teams are being overwhelmed by the challenges they are facing.
Acknowledging and celebrating success
HANNAH BELLAMY, executive director of the CANCER RECOVERY FOUNDATION, comments: Charity managers are now having to apply a sharp edge not despite current financial pressures, but because of them. The squeeze on finances is coming from all sides. As grants dry up, running costs are increasing and individual donors are becoming more difficult and expensive to entice and keep. Especially those all elusive regular major donors. Times are particularly difficult for small charities such as ours as the larger organisations are pushing extra hard to be heard, and the Government's emphasis on giving favours household names.
However, as difficult and challenging as it is, this is not the time to feel defeated or even overwhelmed. It is a time to motivate employees with, and because of, the importance of the cause. It is a time to collaborate with charities we may previously have seen as competition. It is a time to understand the need for our work and the impact of it. And it is a time to finally shake the incorrect assumption others have that our sector is lacking in entrepreneurial business skills.
This is not to say that the challenges we are facing are enjoyable or easy. They are not. Losing a member of staff from a small team to save costs is difficult for everyone. Similarly managing an increased demand on services as team sizes shrink confounds the issue. But if these challenges are faced and overcome, there are rewards.
In the past year, the Cancer Recovery Foundation has seen an increase in applications for our help rise by well over 200%, and this is not a trend that looks to reverse any time soon. At the same time, we have decreased our head count by over 20%. However, we have pulled together even more tightly as a team by focusing on the work we do, why we do it and how we can do it in the most efficient way possible.
Acknowledging and celebrating our wins is the best way to do this. So, learning, for the first time, that over 80% of the people we help feel more positive about their cancer diagnosis and will make changes to their lifestyle to aid their recovery, thanks to us, was something to celebrate. Some charities are reluctant to bow to the increased pressures to measure and evaluate their services, but learning nuggets such as these can offer valuable insight as we develop our services and let the funders who we do approach understand why it is that our services are so important.
HANNAH BELLAMY of the CANCER RECOVERY FOUNDATION continues: This is also a time to look at who charities are, and who we are talking to and why. It may seem counter-intuitive as we are cost saving, but in the past year we have implemented a re-brand and are continuing to increase our profile through marketing and PR efforts. It is important that charities do not repeal marketing spend. But, as with everything else, they revisit it. While targeting is important, too many charities approach donors and beneficiaries as entirely different audiences. Often, and especially when dealing with a disease like cancer that will affect 1 in 3 of us, this is not the case.
So, we have managed to reach more people despite cost savings, and we have let our donors know what they can do to tackle cancer. It doesn't involve pink ribbons or cake sales. It involves assessing lifestyles and understanding what choices can cause cancer. If we do this effectively, not only will these donors continue to support us, but they will benefit as we do. And we may just finally see a decrease in applications for our help as they put what we preach into practice.
New markets and targets for fundraising
LYNDA BRISLIN, chief executive of the NORTH WEST AIR AMBULANCE, comments: According to the best estimate of the Charities Aid Foundation, charitable giving in the UK reached £11 billion in 2010/11. This was an increase of £0.4 billion on the previous year's figures – however, when inflation is taken into account, this figure is, at best, flat.
Dealing with budgets that are lower both for households and for businesses is a real issue for charities, and finding new ways to encourage donations is essential. It is not enough to sit back and hope for the best. Rather, we as management need to be proactive. It is still possible to drive our charity forward by adopting innovative approaches to ensure we can raise the funds we need.
For the North West Air Ambulance, diversification has been a major part of our strategy, identifying new markets and new targets for fundraising. The state of the economy has encouraged us to look at a variety of different industries and to become more commercial. For example, we are planning to launch a new energy referral scheme, which we hope will help to generate more income for the charity.
Our commercial focus has also seen us give something back to our donors. Our affinity accounts with building societies now offer a higher rate of interest, which not only encourages more people to take up the offer and brings in more funds for us, but also rewards existing account holders and demonstrates our appreciation to them.
Another focus for us has been on engaging with businesses and becoming their chosen charity of the year. We have focused on making ourselves known to corporates and, most importantly, on persuading them to take us on. At a time when businesses must justify every penny of expenditure, we have worked hard to convince them that CSR remains vitally important and that we can help them to fulfil their responsibilities. And for those which have chosen to work with us, we have not simply walked away once the papers have been signed. We have managed the project over the course of the 12-month contract, keeping communications open and strengthening our relationships.
Indeed, communication has been key across the board, keeping supporters up to date, listening to what they've got to say and making changes wherever necessary. We have made a conscious effort to promote the different ways people can raise money – whether it's recycling textiles, donating to or shopping at one of our charity shops, entering our lottery, fundraising as a volunteer at an event or shopping online. We have also tried to make more people aware of the fact that the air ambulance is, in fact, a charity, and that we need their funds.
This strategy has proved very successful for us in 2011, with donations increasing across every discipline. There is no doubt that fundraising will continue to be challenging in 2012 and beyond. But with continued communication, commercial thinking and diversification, there is reason for all charities to be optimistic for the future.
Being small scale and local
MIKE RAPPOLT, chairman of WIMBLEDON CIVIC THEATRE TRUST, comments: In the current economic climate, all charities are finding it harder to raise funds as people are increasingly becoming reluctant to donate their time or money. Being a small scale local charity has additional challenges as we have very little exposure to influential financiers and larger "giving" organisations.
Wimbledon Civic Theatre Trust helps young people in the Merton area to gain new skills and reaches some of the most disadvantaged in the area, including those with behavioural difficulties, physical problems and from low socio-economic backgrounds. We rely on the donations of individuals and organisations to fund our work. By having the right set of trustees on board who can contribute funding, skills and time, charities are able to keep overheads low.
By reducing administrative costs and recruiting volunteers who are passionate about their voluntary work, costs are kept down and more of the money raised can be channelled directly into helping the young people. We try to research high net worth individuals, organisations or trusts established in the local community and approach them with specific propositions.
Thanking and rewarding donors is very important to us, and can be invaluable in letting donors know how much they are appreciated, which will make them more likely to continue donating. We have two carefully targeted and planned high profile local fund and awareness raising events each year.
One issue we face is insufficient name recognition in the local area as for historical reasons our name doesn't reflect our goals accurately, but we are now working with a PR agency to rectify this with the dual aims of recruiting donors and attendees. One way we believe we can continue to grow is by embracing social media and using it to reach our participants, our audience and potential investors.
We find it important to plan 18 months ahead and outline three years in advance to get an idea of fundraising targets, to ensure resources aren't over committed and to accommodate lead times of schools. By planning thoroughly and quantifying objectives of our projects, our investors can see where we are spending their money, see the quantified outputs and outcomes, feel more involved in the process, and can track development. In the eight years since WCTT started, the trust has grown from helping 100 young people, to helping over 2,500 each year. We have also increased our regular donors from ten in the first year to over 200 now.
Having and meeting budget forecasts
FAIZA SETH, founder and director of SOHAM FOR KIDS, comments: Senior management of charities can be proactive in driving charities forward by having budget forecasts for the next five years on file, and corresponding fundraising plans/targets in place to meet these budgets. This is the first and most important forecast which needs to be calculated and adjusted to ensure that a charity has sufficient funds to continue functioning efficiently.
At Soham for Kids, we have a one year budget which is divided monthly and is compared to the actual money spent each month, so the future budget for years 2-5 can be adjusted appropriately to ensure we have sufficient funds to keep our school in Hyderabad, India running smoothly.
Also to ensure that funds are used for the charity only, I conduct quarterly audits of the financial and cross check expenses with receipts to make sure that the money is only allocated to the school. Many charities based in other countries such as India are difficult to monitor financially, however quarterly audits ensure that the funds are being allocated correctly.
Our fundraising is achieved through corporate donations, personal donations, friends/family donations, as well as through grants. I also use Google Adwords to increase awareness of the charity which both attracts potential donors as well as volunteers. Google Adwords supports charities and gives free Adwords to increase awareness of registered and approved charities. Having multiple strategies and sources for donations ensures that not all your eggs are in one basket and you have secured many donors to financially support the charity.
Last but not least, it's very important to have long term plans to make a charity self- sufficient. In our case there has been a demand from people to send their children to school and pay for this because of the high quality of education offered at the school. But, right now, it is a non-profit charity school that educates, provides nutrition, and healthcare for underprivileged and orphaned children only. However, establishing a for-profit sister school in the future that will fund the current Soham for Kids school will be a great way to make us self-sufficient and less dependent on fundraising from donors.