Almost one in five UK charities are struggling to survive in the face of financial pressures and growing demand for their services, rising to over one quarter of smaller charities. Around one third have had to reduce staff numbers, or are set to do so.
These figures, from a recent survey of charity chief executives*, show that business as usual is no longer an option for many charities. The old ways of doing things may not be the best response to the financial and management demands of 2018.
For trustees looking for innovative ways to take a charity forward, there are various options available.
Learn from the private sector
In social care, and also other sectors, charities may be unaccustomed to using commercial approaches when negotiating contracts with councils or NHS trusts. But getting to grips with mechanisms such as adding warranties or indemnities in contracts – both common in the commercial world – could provide more financial security.
Ride the social enterprise wave
Scotland is home to over 5,000 social enterprises, and they make money for good causes through an astonishing range of activities – from making gin to running community halls.
Charity trustees could well borrow some ideas from the sector – perhaps raising more finance from trading, or adopting their go-getting approaches to communications and marketing.
There may also be opportunities to join forces with social enterprises to provide services.
Looking at partnerships or mergers
Trustees are often reluctant to merge with other charities, fearing a loss of control or identity, or provoking technical and legal issues around legacies, pension liabilities or redundancies. On the other hand, funders (especially the Scottish Government, the NHS and local authorities) are increasingly keen on charities jointly working together in partnership.
A merger or joint working arrangement can often be the best way to support service users, and use resources efficiently. Technical, legal, governance and identity issues can generally be resolved or avoided with good advice.
Charities often view such changes as a solution of last resort, but trustees should learn to be more proactive. Change could well be the way to ensure long-term continuity.
*Source: Charities Aid Foundation, Social Landscape Report 2017
