How charities can survive rocky times

In the midst of economic recession, high inflation and the cost of living crisis- what does this mean for charities- and how can you protect your charity from the worst of the impacts?

In the last recession, I was responsible for leading a project saving charities from the brink of collapse following significant public sector cuts, and an economic recession. The lessons I learned still ring true in our current circumstances, and have become a critical part of my economic survival toolkit for charities.

Which charities survive a recession?

A good start to which charities survive is to take a look at whose the best charities in our localities, on certain causes, or in global context. Ultimately, there will always be funding around delegated to causes, so it will always be the charities who are best at what they do that survive the best- this is because when there is diminishing resources, there is not no resources, there is just less. So what is given out goes to the very best charities to prioritise their survival- why would you bother to save a charity that is not very good at what it does? Here we need to think about 'best in class' so if you're an international charity, you need to compare yourself to other NGO's working in the countries you operate. If you are a local cancer charity, you need to be able to pitch up against other cancer charities.

What to do... Practical steps to take...

Increase your spend on fundraising, even if it means cutting back on operational costs- the pound for pound return will give you money to survive and thrive- but if you cut back on fundraising your income sources will dry up. Two charities I know bounced back from bankruptcy by keeping just their CEO and fundraiser at one point and making all operational staff redundant, within a year they had built back and both are sustained and in fact grew back stronger for having made the investment in fundraising.

De risk your portfolio early and shut down services that are not performing- you need to focus on what you are good at, and can succeed at- as opposed to delivering services that are costing lots and delivering low impact. Look at your portfolio of services and really look at whether they are making a difference- if they are not, perhaps its time for some brave decisions. There is no time for wasting money on services that cannot deliver. You don't want one poor service in your charity to let down the whole side and stop you getting funded.

Diversify your income but be clear on timeframes- diversifying your income is a good thing, but be clear that many new income streams like individual giving, major donor development programmes and even trust and foundations programmes if you set out for the first time can take time, around 12 months to three years to return on investment. Alot depends on your organisational readiness for investment.

Get clear on your impact- having a clear demonstrable impact on your cause is impactful in helping you compete for funding, and this needs to move beyond routine activity counting- how many people you help and how- for example, to impact made, for example how you tranformed their lives.

Get your house in order-to be competitive in a downturn, you not only need excellent communications- but also excellent governance, leadership, operations, delivery, staff and volunteers. It will not be enough to be adequate. Remember your funders will be making difficult choices- like which charity they close by not donating to- you're going to have to make it really compelling to save your skin. Not only do you want to look effective, you want to be extraordinary. Extraordinary as a charity- always gets saved and funded. Mediocre. Not as much.

Thanks for reading folks- I am Anna Day, charity geek and Head of Development and Communications at Citizens Advice Bucks and I coach Chief Executives of small charities in my spare time- having worked as a CEO for a decade prior to my current role. You can subscribe to my article channel for interesting blogs about charities.