Looking Ahead & To Build Your Resilience - Updated 28 March

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The apocryphal Chinese saying ‘May you live in interesting times’, whilst seemingly a blessing is a curse. And we certainly live in interesting times. The coronavirus may be the most immediate, but is not the only strategic risk we face, and recession now seems increasingly likely.

This toolkit enables you to look ahead and assess the situation, with a whole range of ideas you can use to begin building your resilience.

Charity Excellence Coronavirus Support

The Charity Excellence Framework (CEF) platform has been updated to include Coronavirus assessments and all toolkits. Everything is free. Watch this short video to see how it does that. There are fundraising guides, funder lists and free funding finders on the Charity Excellence fundraising page.

Responding To The Crisis

• Toolkit 1 - creating your organisational response plan. Last update 23 March.
• Toolkit 5 - carrying out a financial assessment and creating your action plan.
• Emergency Funders List - 100+ funders. Updated daily. There are 20+ other funder lists on the system, plus links to 100 free funding finders.

Beginning To Plan Ahead

• Toolkit 6 - building resilience & creating a fundraising recovery plan.
• Toolkit 7 - assessing financial resilience. Co-produced with Moore Kingston Smith.

If you want the Charity Excellence daily coronavirus updates, connect with me on LinkedIn. Or follow me on Twitter, or Face Book.

Using This Toolkit

The CEF Charity Sector Data Store now holds 300,000 scored assessment statements and this has been used to help answer 3 key questions.

1. What are the challenges we face? 
2. How well are we placed to respond. 
3. What could we do to build sustainability?

Let’s talk about interesting times

I’d argue that strategy isn't what you want to do, but rather about how you respond to what the outside world is going to do to you. The first part of this resource looks at the external risks facing us.

The Immediate Term

Even before the crisis, demand for services was increasing and some 20% of charities struggling financially. Nobody really knows, but based on what we’ve seen in China and Italy, the lockdown may last a month and the worst of the epidemic 3.  

NPC have produced a very helpful assessment of the impact. In this, they identify the charity sectors most likely to be worst hit, including the elderly, the young and the vulnerable. It also assesses the potential impact on income:

• Events – the London Marathon alone earned ￡66m last year.
• Individual Giving – fell by 11% after the 2008 crash.
• Earned Income – it’s estimated that we could lose ￡1.36 billion, that’s 3% of income, if trading is suspended for just 3 months. 
• Contracts – account for 40% of charity income, creating not only income, but also cash flow problems.

It’s been estimated that UK charities will lose ￡4.3bn of income over the coming 12 weeks, with shops closed, events and activity cancelled, reserves depleted, and demand for services increasing. Many also face increased costs in tackling the outbreak. However, that’s probably a worst case scenario and there will be a response from Governmant and funders, which makes it very unlikely. Nonetheless, it shows the huge scale of the impact.  

The importance of digital is increasing each year and that is likely to become more critical, in the immediate term. Social media is either cheap or free and, often, very easy to use. But, many of us are not yet exploiting digital nearly as effectively as we could do. Greater use of virtual events, online shops and online fundraising offer a way forward. If you've never really used it social media, here's some guidance, and other resources.

More widely, this month saw the worst fall in share indexes since 1987 and the OECD has said that a longer lasting and more intensive outbreak could halve its global growth forecast for this year to 1.5%. 

And Longer Term?

The UK experiences a recession about every 10 years and the last was in 2008. Even if the Coronavirus doesn’t trigger a recession, there's still Brexit, global trade disputes and the growing impact of climate change. It’s not if, but how soon and we’re less resilient than we were then. When it comes, all income streams, except probably retail, should be expected to fall.    

The 11 March budget was the largest since the Tony Blair years and that was before the ￡350 billion additional spend was announced. Somebody will have to pay for that.

Then there's the DfID ￡14 billion funding, which the Government already wanted to ‘realign’ and the potential Brexit risk around the substantial EU grant funding. Any major cuts in those, would impact international, education and research charities and, potentially, increase funding competition for everyone. An additional possible risk to the sector.  

Think about the potential global, UK, regional, or even local external factors relevant to your charity to identify the key factors for you. These are the external threats and opportunities in your Strengths, Weaknesses, Opportunities and Threats analysis – SWOT. 

And it’s not all bad news

Here’s the UK charity sector 1 March 2020. The dials display Overall performance in the middle, governance on the right and individual priorities for action on the left. The 3 tables analyse these in more detail. On the left, the Stakeholder Assurance table is for complex issues such as maximising impact, Core Functions is functional activities such as strategy and Governance the various aspects of the Governance Code.

Before the crisis, the dials were green, and only 5 of the other indicators were amber. Amber means that the majority of charities report they are not performing well in these areas. Given the pressure the sector was under even then, that’s surprisingly good.   

However, 3 of the 5 are of particular concern

Strategy. More than half of the 38 indicators are amber. Too many charities are not responding to, or some may even be unaware of, the wider strategic risks. A recent report found that charity CEO’s considered strategy to be less important than previously.

Secondly, the sustainability metric is amber, as is income generation. It’ll come as no surprise that the lowest scoring income indicator is a lack of a funding. However, there are a substantial number relating to our effectiveness in generating income.  

Thirdly, the system reports charities' assessment of their ability to deliver what they plan to do. There are weaknesses in planning and a lack of capacity and skills in all functional areas. We’re committing scarce resources to plans and targets that are unrealistic. We may be setting ourselves up to fail.

What does that all mean for the sustainability of the sector?

1.    Even before the virus, we faced major challenges.

2.    Yet at the same time, we may also have been over-committing our limited resources.

3.    There are also substantial additional strategic risks and;

4.    Too many are too hard pressed to identify and respond to these.

That’s a toxic cocktail of risk.  The only way to respond effectively, in a sector already hard pressed and very short on resources, is to get more out of the limited resources we do have.      

It’s a huge challenge, but I believe we can     

The sector is driven by passion, but it’s also widely accepted that we are often not well run and that’s a weakness we can turn into an opportunity. For pro bono consultancy, or to get a mentor, contact WCoMC or the Cranfield Trust. 

Yes, the system does identify that the single biggest concern is our lack of resources, but many more amber indicators relate to how well we use the resources we do have and we can do something about that.  Based on the data, there are the 6 amin areas of opportunity.  

Be strategic

The known risks aside, the virus will fundamentally change the world in ways we don’t yet know. Perhaps, home working will become the norm for many, less reliance on expensive offices, new ways to collaborate and run charities. For fundraising, maybe changes in which causes are most popular and in the way donors give and work with charities. There will be opportunities for those who look for them. Strategy is more important than ever.

Ensure your planning is robust

Ambition is another admirable hallmark of the sector, but when it comes to committing very scarce resources, be hard-headed in your planning. 

Be prepared to make unpopular, but impact driven decisions - the weakest governance indicator is board effectiveness in delivering its organisational purpose. Our passion is a huge asset, but it’s not about delivering services that we’re passionate about, but having clarity on the unmet need and structuring what we do to best meet this. Change is always very difficult, but our world is changing rapidly and fundamentally, and we need to change in response to that.          

Be prepared to make unpopular, but impact driven decisions

The weakest governance indicator is board effectiveness in delivering its organisational purpose. Our passion is a huge asset, but it’s not about delivering services that we’re passionate about, but having clarity on the unmet need and structuring what we do to best meet this. Change is always very difficult, but our world is changing rapidly and fundamentally, and we need to change in response to that.  

Manage cost to drive impact and value for money (VFM)

Cost cutting can be a race to the bottom and often is, but it doesn’t have to be. For example, each year we fail to claim ￡600m in Gift Aid and that's only one tax relief. There are different types of Gift Aid, lots of other tax reliefs and you can claim up to 4 years retrospectively. The biggest refund I ever found was ￡0.25m.

It’s almost always quicker and easier to manage cost, than generate new income. And grants are usually a one-off, but even small savings accumulate and pay you back every month forever. Are you overpaying for things, or paying for services you don’t need, or could get for free, are you using your resources efficiently. Scale back high cost/low value activities and always assess the cost and impact of any project. It will pay you back in spades.   

Here's a CEF resource of 30 ideas on how to reduce cost to increase impact.

Income generation isn't just about more bids

I know that funding’s really tight, but even before the crisis, too many of us were focussed on getting out as many bids as possible. That's just one part of the income generation process. 

Often, the biggest opportunities are in areas that have been neglected. Is everyone engaged in supporting income generation. For example, do the above well and your bids will be more creative, and deliver greater impact and VFM, so be more likely to succeed. Do you know what the return on investment is for your various income streams is – could any be improved and are there any where the time end effort would be better invested in another way? Do you have the reporting, systems, data and procedures needed to make that work well?

Emergency Funding. Here is the CEF master list of 80+ funders who have made emergency funding available to charities and other non-profit groups.

Online Fundraising - all 9 of the CEF digital fundraising indicators are amber. That makes it an opportunity, particularly as coronavirus impacts more traditional fundraising. It's estimated that charities lost out on ￡1.5bn in donations in 2017 due to lack of digital effectiveness and Fifty percent of charities don’t have a digital strategy. That needs to change.

The CEF Digital Fundraising Insight Report will give you a checklist of possible opportunities. If you're new to this, here's how to get started. Consider setting up an online shop - here's how to set up a charity E Bay shop. Here's the CEF list of 70+ fundraising platforms, with links to 5 under Auction/Sell. Think about virtual events. Consider text donations - here are the best text donation services. Or contactless. 

Exploit Digital

Why It Matters - - the vast majority of people, including the vulnerable and old, are now online, and it can be very low-cost and reaches many more people. 41% of over-75s have a social media profile. Think you're too small or need to convince your board - here's an article I wrote on that.

How To Do It. Simply making lots of posts takes time and isn't particularly effective. Instead, be clear on what your communications objectives are, who your audience is, the best platforms to reach them and the messages you need to send to get them to respond in the way you want them to. The Data Store metrics show that many charities aren't doing this effectively. Need some help with that? Digital Candle – free 1 hr phone call with a digital expert. 

Resources - here's advice and resources on using digital to get you started and you can find lots more coronavirus articles on Charity Digital coronavirus website page. There's lots of free online training, including Google's Digital Garage, the Hub Spot Academy and Accenture. Check the coronavirus tech handbook for a huge range of tools.

And here are some more links from the CEF resource base. Digital Maturity Frameworks Overview – 57 digital tools, sortable by category etc.  Alidade – interactive tool to help you find the right technology tools.  Superhighways – digital support and resources for small organisations.  

Websites. This Charity Excellence Insight Briefing on sector website effectiveness has all 6 indicators at amber. Reviewing your website could be an easy win for you. If you're a member of the CEF community, run 'website' in the query system and it'll give you an assessment of your website and links to the resources you need.

Google. If your charity has national reach, the ￡90k Google Ads grant is an absolute gift. It's not a quick fix, but I've done it, so it's not rocket science. Plus when you register with Google Non Profits, you'll get access to G Suite - cloud programmes for office administration, including Gmail, Google Documents and lots more, including premium access to You Tube. 

Charities cannot do this alone

There’s actually a huge amount of guidance available, but it’s often duplicated by competing organisations, or hidden behind paywalls, or hard to find, many can’t. Sector bodies need to collaborate far more to collectively exploit data, to inform policy making, coordinate resource production and make charities more aware of the issues and guidance available to help them. 

And we face endless criticism from the Media and Charity Commission but, at our best, we’re more than a match for the private sector. We need to make that case more often too. 

In Summary

We face substantial external risk, which we cannot control, but we can respond to it, both individually and as a sector. In a sector hard pressed with scarce funding, the only realistic way to do so, is to do more with what we’ve got. 

That is not a counsel of despair, but a call to action. We have huge passion and people with boundless talent. We need to enable them to turn our inefficiency into an opportunity. The key opportunity areas are strategy, planning, impact, cost, income and digital. 

As in any time of change, there will be winners and losers. Which your charity will be, depends on what you do about it. Whatever you do, don’t do nothing.

Need More?

The Civil Society section of the Coronavirus Tech Handbook has lots of links to resources.

Can you help?

The CEF works on a community collaboration basis. Can you help me help others by adding to this resource? If so, e mail me at [email protected]. All contributions will be credited.

Thanks to New Philanthropy Capital (NPC) for their report, whiuch has made this resource more useful to evertone.

This resource has been produced by the Charity Excellence Framework for everyone. It may be used or shared, but not for commercial purposes. I am happy for my work to be reproduced by others, with my prior written permission and appropriate recognition for the Charity Excellence Framework.