Tough choices in charity leadership

At the end of another interim CEO role with a wonderful charity, I have again met some inspiring and dedicated people, learnt about a new sector (in this case supporting older people, tackling agism and creating age-friendly communities), and I hope added value along the way.

Over the last few years with a number of Interim management assignments alongside my consultancy and non-exec work, I’ve been fortunate to work closely with a wide range of charities and have been reflecting on some of the common issues many seem to be grappling with.?

Funding is of course the obvious place to start, and in many ways ’twas ever thus.? But for many it’s tougher than ever as finances are being squeezed in all directions.? I sat with a group of CEO’s recently and every one had a deficit and unsustainable budget.? Inflation and the cost of living has seen costs rise significantly on all fronts, and charities rightly don’t want their workforce to fall behind others in salary levels - though I fear they are.?? In recent years, in a bid to find more diverse and sustainable funding streams, as well as improve services and outcomes, many have taken on the provision of more public services.? But now those budgets are being squeezed, certainly not keeping up with inflation, with many seeing service and budget cuts.? Trying to work in partnership with some public bodies – many of which have their own significant challenges – feels increasingly challenging.? Meanwhile grant funding seems to be becoming more and more competitive, with reducing ROI in terms of time invested.? Public fundraising is also becoming a very busy marketplace, and while I see incredible success from events like the London Marathon, and I know how generous the public are, even in a cost-of-living crisis, I also see increased competition and confusion and fear we might collectively damage the goose at some point.? Its essential to engage effectively with donors and continually strengthen their emotional connection, including by helping them see the difference they are helping make (see impact below).

?This results in many I see grappling with incredibly difficult choices - paying enough to retain staff, ensure their wellbeing, maintain service standards and keep services going (which may have become central to their reason for being), or cutting costs accordingly, maybe stopping much needed service provision (always difficult to do), with fears of initiating a course of decline.? Sadly, many will have to shrink for a while, and maybe grow again in future.? Ive been working with several to help rethink their business model, prioritise funding sources and create new sustainable revenue streams.

There are wider implications to these financial decisions.?? The classic danger of being driven by funding opportunities and funders need rather than sticking with core purpose.? Boards have a key role here in helping with tough decisions, ensuring clarity of purpose (which may need revisiting), and ensuring alignment with their ‘North Star’.? There is often a need to refocus on core areas rather than trying to do too much, identifying market needs which align with the organisation’s strengths and USP.? Critically, while needs are growing, I have seen a tension between supporting those who can make a service sustainable versus staying focussed on those most in need. There is a risk of widening inequalities we are seeking to address.

Within these considerations is the effective use of volunteers - which can help keep costs down and increase reach and scale, but can lead to expecting too much.? Finding the sweet spot where paid staff are used effectively alongside the recruitment, deployment, engagement, support and valuing of volunteers creates a win-win for the volunteers, the beneficiaries and organisation, is key and can be rewarding for all, but its not always easy to achieve.

?Another common challenge is whether to focus on service or programme delivery, or wider systemic change, influencing policy change, research, evidence and advocacy to impact the lives of more of people upstream.? Many want to do the latter, but the business model and immediate needs of the business requires a focus on the former, and the transition can be challenging.? I believe there is often an opportunity for these to become complementary rather than competing strategies, if they are done differently with the right intentionality behind the work.

Most are also grappling with the effective use of digital, data and systems, when often they don’t have the resource or expertise they need.??? Although often the challenge is not so much the technology, but the strategy and culture that underpins it. Digital transformation is now the norm and ongoing, but needs to be resourced appropriately and implemented carefully.

This often links with the common challenge across the sector of being better able to understand, focus on, measure, demonstrate and maximise impact.?? The work of Trust Impact is really making a difference here and id encourage anyone to take a look at their work across the wider social impact sector. Being truly impact-driven in the context being described in this article is challenging, but massively rewarding when achieved.

The other thing I notice is the increasing demands on boards and particularly volunteer chairs, especially when dealing with challenging times, strategic issues and change.? It can sometimes feel like they have a full time job on their hands.? It is critical for the board in these times to be focussed on the right things, to find the balance between a focus on governance and fiduciary responsibilities vs time spent setting strategy and direction?- and understanding the business well enough without becoming operationally involved.

Most of the above comes down to leading and managing change and while there are often no easy answers, it can be helpful knowing others are in the same boat. There is a tendency in some organisations to be quite inwardly focussed in trying to find answers but I see many opportunities and indeed a need for organisations to collaborate more, facilitate peer learning and to share expertise and resources with others.

I’d be interested to hear your views, do these challenges resonate and how are people responding to them?

If you think I may be able to help an organisation you’re connected to, please reach out.

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