The Future Charity – What does it look like?
Heather is a regular guest blogger on Third Sector, here’s an extract from her recent blog.
At the Charity Finance Group Large Charities Conference today, the question posed was ‘Are Charities becoming irrelevant?’
Heather Black, Managing Director of Economic Change, challenged this question:
“It’s not about irrelevance, but perspective. Charities need to evolve and confront current challenges to become modern, and forward-facing – well equipped for the future”.
The traditional charity model typically relies on grants or donations, and often takes the position that all money should be invested in providing free services. There is also a perception that charities can be operationally inefficient and unsustainable.
Some Charity CEOs are confronting the following challenges:
- A reluctance from Trustees to adopt commercial trading activities, but to remain a voluntary led organisation which is reliant on grants or donations.
- Public nervousness about how much of their donation is actually spent on delivery as opposed to core costs.
- A government desire to contract with large corporate primes in their belief that they are more efficient and cost effective, but encourage a supply chain of third sector organisations who should be supported with capacity building activities.
To survive and remain relevant in today’s climate, charities are now having to address four major challenges, and to take stock with some of following solutions.
Challenge 1 – Lack of transparency & trust
The future charity will ensure they have a 2-way communication strategy, and tools in place to converse with all stakeholders to share information, listen to feedback, provide updates, and communicate impact. This will build transparent and trusting relationships.
Challenge 2 – Amount of funding being spent on core costs rather than delivery
The future charity will need to review and adopt lean processes and improve their efficiency through improving IT and Digital Infrastructure to reduce administration costs.
It will also look at ways to increase their unrestricted funding to cover core operational costs by introducing commercial trading arms, and adopting a social enterprise model.
Challenge 3 – Financial investment for diversification
The future charity will need to explore alternative commercial, community or social investment options to invest in delivery of services, commercial trading activities or resources that enable them to achieve sustainability, beyond standard donations and grants.
Challenge 4 – Maintaining a Competitive edge
The future charity needs to compete against mainstream businesses and other non-profits within its sector. It needs to recruit a good blend of charitable and business skills on the board and team, embracing commercial and digital marketing angles. It needs to shout about its distinctive impact and wider social responsibility as part of a cause related marketing strategy, to stand out in the crowd.
Barnados have recently outlined their strategy for future growth for the future – it makes very interesting reading.
Economic Change CIC helps charities to review their business strategy, processes and implement IT cloud based CRM operations using Salesforce, to help them become more efficient and sustainable in the long term. Contact us to find out more.