In the spirit of making New Year's resolutions? Here are a few productive ideas from Charity Bank's business development director, Peter Kelly.
As we ease into 2016, there’s no better time to take stock and learn from last year’s achievements. For trustees, managers and finance directors looking for a productive break from a cluttered email inbox, here are 11 top tips, spanning finance, governance and marketing, inspired by our charitable borrowers and other organisations that achieved great things in 2015.
1. Good governance is critical to building a resilient charity – is your board fit for purpose?
A well-chosen board with skills that match your activities and future plans will really help when it comes to making good decisions this year. A skills audit is a useful way to make sure the board is capable of steering an organisation down the best course. Organisations that are willing to identify skills gaps and recruit additional trustees as appropriate often find they are able to pivot when times get tough and improve their plans for sustainability. Welsh theatre Sherman Cymru is an example of a great organisation, which is seeking to diversify its trustees to help it reach sustainability, recruiting people with skills in commercial trading and income generation.
2. Always look out for pro bono support
Free support can be a great help along the path to sustainability, so it’s always worth making enquiries. Unit3Sixty, a social enterprise skate park, which has had a successful year, helping to reduce crime in its local area, negotiated a range of pro bono support including a free advertising window from a major national retailer and a free kitchen from a local business. The police force also supplies the skate park with bikes and scooters, recovered after theft.
3. The importance of a finance director
One tried and tested way of turning a charity from a fledgling organisation into an early maturity organisation is putting a finance director and the right finance systems and processes in place. Without these not only are the operations of the entire organisation unstable, chances of attracting funding are reduced. Whenever we consider a loan application we make sure that the organisation has a good financial management system in place, as this is something we see as vital to our borrowers success.
4. Make sure your content is effective
Your content and the way in which you articulate your values and services are critical to attracting donors, volunteers, funders and service-users. How clear, friendly and helpful is the copy on your website? How compelling are your funding and award applications? How successful are your tweets? Professional writing support is one option but it can be expensive, so you might consider recruiting an intern or volunteer to work on creating brilliant content for your organisation. For examples of clear, compelling, punchy copy in the charity sector take a look at former Charity Bank borrower War Child. WWF and charity:water are also great examples.
5. Why rent when you can buy?
Many of Charity Bank’s borrowers have decided to buy the property they use to deliver their services, taking out a loan to do so. First Stop Darlington, a first stop for people facing homelessness, used a loan from Charity Bank to buy its offices and is now saving around £10,000 a year that it would have been spending on rent and other operating costs.
6. Property acquisition can build resilience and fuel growth
For some charities acquiring property has been critical to helping them grow. One example is TLG, The Education Centre. Once a community group, TLG is now a national education charity. By buying property, it was able to use its buildings to obtain secured loans that were key to its growth. It has also been able to sell property in order to develop new sites and facilities, which have since enabled it to generate revenue.
7. Time to develop your own source of income?
If you’re looking to generate revenue it pays to look at successful examples. Emmaus Village Carlton is one of them. With a café and bric-a-brac store, a range of second-hand books on sale, an emporium stocking vintage treasures and great quality second-hand furniture it is able to both generate revenue and employ people who were previously homeless.
8. Have you stress-tested your financial plans?
Having seen diverse business plans for organisations across sectors, here is an idea of the sort of questions successful financial planners can answer:
- Can I show why the organisation’s plans are viable?
- How detailed is my knowledge of how the plans will be implemented – are there any gaps?
- What are the hidden barriers to implementation?
- How will we overcome those barriers?
- Do we have the skills as an organisation needed to deliver and overcome challenges?
- Is the organisation’s team learning continuously about best practice and drawing on the experience of others?
- Are the assumptions we have made soundly based on evidence and on past experience (whether our own or those of others)?
- Do we have actions for best, difficult and worst-case scenarios?
9. A loan can help to bring in one grant or several
If you’re considering a loan for your organisation it helps to know that loans can work to attract grant finance. One of Charity Bank’s borrowers, Towcester Museum, received a £50,000 grant from Heritage Lottery Fund alongside other smaller grants as a direct result of its loan. Thanks to a combination of loan finance and grants, a local group, who had spent 15 years campaigning to establish the museum, are now able to tell the story of one of the oldest continuously occupied settlements in Britain.
10. Loans could help you accelerate your project
When a project demands finance, grants can take a while to organise, and are sometimes paid at the end of a project – rather than at the beginning, when you often need them. Lenders can’t give you instant finance, but if the circumstances are right, a loan can be arranged within weeks. A quick and efficient deal enabled YMCA Birmingham to build a block of 34 apartments in 2015, with training rooms and community facilities, for 16 to 25 year olds.
11. Reaching the stage where loan finance and investment is an option
If you are considering social investment or a loan, but your organisation is too early stage, you might want to consider the Big Potential programme. The Big Potential Breakthrough programme is an opportunity for charities and social enterprises to access support and grant funding to help them reach a position where they could use repayable finance.