1. Institute of Fundraising Workshop BUSINESS PLANNINGThe Cranfield Trust – Alice Dabrowska Operations Manager Cranfield Trust Volunteer- Collete Williams
2. Why do I need to Plan?NOW?!
3. NOW?A recent House of Lords discussion of the Small Charitable Donations Bill,Baroness Hayter of Kentish Town quoted CAFs research, which found one in sixcharities could be threatened with closure and up to 40% were worried theywould have to close if the economic situation failed to improve.The UK has fallen from fifth to eighth in the World Giving Index, CAFs thirdannual report on giving across 164 countries, which surveys the amount peoplehave donated to charity, whether they have volunteered their time and whetherthey have helped a stranger.UK Giving 2012, Britains biggest annual survey of charitable giving, also publishedby CAF showed that giving dropped by an "unprecedented" 20% in 2011-12 –representing some £1.7bn in charitable income. The amount rises to £2.3bn whenadjusted for inflation, CAF says.
4. NOW?Large gap in information between what councils are doing to administer personalbudgets and how charities should prepare for them….two massive challenges atthe same time: cuts to charity budgets as well as service users being told they areineligible to receive a personal budget at all.Payment by Results - how will cashflows and contracts operate? Organisationsneed good business and negotiation skills to avoid suicidal contracts. Current lackof clarity and confidence. Threat of massive liquidity strain for those charitiesaffected as they provide services where delayed payments form part of the contract.The voluntary sector’s enhanced role in delivering public services through L.A.commissioning offers many opportunities but also comes with associated risks.Funding shortfalls and increased demand is threatening the sectors capacity tosuccessfully deliver services. The government is opening up new channels forfunding, infrastructure and resources to allow voluntary organisations to becomemore responsive and decrease the risk of service failure.
5. Why bother with Business Planning?•To understand the charity as a business and to view the organisation from a freshperspective•Raises awareness of internal and external influences•A chance to identify gaps, resource needs, knowledge and skills•Builds and improves teamwork through participation•Provides a means of communication inside the organisation with both internal andexternal stakeholders.•Effective in presenting charity to funders and boards.•Guides the operations; sets targets and allows measurement of successes andachievements as well as highlighting areas for improvement.•Revitalises and motivates staff, boosts moreale, “we know why we are here”,aligns personal objectives
6. Where do we want to be? Analysis is necessary to identify the principal success factors for your organisation moving forward. But if these facts cant be easily explained to stakeholders and/or stakeholders cant see the need or urgency for change, the plan will inevitably fail through lack of buy-in.If, however, the essence of the plan - including the principal reasons why thestakeholders MUST change is identified and wrapped in a compelling narrative,engagement and therefore action is more likely to follow. The right narrative facilitates strategic change by making change welcome, achievable and personally relevant.
7. Case StudyHampton TrustBusiness Plan, Salary & StructureReview and Advice on PensionSchemes In 2008 they requested help from The Cranfield Trust in order to produce a Business Plan for the purpose of a Capital Asset in which to invest a lump sum. This was deemed to be a huge success by the charity, with Kim Brown, the Chief Executive commenting that: “The volunteer had a massive impact. We have recently received a £1m grant based on the vision the volunteer helped us formulate. (He) is now one of our Trustees which we are delighted with... Thank you so much - we have had such an amazing outcome from our involvement with Cranfield Trust."
8. Develop the vision…where we want to be in x months time Agree the values…how we want to work together and the image we want to portray Business plansWhere we Where we Performance are now Management Finance want to be Strategy Marketing Human Resources IT Change Formulating the Plan and Periodically Reviewing
9. What do we mean by Business Planning?Setting the goals, deciding and defining where the organisations needs and wantsto goA plan is of no use unless it is followedThe high level thinking must be translated into something tangible – things to bedone, actions, the planThe plan is a roadmap. Take time to look at where you are and compare andcontrast your current position with what you had planned. Are you adrift? Thenchange events, alter plan to reflect reality, get back on track.The plan is a living document it is NOT a documents, created at great expense,that simply gathers dust.
10. Case StudyCommunity Service Volunteers ScotlandStrategic PlanCommunity Service Volunteers (CSV) is the UK’s leading volunteerand training organisation, with 200,000 volunteers and 20,000 traineesinvolved in programmes across the UK each year. It is aregistered charity and has an almost 50 year history of social action,with a wealth of experience in creating opportunities for people to worktogether to have a positive impact on the community. “The strategic planning project, resulted in the Scottish part of the organisation forming a more cohesive bond, gaining insight and clarity as to the strategic issues we face, the options for responding to those and planning well for the future. In particular, and unexpectedly, it resulted in us presenting a positive, coherent and well thought out strategy for Scotland to our newly appointed CEO, in her early days in the organisation. Since then, keeping a focus on Scotland, within the context of a UK organisation, has been made both easier and more effective.”
11. We have a strategy, why do we needa business plan?If you are failing to plan, you are planning to fail. Tariq Siddique
12. Cash Flow Summary Year 1 Month 1 Month 2Capital Forecast Actual Forecast Actual Investment Capital Set-up costs Expansion TotalIncomeRestricted Funding Grants We have a budget,Unrestricted Funding Grants what’s the use of a Sales Donations cash flow? TotalExpenditureOpening Costs Promotions BUDGET Marketing Staff Detailed list of all planned Materials, stock expenses and revenues Workspace Services produced on an annual Insurance basis. Transport ExpensesTax PAYE, NI CASHFLOWFinancing Loan interest Rolling record of actual and Loan repayment Total planned movement of cashCash Position Income expenditure in and out of the venture – Bank opening balance Bank closing balance liquidity. A continuous Reserves check on the use and Contingency Total availability of resources.
13. Recruiting and retaining goodTrustees…The first step for all trustees is to obtain clear and reliable financialinformation, along with realistic and regular cash flow forecasts.In a time of financial difficulties this information will indicate whetherthere is scope to renegotiate the timing of grant receipts – allowingtrustees to explore other sources of income or to contact the CharityCommission for permission to use restricted funds for generalpurposes. financial sustainability is the key to survival as well as growth
14. How do we define what value weadd?Corporate World = maximising shareholder valueCharitable Organisations = identifiable public benefitCan we define what the need is that we are endeavoring to support byour intervention?If we can, then what is the value of the work we are doing and how canwe package and communicate what we are doing or are planning to doin a way that people can understand?
15. NOW?Be preparedOrganisations that have survived major funding cuts are those which haveanticipated the problem in advance. They ‘ve been able to make decisions andput their contingency plan in operation, whether that is cutting back provisionand overheads or supplying alternative services.Be realisticEnsure your back-up plan is practical and workable. The use of an independentthird party to review assumptions can incur short-term cost but avoids biggerproblems.Understand your financesRobust financial information and strong budgeting processes are key to avoidinginsolvency. Understand the cost and benefit of your services. Matt Dunham is an advisory partner with Grant Thornton
16. NOW?Look for service efficienciesDont make the simple mistake of cutting services if you could instead have madethem more efficient. Mergers and shared services offer major potential forefficiencies and will prove the solution for many organisations.Develop the right mindsetCharities need to be commercially aware as do the individuals within them. Havingstaff who are flexible and understand the economic realities while maintaining acaring approach can make all the difference to success or failure.Strong leadershipThese leaders have a clear vision, can communicate that to staff and achieve aconsensus. They are compassionate but aware of the commercial environment,they understand the need to generate surpluses to be sustainable, but happy to dipinto them on occasion to invest in the future to improve services. Matt Dunham is an advisory partner with Grant Thornton
17. Case StudyUnited Churches Healing MinistryBusiness Plan“…..business plan; to review the strengths and weaknesses of theorganisation and to agree goals and objectives for the next 5 years.This was a searching process and I appreciate the skills and empathy Dougbrought to the project, his genuineness and firmness regarding necessarychange along with his time commitment. His willingness to meet with staff andtrustees enabled him to gain an accurate picture of the organisation as a wholealong with the challenges we will possibly face in the future. I am confidentthat this special time will have safeguarded the future development of UCHMwhile enabling the business plan to be used in generating much need funds forthe establishing of our ongoing service to vulnerable people in the community.
18. The Cranfield Trust’s 600+ Volunteers are high calibre managers, active in the commercial sector. Most have postgraduate qualifications and are from leading international "The project volunteer business schools. brought (what the charity needed) an "The volunteer had a Business massive impact. We have objective, skilled and plans knowledgeable recently received a £1m approach to our grant based on the vision Performance Finance the volunteer helped us strategic planning Management needs…" formulate…." Hampton Trust Ormerod Home Trust Strategy Where we are now Human Where we want to be Marketing Resources IT Change “I love what you guys do and that you exist in the world.” Love is All We Need20+ years experience as the UK’s leading provider of free management consultancy for the voluntary sector 200+ Management Consultancy Projects a year