Managing in the new normal


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The presentation was a workshop at Evolve 2014: the annual event for the voluntary sector in London on Monday 16 June 2014.

The presentation was chaired by Anna Bloch from Charity Finance Group and shares highlights of how charities have adapted and are continuing to adapt to the climate, covering reductions in statutory funding and new fundraising strategies.

Find out more about the Evolve Conference from NCVO:

Find out more about the work NCVO does around funding:

Published in: Government & Nonprofit
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Managing in the new normal

  1. 1. Workshops AM7: Managing in the new normal Chair: Anna Bloch, Acting Senior Policy Officer, CFG Speakers: Ian Oakley Smith, Head of Charities, PwC Daniel Fluskey, Head of Policy and Research, Institute of Fundraising Paul Streets OBE, Chief Executive, Lloyds Banking Foundation Thomas Leftwich, Senior Policy Advisor, The Office for Civil Society
  2. 2. Managing in the New Normal Highlights of 2014 survey 16 June 2014
  3. 3. PwC Who I am • PwC Head of Charities • Chartered accountant and Licensed Insolvency Practitioner • Specialist in strategy and restructuring for charities and other not-for-profit entities • Worked with wide range of charities and social enterprises, typically small to mid-sized charities • A member of the Committee of the ICAEW Charities and Voluntary Sector Special Interest Group • A member of the Governance and Audit Committee, The Lord’s Taverners, a charity Ian Oakley Smith UK Head of Charities
  4. 4. PwC Some key messages A “cautious optimism” 1 Concern about scrutiny 2 Greater collaborative working 3 Continued innovation in fundraising 5 Tips for a sustainable recovery 6 Slow interest in social investment 4
  5. 5. PwC A cautious optimism? Survey dated Dec 08 Jun 09 Dec 09 Jun 10 Dec 11 Dec 12 77%93% 68% ??% 46% 55%
  6. 6. PwC Under the microscope: increased scrutiny for charities? 90% 87% 22% 49%
  7. 7. PwC A greater collaboration • 77% of respondents have collaborated or are thinking of it, compared with 69% last year • Service delivery • Joint fundraising • Policy research or campaigning • 90% consider greater involvement of finance teams in strategy Slide 7PwC
  8. 8. PwC Still no real appetite for social investment…? Slide 8
  9. 9. PwC More innovation in fundraising Slide 9
  10. 10. PwC Our top tips for a sustainable recovery Slide 10PwC Information Strategy and fundraising Saying “no” OptionsScenarios CashReserves Governance People 1 2 3 4 5 6 7 8 9
  11. 11. PwC Contact Ian Oakley Smith T: 020 7212 6023 E: Slide 11PwC
  12. 12. Managing in the New Normal Paul Streets CEO, Lloyds Bank Foundation 12
  13. 13. 13 Our new strategy
  14. 14. 14 Our new focus
  15. 15. 15 ENHANCE A grants plus model - offering an optional range of support to strengthen the effectiveness of those we fund What’s available? - 3 programmes
  16. 16. 16 The Challenge
  17. 17. 17 Source: ACF Giving Trends Top 300 Foundations 2014 Report Giving Trends
  18. 18. 18 Source: ACF Giving Trends Top 300 Foundations 2014 Report Giving Trends
  20. 20. • Quality wins over quantity. Take the time to get fewer applications right, rather than sending many in the hope that one may get noticed. • Know your grant-maker. Also known as ‘do your homework’. If you know what the grant maker is looking for, you’re more likely to get their attention. • People and ideas win grants. Ultimately, the strength of your application comes from the strength of the idea and the people behind it. • Honesty beyond necessity. Don’t be afraid to consider and talk about what could go wrong and is going wrong. • Make sure grants are only part of your income mix. Also known as ‘don’t put all your eggs in basket’. Relying too heavily on any one source of funding is an easy and common mistake to make. 20 Our advice to charities is: Source: Inside the Mind of a Grant Maker, nfp synergy
  21. 21. 21
  22. 22. Consultation on a Proposed Sustainability Fund ThomasLeftwich – SeniorPolicyAdvisor,SectorSustainabilityProgrammes CFG Evolve Event – 16 June 2014
  23. 23. Office for Civil Society The Office for Civil Society (OCS), sits within the Government Innovation Group and is part of the Cabinet Office. Set up in May 2010 to support the voluntary and community sector and to deliver key government programmes, working across Government. • Approx 75 staff • Reports to Nick Hurd MP, Minister for Civil Society OCS key objectives: • Make it easier to run a voluntary or community sector organisation • Get more resources into the sector to underpin its resilience and independence • Make it easier to do business with the state 23
  24. 24. The Narrative for the Fund Analysis of engagement with stakeholders and learning from past and current programmes has resulted in the development of an emerging narrative. This narrative broadly follows the following three stages: The following slides explore each of these three stages of the narrative in more depth. . 24 A changing environment •The environment in which organisations are operating is changing. Changes to our society, the economy and Government policy, have created both opportunities and pressures for the VCSE sector Where do we want to be? •It is in all our interests for the VCSE sector to include a diverse range of organisations, delivering high quality services for those most in-need in our society. •To achieve this organisations need to be robust and resilient, able to understand the best route to sustainability and have the resources and capability to follow it. Overcoming the barriers •Organisations need to understand how they need to change, be able to plan effectively for the future and deliver necessary change. •However, many small to medium sized (SME) organisations struggle to do this whilst also reacting to the immediate challenges they face. This fund can work to provide these organisations with the support they need in order to realise the vision.
  25. 25. • Support to deal with funding cuts through the Transition Fund • Growing the Social Investment market: • Establishing Big Society Capital • The Investment and Contract Readiness fund • The planned market development foundation • Reforming support for the sector through Transforming Local Infrastructure • Opening up public services to the sector: • Working with commissioners • Introducing the Social Value Act • Supporting innovation in, and scaling up, social action: • The Innovation in Giving Fund • The Social Action Fund • The Centre for Social Action • Making it easier to run a VCSE organisation by cutting red tape The environment in which the sector is operating is changing 25 • Need for new skills and capability • Increasing demand for services • Capacity limitations resulting from increased demand • Funding cuts and changes • Opportunities to deliver public services • Greater competition for existing grants and contracts • Increasing overhead costs • Growing expectation to demonstrate evidence of impact From Government: • Continued spending restraint • Welfare reforms • Local authorities switching grants to contracts • Focus on growth • Reforms to commissioning Wider Society • Effects of budget cuts and welfare reforms • Aging population • A more diverse population • Increasing use of digital A changing environment Evolving pressures and opportunities for the sector A changing operating environment A range of support and strategies
  26. 26. 4. What does the sector need to take the right pathway? 2. What is needed to achieve this? 1. Where do we need to be? 3. What are the pathways for the sector? Our vision is that the fund will help tosecure adiverse range of organisations delivering high quality support for those in-need 26 A diverse range of organisations delivering positive outcomes for some of the most vulnerable and disadvantaged in society Maintain core services by restructuring and reducing costs Generate income through trading/establishing paid for services Deliver public services Robust adaptable business models and clear forward plans Access to appropriate sources of external support and expertise An appropriate skills base in both executive staff and trustees Access to appropriate funding to resource change
  27. 27. The journey to sustainability for struggling organisations requires aseries of stages. However, this can be difficult for medium sized organisations lacking resource 27 i. Awareness: An organisation needs to be aware that its operating environment is changing ii. Understanding: An organisation needs to understand what this change means for them, and that they need to change too iii. Planning: An organisation needs to plan to deliver change iv. Delivery: An organisation needs to deliver necessary change v. Learning: An organisation needs to understand the impact of delivery and share learning Expertise to carry out needs analysis and forward planning Funding to free up capacity to deliver change or deliver necessary action Therefore a potential aim for the fund could be : To identify voluntary sector organisations delivering vital services to vulnerable people in our communities, but struggling to adapt to their changing environment, and put them on the right pathway to securing the long term future of their services. Funding to free up capacity to engage in planning Expertise to enable delivery of specific actions This fund could support small to medium sized organisations on this journey by providing:
  28. 28. • The Consultation launched recently and will run for 12 weeks until the 24 July. • The intention is for this to be a co-design consultation around the key themes and challenges identified. This will not involve simply proposing a complete fund design and inviting feedback. The responses received will be used to formulate a fund design. • The consultation will invite active engagement. Advice received has highlighted the need to combine both online and face to face. The Consultation can be accessed at: sustainable Queries and comments on the consulation can be sent to: AnActive and Open Consultation 28
  29. 29. Timetable • Gain approval for consultation document April • Launch consultationLate April • Active consultationJune – July • Analysis of responses and establishing fund design July • Gain full business case approvals • Commence sector awareness raising Late summer • Identify delivery partner/s and finalise application design Autumn • Fund launched for applicationsDec 29 The following is a high level forward timetable for the fund development. This timetable is indicative at this stage and depends on the nature of final fund design established through consultation. PlanConsultDesignDeliver
  30. 30. Excellent fundraising for a better world Managing in the new normal – fundraising Daniel Fluskey, Head of Policy and Research
  31. 31. Excellent fundraising for a better world A familiar scenario? Charity wants to do more and increase services Can only increase service if have resource to fund it Resource needs to be sustainable Investment and growth for fundraising Growing need / demand for service
  32. 32. Excellent fundraising for a better world Putting it into context • Latest information available: 2011/12 - Voluntary sector saw a net real-terms fall in its total income of £700m - Income from government fell by £1.3bn (with more to come) - Income from individuals is the biggest source of income for the sector, rising by over £500m from 2010/11 and 2011/12 - Value of reserves fell by almost £2bn
  33. 33. Excellent fundraising for a better world Future fundraising environment
  34. 34. Excellent fundraising for a better world Fundraising challenges
  35. 35. Excellent fundraising for a better world How are charities responding?
  36. 36. Excellent fundraising for a better world The new normal for fundraising • There will be more fundraising! • Developing new fundraising activity and getting good return on investment will be challenging (it always was and always will be) • Everything will change, and everything will stay the same • Skills, experience, and expertise in fundraising will be in demand • Investment for fundraising needs a clear and planned ‘whole organisation’ approach – the numbers DON’T tell the full story • External challenges (transparency, scrutiny) and ethical questions will need to be addressed by all organisations
  37. 37. Excellent fundraising for a better world More information • Introductory videos • Code of Practice Contact me:
  38. 38. Evolve 2014