No more small change: Where next for charities?

27 June 2017

The dust has yet to settle from the election, and political uncertainty is the new normal. However whatever direction the next six months and the emerging government takes, the fundamentals affecting charities – increased demand, pressure on individual donations, reduced funding from a squeezed public sector – still need to be tackled.

This is affecting different charities in different ways, but in our recent research with the NPC it showed that few will be immune. At our recent launch event one Charity summed up the mood well “there is no point waiting until a month before money runs out to start changing. It’s too late then.”

Other sectors have, of course, already faced this kind of challenge; the public sector and local government in particular, are some years into reduced budgets and increased demand. There are lessons to be learned from what others did well – or got wrong – which can be applied to the charitable sector.

We are launching our thought piece – No More Small Change this month (watch this space) – which summarises our viewpoint on what we see changing for charities and, importantly, how this change can be given the best chance of success.

So what will this mean for charities?

Diversification and prioritisation of services - simply chasing more revenue by doing more is not a sustainable answer. Charities need to identify their strategic priorities and then challenge which services and capabilities truly align to this. There can be movement into new areas and services, but this really needs to be coupled to withdrawing from others. A charity should always be able to answer – what is it we are really good at?

Looking Across the charity at income, efficiency and commerciality – Optimising income is not necessarily just about trying to get more in, but applying a more commercial mind-set across the charity. What investment is needed to generate the return? How many services or other offers can we sensibly manage? What makes us truly distinctive as an organisation as opposed to doing things in a ways that we always have? These kinds of questions aren’t always popular but help make decisions about what really matters. A much loved, but ultimately peripheral service which isn’t delivering for beneficiaries and recipients can survive in the good times but maybe isn’t the priority when belts are being tightened.

Increased collaboration and partnerships – We have been hearing the adage, ‘there are too many charities and lots will merge’ for years now. The reality is that there are many other ways for charities to collaborate and we see this accelerating in the coming year. Collaboration has perhaps not progressed given charities’ fears of diluting their own brands or losing control. But this comes at a higher cost for services, even in areas where a few charities seek to be distinctive. Charities may follow their public sector counterparts in looking to collaborate in investments like IT platforms or sharing some functions across organisational boundaries.

Embracing digital services - The potential of technology can be a cliché in today’s environment, however the transformative impact of the cloud, social, mobile and analytic advances of recent times is there to be seen. The opportunities from technology need to be coupled with a real digital mind set across the whole of the Charity. A digital plan should not be stand-alone – but be embedded throughout the whole organisation’s plan. Across generations we are banking, holidaying, shopping and networking online in ways that public and third sector organisations have struggled to match. The charities that successfully keep pace with the revolution, using digital to reshape their services to beneficiaries, improving the volunteer journey and using analytics across the organisation will get the same disproportionate rewards. Who will be the Amazon, Uber or Googles of the third sector?

Next week we will cover how charities can deliver the change that is coming. 

David Gimson | Senior Manager, Consulting
Profile Email | +44 (0) 7841781211

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James Bowman | Director, Consulting
Profile Email | +44 (0) 7841 563804

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