Charities remaining sustainable in the face of austerity
The charity sector is adept at dealing with change. But the latest round of challenges means charities need to focus, not just on how they deliver their charitable purpose, but also how they flex and adapt their business models. They need to look for opportunities to collaborate, consolidate and make better use of digital technology.
Collaborate over sectors
Charities often end up competing for funding and volunteers. Knowing when and where to compete is critical. Charities need to understand the whole chain of services and how they deliver benefits both to their own users and to others in that chain.
For example, Marie Curie’s view is that “our patients are the patients of others”. The charity works to connect clinical provision with social and welfare support at times of distress during end of life care.
Royal Voluntary Services (RVS) sees its role in providing practical support for re-ablement of patients which would otherwise lead to bed blocking or readmission to hospital. By teaming up with British Red Cross Society and local health and care commissioners, RVS and BRC combined present a network of organisations with complementary skills and capacity.
For smaller charities collaboration is critical to survival and many are already following this route. The Charity Commission review of partnerships suggested that 45% of small charities (defined as £250,000 annual income or below) had already collaborated with at least one other charity.
Of course, collaboration and partnering present risks like loss of direct control, diluted brand identity or donor confusion. However, these can be managed and shouldn’t stand in the way. It’s clear that there’s a real benefit in collaboration and partnering. The Charity Commission found that 82% of the charities which had collaborated felt it had been successful.
Consolidate and localise
Larger and national charities face a dilemma of how to reconcile local delivery with achieving national economies of scale. Conversely smaller local charities have community brand and volunteer loyalty but can’t achieve efficiency of scale in areas such as corporate governance and regulatory compliance. The answer is to develop structures that deliver the best of both worlds.
Adopting a hub and spoke model of delivery provides visible and credible local presence and goes a long way to securing sustained employment, strong links to donors and a good volunteer base. Charities dealing with family respite and end of life care find that this creates community outreach and generates a strong response not just from those using the services but also the nearby community.
At the same time, charities should look to consolidate in areas of common concern rather than developing individual responses. They could define collective responses to the burden of increased regulation and find data collaboration solutions for capturing and analysing the demographic data they need.
Charities can also access support services and advice through organisations like Shared Services for Charities and Charityshare, supported by NCVO’s free to access. The service gives charities access to a library of information.
The kind of approach one is talking about provides the benefits of consolidation without compromising the local delivery approach.
Larger charities may also look to build their capacity and capability to position themselves as regional providers to other charities. Developing a provider network that offers a mix of services and support by larger charities to smaller ones could offer a return on a charity’s own investment in technologies for managing data handling or corporate services by offsetting the costs through income from others.
There are also lessons to be learned from the commercial sector. The telecoms industry has seen two successful but competing providers (Three and Orange) combine their networks to achieve greater efficiency and coverage. At the same time they’ve retained their distinct brand image for their customers. If global giants (and perceived arch rivals) can collaborate for a common cause, charities should too.
Invest in digital technology
Charities are intrinsically people based organisations, but having a people focus and strong social or ethical purpose should not stop them from investing in technology. It’s essential to invest in data management, mobile apps and supporting technology infrastructure. Technology could solve the problem of accurately paying volunteer expenses, for example, which is often cited as a key reason for volunteer attrition.
Putting donors in control of when, how, and how much they choose to donate through technology could help counter the backlash against chuggers, cold callers and targeted mailshots. Sites like Just Giving are attractive to a generation more used to managing interactions on a phone or tablet than being approached in the street or on the doorstep.
Trustees can be reluctant to commit to large investment in technology. But they need to be challenged with the question, “Can we afford not to invest in enabling technologies?” The case for investment needs to show how it will bring greater efficiency through employee, volunteer and donor self-service, improved data flows, more transparency, inbuilt performance management and better governance controls.
Change is a constant and in today’s fast paced technology-enabling world the ability to predict, adapt and respond to it is an absolute imperative for an organisation’s survival. Charities may have highly interpersonal and contact based activity at the heart of their social purpose, but that does not disbar them from ensuring technology is the platform for making their operations as efficient, accessible and wide-reaching as they can be. This would enable the human interaction to be the focus of effective management interaction.
Too many charities see technology investment and the culture change required to embed and embrace it as optional extras in spending the hard-fought giving and grant funding. If this continues the sector will be denying itself the best chance of a sustainable future.
It’s time to act
The charity sector often sees itself as distinct and different from public and commercial business. It certainly has different challenges given its reliance on volunteers and localised community networks and the need to attract sponsors and retain individual donors.
But when it comes to surviving austerity and thriving in an increasingly digital world, where supporters and customers have high expectations, charities are like any other business. Like them, charities have to evolve, adapt and look across traditional boundaries to survive. Whether that means pursuing collaboration, consolidation, digitisation or a combination of all three, the question has to be not “why?”, but “why not?”.