Also management

Successful charities are built around good governance, with strong and robust accountability, transparency and ethical behaviour added to the solid foundations set by legal and regulatory compliance. Charities which take governance seriously also invest in the continuous improvement of their board so that trustees can deliver the organisation’s charitable and public benefit objects in an effective and sustainable manner. A key aspect of this will be the undertaking of a regular board review.

Board reviews can meet a certain amount of resistance from some trustees, but with boards in other sectors regularly expected to undertake an annual review of their performance and effectiveness, they are a concept and activity that is long overdue in the charity sector. The revised code of governance for charities, currently out for public consultation, recommends that an annual review be undertaken, with large charities advised to have an externally led review every third year.

Why review the board?

Board members should bring a wide range of skills, experience and expertise, as well as diversity of perspective and background, and enthusiasm to their role. Expectations of the role of trustee boards have developed rapidly in recent years and new demands are regularly placed on charity leaders.

A board committed to achieving the charitable objects will want to be kept up to date on all those factors likely to impact on the charity’s success, and to fulfil their legal, regulatory and ethical duties with professionalism and confidence. A board review is one way to provide boards with a snapshot of their collective strengths and a mechanism to address any areas that require attention.

Every governance code, from every other sector, states the importance of the effectiveness of the board and the role that board evaluations play in effecting good governance and sound decision making for the success of the organisation and the people it seeks to serve. The charity sector is no different in this respect, and there is a growing expectation from regulators, funders, donors, staff and, most importantly, beneficiaries that charity boards will adopt similar standards.

Reviewing performance is critical to running an effective board, and can help avoid or resolve many related problems that attract criticism, such as: board renewal; removal of poor contributors; independence and "group think"; increasing the diversity of the pool of trustees; multiple trusteeships; and tenure.

Monitoring and improving performance

Boards continually need to monitor and improve their performance. A board review provides a powerful and valuable feedback mechanism for improving board effectiveness, maximising strengths and highlighting areas for further development. The review process should aim to be objective and rigorous.

If a board is to be reviewed it is worth reminding the board of what it is there to do:

• Develop strategy and make timely strategic decisions.
• Ensure operations are in line with agreed strategy, and monitor the senior management team’s performance against agreed goals or key performance indicators (KPIs).
• Provide help and advice, and act as a sounding board for the senior management team.
• Ensure the integrity of financial information and the robustness of financial and other controls.
• Oversee the management of risk and review the effectiveness of risk management processes.
• Ensure that the right people are in place and coming through, both within the board and the wider operations of the charity.

Role of the chair

For any board review to be successful, it is essential that the chair is fully supportive. Any half-hearted support is likely to be transmitted to fellow trustees, who in turn may not be as fully engaged and candid as the process requires.

The chair must know and understand the process of the review, if only in outline, so that they can speak authoritatively in support of the review and be able to convince fellow board members that the exercise is not a "witch hunt" to root out individual trustees.

The chair has a key role in presenting a narrative that focuses the board’s attention on what the process will do to improve the work and effectiveness of the charity for its beneficiaries. It is therefore likely that the chair will have discussed with the chief executive and the governance professional what the review needs to achieve: is it a radical overhaul of the board’s skills and competencies; a health check; to address a specific problem; or to help guard against any complacency or inertia in the boardroom?

There has to be clear "buy-in" from participants if they are to get the most from the exercise. Otherwise any board review is likely to be a waste of money.

What should be reviewed?

Whether facilitated internally or externally, board reviews should explore the mix of skills, experience, knowledge and diversity of the board, in the context of the challenges facing the charity. The clarity of the leadership in attaining the charitable objects, strategic goals and values of the organisation should also be considered.

Succession and development plans, how the board works together as a unit and the tone set by the chair and chief executive are important considerations, as are key board relationships, particularly the chair/chief executive, chair/vice chair, chair/governance professional and the relationship between trustees and senior managers.

Reviews that delve into the effectiveness of individual trustees, the effectiveness of the governance professional and the effectiveness of board committees, and how their work is connected with the main board are essential. Similarly the quality of the general information provided on the organisation and its performance, the quality of papers and presentations to the board and the quality of discussions around individual proposals should be looked at.

Consideration needs to be given to the process the chair uses to ensure sufficient debate for major decisions or contentious issues and the clarity of the decision-making process. The use of delegated and reserved authorities, and the processes for identifying and reviewing risks should also be identified.

Finally, how the board communicates with, and listens and responds to, members, staff, volunteers, beneficiaries and other stakeholders is of major importance.

The impact of board reviews

Research into board evaluations in FTSE-listed companies has found that the most impactful questions focus on the board’s role in setting and testing strategy; board time and agenda management; overall organisational performance (through open-ended questions); succession planning/visibility of management; and the quality of board papers.

Most boards deem evaluations to have a positive impact. In particular they have:

• Helped to surface issues.
• Generally improved board performance − better dynamics and individual performance.
• Improved board processes − improved strategic agendas; more time for discussion and debate; better board papers; time and frequency of meetings; more interaction between trustees and senior managers and the next management level down.
• Strengthened board cohesion.
• Improved board composition.
• Identified training needs.
• Identified board succession priorities.
• Improved focus and clarity of purpose.
• Provided a clear action plan derived from the report to the board.

It should be noted that a strong chair and/or governance professional will pick up on things before the review. The process should therefore act as a sense check for the chair. In general, the benefits tend to be seen at the group level rather than the individual level.

Using the results

The outcome of a board review should be shared with the whole board and fed in to the board’s work on composition, diversity plans, skills audits, induction design and development programmes. It may be useful for the charity to have a review loop to consider how effective the board review process has been.

Some charities may provide details of the exercise and its results in the annual report, or some other publicly available medium. Good governance practice would include a precise of the activity agreed to be undertaken to address the issues raised.

It is likely that future board reviews will incorporate the learnings and actions from previous exercises to demonstrate that progress has been made, or to flag up those activities and aspects of board development that have been more successful than others. Any temptation to park the findings of the review on a shelf and ignore the conclusions will be a waste of opportunity for the board to improve and, more shamefully, a waste of charity resources.

If only I had a pound for every time someone told me procurement exercises would be more efficient and straightforward if they were run outside the European OJEU process (that’s in accordance with the Public Contracts Regulations 2015 if you are a lawyer like me). But I have to say, I am not sure I agree.

The first point to make is that once an OJEU process has started, the principles of transparency and fairness prevent any contracting authority (that’s a state owned, controlled, funded or regulated body to you and me) speaking to any one participant in the procurement, without sharing details of that conversation with all other participants.

For that reason, completely open dialogue with a contracting authority once the process has begun is rare. That means it is important for contracting authorities to “soft test” the market before formally launching a procurement exercise.

Engage early

I am a strong advocate of charities, and indeed any other suppliers to the public sector, seeking to engage with contracting authorities on their future procurement activities before the time comes for them to kick the process off. In that way, each party to the conversation can have a full and frank dialogue as to what is currently available on the market, supply issues, concerns with regulation, shortage of labour and the like.

This is your chance to influence future processes (legitimately!) in a way that might appeal to the way you do business. So be brave, go and talk to your potential employer clients well before they start their procurement process.

Outside OJEU procurement there is so much freedom and flexibility in the way a purchasing process can be run that you will not necessarily be able to play to your strengths when competing against other bidders. With OJEU, on the other hand, standard form prequalification questionnaires are now de rigour - so you know what to expect, and can have all details to hand and stored centrally, so they can be easily updated and mobilised each time a qualification opportunity comes along.

Contracting authorities must publish full details of their scoring criteria and associated weighting, which is often accompanied by their scoring methodology. This is not so different from my GCSE maths book back in the day, which had questions at the front and all the answers in the back.

Criteria matching

Amazingly, however, people still fail to read the guidance that accompanies the bid documents, and fail to pay attention to these details. At risk of stating the obvious, if a tender is being run on a 30:70 quality to price basis, pricing of the bid is going to be more important than the quality of the solution, so if you know you have difficulty supplying a competitive price in all probability you may as well save your resources and wait for a better opportunity to come along.

Equally, if your success depends on an ability to produce a number of references evidencing your experience in providing similar services and you have no one to supply such references, well, then move on!

You should not waste words telling a potential client who they are by parroting the content of their tender, or indeed, by replicating the contents of your standard marketing collateral. Instead, you should be focused on trying to meet the scoring criteria, having one eye on the scoring methodology and another on use of words. Make sure you clearly tell the contacting authority why it is that your skills, resource and experience will help the contracting authority to better achieve its objectives. Which takes me on to another point…

Understanding objectives

Do you know what their objectives are and what they are looking to achieve as a result of the procurement process? If you don’t, then perhaps you ought to.

Tender processes will always have an initial period during which clarifications can be raised by bidders and answers sought to any unknowns and ambiguities in the tender documentation. A golden rule is therefore to read the tender documentation early on, even if only at speed, so you can identify any time periods that are applicable to the procurement. Do not make the mistake of reading the tender for the first time after the date for receipt of clarification questions has passed!

Once you have identified the deadline for clarifications, make sure you read the documents fully again in advance of the deadline so you can put in a strong bid having raised any questions to which answers are required in advance.

Although it depends on the nature of the procurement process, contracting authorities are usually prevented from making material amendments to their contract documents once the procurement process is well under way. They are also restricted from making further variations once a contractor has been appointed.

Contract clarity

You should raise as soon as possible in the process, ideally during the course of clarifications, any concerns about commercial or drafting points in the documents. Generally speaking, contracting authorities will be reluctant to concede substantial changes favourable to a contractor, but they should be open and amenable to changes that could have a material impact on a charity’s ability to deliver - so read the draft contract carefully and identify these sorts of points as soon as you are able.

It can be very frustrating and awkward (not to mention legally questionable) for contracting authorities if bidders wait until they have been awarded a contract to point out all the things they don’t like about it – at that point, arguably, it is simply too late.

At clarification stage think carefully about whether circumstances may arise further down the line meaning some form of variation to the contract may be needed (possibly to keep pace with economic fluctuations or to account for market variations). If not already built into the contract, you may want to propose the introduction of a change control mechanism to facilitate this sort of amendment; it is likely to make life a lot easier in the long term.

Feedback challenges

Once clarifications are dealt with and your tender has been submitted, it’s then a waiting game to discover the outcome. If you are unsuccessful, remember that you are entitled to feedback. Don’t be afraid to query the contracting authority’s decision and ask for more information about why you were not successful and also understand the reasons for choosing the successful bidder.

Seeking feedback is always useful from a "lessons learnt" perspective, but it can also sometimes help identify if there were any irregularities in the procurement process that you may want to raise with the contracting authority. A decision to raise a formal challenge should never be taken lightly, but bidders should certainly be alive to the fact that procurements can occasionally be flawed, and that they – the bidders – actually play an important role as part of the checks and balances within the public procurement system.

Winning outcomes

Ultimately, when bidding for, contracting with or generally working alongside contracting authorities, charities should always keep in mind that contracting authorities are – like any business – looking to secure the best deal for the best value.

They are usually required to do so within the parameters of the public procurement regime, but these parameters are, in my view, more of a help than a hindrance in creating an effective business framework. The overarching commercial principles remain the same and charities should use these to their advantage to win the best bids.

A number of Housing Associations are rumoured to be seeking to “de-register” with the Charity Commission following a change in the law around the disposal of housing stock brought in by the Housing and Planning Act 2016.

Current prompt

The current prompt for questioning and potentially deciding to move away from registered charity status is that when Schedule 4 of the Housing and Planning Act 2016 is fully implemented disposals of housing stock will become more simple for housing associations which are community benefit societies, but arguably more complex for those which are companies registered as charities with the Charity Commission.

The reason for this is that the restrictions on disposals of charity land which are contained in sections 117 to 121 Charities Act 2011 do not apply to exempt charities and for many years housing associations have only had to comply with a requirement for consent to the disposal under Housing Acts by, in England, the Homes and Communities Agency and in Wales, the Welsh Government.

It is this requirement for consent which is being removed (with the intention of making it easier for housing associations to dispose of land and buildings).

Why fuss

So what about housing associations which are registered charities? Why are they making a fuss? The Charities Act 2011 (like earlier charity legislation which it replaced) contains a provision (s.117(3)(a)) that if authority for the disposal of land by a registered charity is granted by provisions of another Act of Parliament (in this case the Housing Acts) then the restrictions on disposal in the Charities Act 2011 don’t apply.

By taking away the requirement for consent from a Regulator under the Housing Acts, s.117(3)(a) will no longer allow the housing association which is a registered charity to dispose of land without complying with the Charities Act 2011 provisions (either an order authorising the sale granted by the Charity Commission or compliance with a statutory procedure requiring advice from a qualified surveyor).

More regulated

Whilst it will be possible for the registered charity housing associations to comply with Charities Act 2011 procedures, it is true to say that disposals of land and buildings by them will be more regulated than disposals by housing associations which are not registered charities.

Mind you, who on earth would sell land or buildings without a surveyor’s advice? Surely any trustees (whether of a registered charity or of a community benefit society exempt charity) would want to be able to cover their own back and if necessary prove with appropriate evidence that the sale was on terms which were in the best interests of the charity?

Even the most ordinary of house sellers gets one or more estate agents to value their property before selling it!

Possible trigger

However, this additional requirement relating to land and building sales for Housing Associations which are registered charities might well be the trigger for looking more closely at the possibility of changing their legal status.

This would be a change from being regulated by Companies House and also registered with and regulated by the Charity Commission (and HMRC for charity tax benefits) to a community benefit society registered with and regulated only by the Financial Conduct Authority (FCA) while continuing to benefit from being registered with HMRC for charity tax benefits.

There is a relatively simple statutory process which can be used to achieve this (s.115 Cooperative and Community Benefit Society Act 2014). Usually we see the process working in the other direction using s.112 to convert a charitable community benefit society into a charitable company (mostly to obtain a Registered Charity Number).

What this illustrates is that to a very large extent an organisation can choose the degree to which it wishes to be regulated by the Charity Commission.

Status wrapper

“Charity status” is, in simple terms, a wrapper which goes around many different legal structures from trusts to Royal Charter Corporations and with a variety of legal entities in between. Public recognition of that status is granted (in England and Wales) either by being registered with the Charity Commission and/or by being granted access to charity tax reliefs (and Gift Aid) by HMRC.

The fundamental principle is that the organisation must have a purpose which falls within one of the descriptions of charitable purposes in the Charities Act 2011 and conduct activities in furtherance of that purpose for the public benefit.

And that is where the similarity between all charities begins and ends

Within certain parameters, legal structure and method of registration and regulation are down to individual choice.

So why do so many charities fight tooth and nail for that Registered Charity Number, which the housing associations we are talking about are prepared to ditch in order to be able to sell their land without complying with steps which are there to ensure that charities (and their trustees) are properly protected?

Analysing merits

To answer this we need to analyse the pros and cons of “registered charity” status v “exempt charity” status.

The pros (of registered charity status) are:

The cons (of registered charity status) are:

There are several cases every year of community benefit societies seeking to convert to become charitable companies registered with the Charity Commission for the reasons outlined above and it is going to be really interesting to see whether those housing associations which are registered charities will indeed trade in this privileged status for the dubious gain of reduced regulation when wishing to dispose of land and buildings.

Unanticipated consequences

Housing associations which do choose to change may have to deal with unanticipated consequences. Whilst a conversion does not mean that they are a new legal structure (they will be the same continuing body), the terms of contracts and funding arrangements from banks and others may require consent to the conversion from a funder.

There have been examples in the past of banks using applications for consent to a change of status as their own trigger for a review of funding arrangements leading to higher interest rates and new arrangement fees being charged.

Documenting reasons

Trustees will certainly need to be very careful to take advice which covers all the possible implications of the change of status. They will need to document the reasons for their decision and demonstrate that the change (and incurring the costs associated with a change of legal status in this way) is in the best interests of their charity (and its beneficiaries) and not just made to avoid legislative requirements which they happen to think are inconvenient.

Trustees have been accused of everything, from the mismanagement of finances to negligence, through to not asking the right questions. Now trustees face a raft of new regulation.

Disqualifying trustees

In April 2017 new powers to disqualify trustees for up to 15 years come into force as part of the Charity Act 2016, which is helping to address gaps in the Charity Commission’s protective powers. The Act introduces more reasons that will prevent people from becoming trustees and once in force, trustees who are then disqualified will need to stop acting in those positions or apply for a waiver.

These is also CC20 - the Charity Commission's new guidance to trustees about fundraising which empowers trustees to engage with staff on issues to do with how fundraising methods can affect the reputation and long term success of the charity.

Trustees must also engage with revised finance guidance from the regulator and take full responsibility for all risks.

I believe that this combination of more public scrutiny and tighter regulation means that charities have "Crossed the Rubicon" – the point of no return.

Charities need to tackle their governance issues and ensure more robust governance in the future in order to survive and this cannot be done if they have weak or ineffectual boards.

Rethinking boards

Many charities will need to rethink their boards and ask some really tough questions about whether or not the trustees have the right skills and experience for the job in hand.

If not, they will probably need to take some risks, such as recruiting outside their traditional comfort zones and in many cases, outside the sector.

One big issue is that too many boards are still recruiting in their own image, with trustees often male and of a certain age, so it is little wonder they are often perceived as being too "pale, grey and stale".

Whilst some charities recognise the need to have trustees from different backgrounds with more diverse skills, they still tend to rely on word of mouth for recruitment or fail to promote vacancies outside their networks. Consequently, they are failing to attract different people.

Many are also missing out on younger talent too – people who could introduce new skills, different ways of working and perhaps bring more energy and enthusiasm to the role.

Digital skills

Bringing on board young people with digital skills can be invaluable in terms of helping with fundraising and marketing strategies and ensuring a charity stays current and relevant to donors and beneficiaries.

However, the Young Trustees Guide from Charities Aid Foundation found that fewer than 2% of UK charities have a trustee under the age of 24 and the average age of a board member is 57.

But successfully engaging young trustees or those outside the sector will take a complete mind set shift. Boards will need to be more open minded about whom they recruit, welcome people from more diverse backgrounds and be prepared to spend time training and mentoring them. They may also need to rethink their board meetings – when they hold them. Whilst a lunchtime meeting at a golf club might suit a retired trustee, it is unlikely to suit a young professional with work commitments.

More education is needed too about the true responsibilities and also the benefits of the role. Whilst you don’t want to deter people from volunteering their services, the liabilities and responsibilities must be fully understood.

Commercial sector

This is why often people in the commercial sector with senior level or board experience can make good trustees. Many professionals will have sat on boards during the financial crisis. They will have experienced their own organisations coming under fire and increased public scrutiny and they have had to strengthen their governance in response. Surely, such individuals could be assets on a charity board now and in the future?

The growing demand for professional skills on charity boards is something that certain initiatives are addressing. These initiatives involve board-level volunteering programmes which train and place business professionals onto non-profit boards. Organisations involved include Barclays, Google, Credit Suisse and law firm Mishcon de Reya, amongst others.

One charity which has benefited from such a programme is the housing charity LHA London. As a charity dealing with housing for younger people, its goal was to recruit younger trustees to better connect with its beneficiaries. The Charity Commission’s guidelines also identify “the ability to give insight into your beneficiaries' needs and experience” as a core trustee skill and more charities should take note of this when recruiting.

Legal credentials

LHA London recruited Alexandra Whiston-Dew, a young media lawyer from Mishcon de Reya who had completed the programme. The board was impressed with her legal credentials and understanding of social media when communicating with young people.

One of the benefits for LHA London was that Mishcon de Reya encourages its employees to volunteer a percentage of hours each year for charitable purposes. LHA had anticipated it would be difficult for a young professional to balance career demands with attending board meetings, subcommittee meetings and away days. They were relieved that Alexandra could commit fully to the role.

Describing her experience Alexandra said: “Many trustees on the board know the organisation inside and out but I have been welcomed and my views have been carefully considered and accepted. I am learning a great deal from the trustees and management. I am being taken out of my comfort zone and am making decisions that are important and impactful.

“This experience is helping my career development too. I can more easily understand what clients need from advisers. I would recommend trusteeship to anyone – but it must be approached professionally and with passion, it can’t be a tick box for the CV.”

Skilled trustees

With charity governance being increasingly important programmes like this are helping charities recruit skilled trustees who are used to working in a regulated environment and can not only bring essential and highly valuable skills but also a fresh perspective to the board.

This kind of partnership not only allows charities access to professional people, but for the companies involved it serves as an alternative leadership development programme and a way to contribute to society in a sustainable way. By recruiting more professionals from outside the sector, charities can improve diversity and recruit a board better equipped to deal with the demands of a modern charity.

Background before the strategic review

The foundation was started in 1827 as the Merchants’ Seamen’s Orphan Asylum in the London Docks area. Since then, the foundation changed its name a number of times. The original name was retained until 1902 when the Orphan Asylum became the Royal Merchant Seamen's Orphanage, before becoming the Royal Merchant Navy School in 1935. The charitable and educational activities were separated with the latter, in 1977, becoming Bearwood College and the former, in 1981, becoming unincorporated as the Royal Merchant Navy School Foundation.

Finally, in 2013 and after the sale of the school, the Royal Merchant Navy School Foundation became a CIO (Charitable Incorporated Organisation) called the Royal Merchant Navy Education Foundation.

Also since 1827, the asylum/orphanage/school moved from Bow Road (1827 – 1862) to a purpose-built orphanage in Snaresbrook (1862 – 1921) to the Bearwood Estate near Wokingham (1921 to date). The move to Snaresbrook was specifically intended to remove the orphans from the foul air of London into fresh, clean, country air but, as London overtook Snaresbrook, the then chairman of governors bought the Victorian, 500 acre, Bearwood Estate in 1919 and gave it to the foundation, again to enable the orphans to be educated in the country air.

The costs or overheads for the foundation of owning and managing this Grade II* listed estate arose from there being:

• A letting agency managing residential and commercial tenants and maintaining buildings.
• A maintenance company responsible for maintaining the estate.
• A utilities company providing and maintaining the supplies of water, sewerage, gas and electricity to the tenants, 365 days per annum.
• Legal responsibility under the Reservoirs Act 1976 for the maintenance and safety of a 43 acre lake and London Clay dam.
• Addressing the task of having to move off illegal occupiers who settled on the estate.

Also and very important to note is that the foundation has been in the Monarch’s patronage since 1836 and, currently, our patron is Her Majesty The Queen and our president is HRH The Duke of Edinburgh.

These rather complicated affairs are mentioned simply to demonstrate that the charity had a considerable amount of historical and cost baggage that had to be dealt with by the strategic review which had to be undertaken.

Key issues for strategic reviews

There are two crucial issues governing the potential success of any strategic review:

1. All trustees must agree the need for and engage in a review.
2. Discussions regarding the strategic aims must very specifically exclude constraints such as finance, time or human. Constraints only enter the discussion when working out how the charity is going to implement the agreed strategy.

Specific issues according to the trustees

There were of course specific issues which had to be addressed in the review and key to identifying the foundation’s strategy were the trustees’ clear directions on these issues:

1. To retain the charity’s beneficiary class which comprised and still comprises the needy children of Merchant Navy seafarers with preference being given to those with British nationality.
2. To help more beneficiaries.
3. To identify the educational needs of today’s beneficiaries.
4. To remember the foundation’s original remit in 1827 which may be summed up as providing board and lodging, and sufficient education to enable the orphans (beneficiaries) to gain employment.
5. To enable funding to meet today’s educational needs. This not only meant the disposal of some or all the Bearwood Estate but also meant a reduction in operating costs.

Nationally, the trustees concluded that two issues would affect their beneficiaries: first the economy and, second, youth unemployment. The foundation could do nothing about the former but could do something to reduce the latter which, conveniently, would allow the foundation to hark back to providing education for employment. And so the strategy evolved of assisting with the education of the foundation’s beneficiaries so as to give them the edge over their peers when seeking employment.

It was also essential that the charity’s patron, president and all other benefactors and interested parties such as the Charity Commission were kept informed of progress and decisions.

Implementation of the strategic review

Having agreed the strategy, implementation was next addressed and the key to this was to dispose of the Bearwood Estate.

Owning 500 acres in Berkshire and with very few cash resources made the Foundation “brick-rich and cash-poor”. Also, the trustees recognised that owning (a) a school that was becoming increasingly difficult to keep going and (b) an estate that was under-performing and had very high maintenance costs were considerable millstones around the foundation’s neck so they agreed to dispose of the Bearwood Estate.

So although the trustees knew what they wanted to do, they could not do it because, in 2007 when the review began, the foundation found itself embroiled in a legal battle which prevented the disposal of any part of the estate. This battle lasted for five years and was not resolved until 2012 when the sale of about 106 acres of land and buildings to Bearwood College was completed. This sale provided the foundation for the first time in its existence with substantial cash reserves and allowed the trustees to begin the process of increasing the number of their beneficiaries.

Three months after the resolution of this legal battle, the Bearwood Estate was placed on the open market for sale which resulted, in September 2015, in completion of the sale of 120 acres to Reading Football Club, and in December 2015 the trustees moved the foundation’s offices off the estate.

Results of implementing the review

Today, the foundation is a Charitable Incorporated Organisation with a modern constitution, a modern website and a simple but clear strapline: "Education is the Foundation".

Today, the foundation can now help its beneficiary class at almost any educational stage, from the start of "day care" until the beneficiary has obtained their professional, career-entry, qualification. The trustees do not expect to have to help any one person for all that time; rather they expect to help them on and off according to their need.

Retained acreage

Today, the foundation still retains the freehold of some 265 acres of the Bearwood Estate; 60 acres comprise woodland and rather more than 200 acres are leased on a long term basis to one of the country’s top 30 golf courses and provide a sound income.

In brief then, the trustees have managed to dispose of those parts of their land assets that were the most expensive to maintain while still retaining substantial acreage.

Capital and income

The disposal of these two parcels of land and buildings and the closure of Bearwood College in September 2014 have generated substantial funds, and the trustees agreed that the consequential investment income, but not the capital, would be used to meet the needs of the beneficiaries. The longer term plan is to operate the foundation using the rental income from the golf course and to use all the investment income to help the beneficiaries.

Having settled in its new offices in Hungerford, the foundation is now a tenant, for the first time since 1830, and it’s a joy not to have to be concerned about the possibility of someone falling into the lake, or having to mend a leaking roof or freeing up a blocked sewer.

The downside has been the need to make about 86% of the staff, excluding those employed by Bearwood College, redundant, and this aspect has needed to be very carefully handled. The trustees are pleased to learn though that each of these former employees has obtained new employment

Just one example of reduced costs will suffice: this is where the foundation’s insurance premiums have reduced by around 98%.

Beneficiaries of the strategic change

Most importantly of all, the trustees have multiplied the number of their beneficiaries by a factor of three and we are well on our way towards our target which requires a multiplication factor of ten!

I must end by saying that this foundation has been extremely fortunate in having a board of very capable and dedicated trustees without whom I do not like to think where the foundation would otherwise be.

For many years "impact measurement" in the charity sector was an unknown quantity; talked about frequently, but not well understood. Whilst there is, and will always remain a need to improve the way the sector measures impact, the sector as a whole is moving to a place where it is looking to define how impact measurement can drive its core business areas including strategy, operating models, service improvement, performance management, and skills development.

However, in no area is this pressure more acute right now than in solving how impact measurement can establish, or re-establish a sustainable funding model for charities.

From acquaintances to friends

Impact measurement and income generation are often like two acquaintances on the periphery of a friendship group – they interact, they share some common ground, and they know they should get on – but they don't make the effort to get to know each other and to become close friends. They need to, and there are two main reasons why.

First is the ever growing interest from funders and partners in the difference that cash donations and gifts in kind are making to their intended. This is now a well-rehearsed narrative – high profile charity failures, a growing scepticism amongst the UK public of the effectiveness of the charities which they support, and a digital generation expecting more information more quickly. The rise of social investment models and the staying power of payment by results contracts are further drivers of this change.

These models inherently lock in funders and delivery agents to a transparent model driven through performance management and deemed to succeed or fail based on robust measurement of social and financial returns. Whilst public opinion and the profile of the issues mentioned can move in cycles the charity sector must always strive for greater transparency and efficiency when spending other people's money.

The second driver is delivering real social change; life changing social change. Financial pressures often dominate the discussion, however in my opinion this driver is and should always remain the key reason behind linking impact measurement with income generation. A charity's beneficiaries will be experiencing one or more significant challenges in their lives, and these challenges are likely to be faced to some degree by subsequent generations.

To create significant change in their lives now and in the future will require learning, adaptation, and sustainable funding. These three enablers can and should be driven by quantitative and qualitative evaluation and research methods to demonstrate change and the drivers of change to all of the funders and other stakeholders involved.

Tools and approaches are available

The good news is that the tools and approaches needed to capture, process, analyse, and report on data are available. It is how you apply them that matters. Here is a proven five-stage approach to embedding the relationship between impact measurement and income generation.

The first stage is strategic. Spend time segmenting your audience base including your major donors, corporate partners, individual givers, commissioners, trusts, foundations, and other key stakeholders such as delivery partners, staff, and volunteers. If your charity is significant in size or scope then it is likely that you will need to model your audiences by applying quantitative data segmentation methods.

Secondly, create a data matrix that maps your audiences, their messaging needs, the indicators that will demonstrate change, data sources, and finally collection and analysis methods. This data matrix will form the core of a data strategy that is audience-led.

Thirdly, turn that data strategy into a reality by implementing the required changes to staff skills, data collection systems, data collection processes, and, crucially, by setting aside enough time and expertise to analyse, synthesise, and understand what the data are telling you about performance and about social impact. At this stage many organisations fail to make the sufficient investment required in training and systems. It can be difficult to find the budget space for upfront investment but this is a prerequisite for sustainable growth.

Fourthly, create reporting products that appeal to your key audiences. It is human nature to respond to and process visual scenes more efficiently and effectively than written prose. Data visualisation is crucial to communicating your key messages and ensuring that they are heard and understood by the people who you are trying to convince.

Finally, create a feedback loop by gathering feedback from your key audiences on the messages that they are receiving. We live in an ever-changing, dynamic society, and the charity sector is no different. People's wants and needs will change and an ongoing programme of audience engagement is needed to stay on top of these changing trends.

Engagement won't bite

At the heart of this five-stage approach lies the principles of engagement, co-development, and innovation. Charities are often reluctant to engage with their funders outside a structured bidding or application process through fear of showing results that are less than perfect, or uncertainties surrounding the changing needs of beneficiaries and how charities operating models aim to address those uncertainties.

Whilst there are inevitably some funders and individual givers who will be turned off by less than perfect results, this is unlikely to represent a significant portion of your base that would put your business model at risk. And anyway are these the people that you ultimately want engaged with and funding your work?

By being brave and putting the longer term before the shorter term, charities can obtain significant benefits and build towards that sustainable financing model. In the social investment space there has been an explosion of advisers, investors, and intermediaries (often referred to as SIFIs, or social investment financial intermediaries).

These organisations exist to provide advice on elements of a funding model where charities can lack experience – complex contracting arrangements, legal structures, commercial arrangements, financial and business modelling – and can provide new and innovative ideas when brought into model development.

The wider funding market is no different. Individuals, trusts, foundations, and corporates on the whole give because they believe in the same social mission that the charity believes in. My experience is that funders are open to learning, to sharing experiences and skills, and to receiving real rather than "jazzed up" reports of progress and impact. And again if they aren't then are these the right funders for your charity in the longer term?

A sustainable funding model is built from strong relationships, a commitment to your social mission, and achieving genuine change for your beneficiaries. They are interdependent, not mutually exclusive, and this is why your impact measurement and your income generation need not only to align, but inherently drive each other as one package of information and insight.

Charities also need to align with partners and sub-contractors to ensure that where there are multiple contributors to ultimate impact of an intervention or advocacy initiative that the contributions and successes can be measured, attributed accordingly across the partnership or supply chain, and that funders can understand collective impact and shared measurement.

Laying foundations for closer working

Charity leaders are having to adapt to a rapidly changing funding environment, with a desire for greater transparency and proof of results being one of those fundamental changes. There is evidence that charity leaders are growing ever more reluctant to accept funding that does not drive their social mission or vision for their beneficiaries and society.

Whilst the desire for greater impact measurement alone is not a reason to adapt or rewrite a whole income generation strategy, it is a strong driver of change to the way that impact is defined, demonstrated, and reported, with co-development among stakeholders at the heart of that change. Impact measurement will not, for example, lead to an end in traditional forms of fundraising; in fact it should strengthen it. However, to achieve this all charities must match their income generation approach closely to donor asks, to how they operate, and to how they collect and report on results.

The charity leader will probably have individually signed off both an income generation or fundraising strategy and an operations or implementation strategy over the past 12 months. How many of those charity leaders sign off a combined impact and income strategy over the next 12 months will be a key indicator of a change of focus in the charity sector, and those who do, and who engage stakeholders in the creation of that combined strategy, are likely to be the charities which establish or re-establish that sustainable funding model for the next five years and beyond.

We have had no choice but to have effective, and indeed discerning, management in our charity. When you read this you will appreciate that the scale and challenges of what we do, including the need to evaluate the quality and performance of our partners and suppliers, require us to be very good at managing both ourselves and the situations where we work with others.

I founded Hope for Tomorrow in 2003, following the sad loss of my husband David to cancer. During his treatment I had been struck by the difficulties we faced in travelling long distances for chemotherapy, including the terrible frustrations of hospital parking and long waiting times.

I wanted to help people undergoing chemotherapy in a practical way and I decided to approach Dr. Sean Elyan, consultant oncologist and medical director of Gloucestershire Hospitals NHS Foundation Trust, with my ideas.

Shared vision

To my delight I found we had a shared vision: to bring chemotherapy closer to patients. Together we developed a pilot scheme that resulted in the 2007 launch of the world’s first Mobile Chemotherapy Unit (MCU), in a unique partnership with the NHS. Launching the world’s first of anything is no easy task, and this was no exception.

I will always be grateful to Dr. Elyan for his constant support and dedication to Hope for Tomorrow and our vision. His guidance has been invaluable, particularly in relation to our dealings with the NHS.

Today we are the proud owners of ten well equipped, state of the art Mobile chemotherapy units around the country, and our fervent wish is to have at least one unit in every county by 2025.

Hope for Tomorrow builds, owns and maintains the units, which are operated by highly trained NHS staff, who travel through their areas of operation to places where the service is needed most, visiting local Community Hospitals and other easily accessed sites such as supermarket car parks or community centres.

The units allow cancer patients to receive treatment in a restful environment closer to home, saving stressful long distance travel and minimising waiting times. Up to 20 patients per day can be treated on board, and I’m delighted to say that patients report a more sociable, less stressful experience.

Travelling easier

Travelling and parking are easier and less costly and patients can enjoy a cup of tea and a chat on board. We’ve worked hard to make sure that the experience of being treated on board is as pleasant as it can be, and we’ve responded to what patients have told us about what they need.

For instance, we have installed lifts for those unable to use the steps up into the units; there is a private area for nurses or patients needing a moment to themselves, and there are always biscuits on board. The nursing staff appreciate the calm atmosphere of the units and getting to know the patients.

Our first patient to be treated in Somerset said: “Today I felt a little low but after being treated on the bus I felt I could fly again.” Words like this are very special to me and my passionate team.

For our NHS partners, the benefits of increased capacity and flexibility of service are clear: Hope for Tomorrow’s MCUs provide the means for up to 15 per cent of an oncology department’s activity to be completed on board, with the capacity to administer up to 2,000 treatments per year, per unit, saving thousands of miles of travel per year and hours of time.

There were many challenges along the way to launching the first unit. My background, along with my husband, was in motor racing PR and management, not in running a charity, so I had to learn as I went along.

Motor friends

However, my contacts and friends in motor racing have supported me all the way - the late Jack Brabham, along with Sir Stirling Moss and Derek Bell, became the first patrons of the charity and it still enjoys the loyalty and support of many well known figures in the motoring industry.

At our recent "Legends of Le Mans" event at the Hurlingham Club in London, motor racing journalist Simon Taylor interviewed drivers including patrons David Richards, Ross Brawn, five-times race winner Derek Bell and Martin Brundle. We raised over £65,000 for our charity and another charity.

As a charity, we sell nothing; we provide the infrastructure for NHS partners to provide service delivery and our contracts with our NHS partners are renewed on a three-year basis.

Customer categories

Our customers fall into three categories – NHS partners, patients and funders/supporters:

• NHS PARTNERS. Our practices are designed to ensure that we monitor the performance of our NHS partners, following the number and types of treatments administered on board the Mobile Chemotherapy Units.

  The NHS Trusts submit regular reports on MCU activity, and our operational team has two formal review meetings per year per NHS partner in order to establish operational status and address any issues. We run an online forum to encourage information sharing and best practice.

• PATIENTS. Our NHS partners share the information gathered in "friends and family" test data. Medical staff also ask patients to complete patient case study forms which the charity provides. This information enables us to prove need and measure the impact our units make. It also helps provide reassurance to other patients about the service and any improvements that might be needed.

  Research into the principle of administering cancer patient chemotherapy via mobile treatment units was conducted by the West of England University; the results were published in October 2011.

  The research gave evidence of patients’ advantages and benefits when receiving treatment at Mobile Chemotherapy Units as defined from travelling to and from hospital. It was established that the maximum waiting time for patients on the MCU was 15 minutes.

• FUNDERS/SUPPORTERS. We respect our supporters’ privacy and do not share their data with any third party. We mail supporters who have requested it three times a year with our charity newsletter, and on occasion for local events. We do not use street fundraisers, telephone or door-to-door fundraising. We believe that if we treat our supporters with respect they will support the charity over the long term.

Our Mobile Chemotherapy Units cost £260,000 to build and are bespoke, state of the art units. We only start the build once we have the commitment of the NHS Trust partner which requires it and there are stringent criteria for the agreement to supply, including a pre-qualifying assessment, the partner’s need for the service, capability, capacity and commitment.

Board approval

We require from them a board-approved business case as well as details of their background and objectives, their experience and suitability, their ability to deliver and their vision.

Our coach builder for our second generation units was appointed following a tender process which was designed to ensure that our units are fit for purpose for future developments in the field of chemotherapy and other cancer-related treatments. Each unit is maintained by the charity through a supplier which we have worked with for over nine years.

They provide 12 weekly services and ongoing maintenance and repairs. Feedback from existing NHS partners helps us to improve future designs; we see this as an opportunity for a cycle of continuous improvement.

None of this work would have been achieved without the commitment of the team at Hope for Tomorrow, including our core team operating from Gloucestershire, our trustees, our patrons and our ambassadors. When I started the charity I was on my own; now I have a passionate and dedicated group of people around me.

Strong team

As founder and trustee I lead a very strong team headed by two senior managers who lead the operations, communications, fundraising and accounts teams. We are a small organisation; we all work together as a tightly knit team; and in my experience and as quoted in "The Little Blue Book", New Philanthropy Capital, February 2010, the biggest asset for any charity is its staff

We have a strong board of trustees with a wide range of business skills. The board of trustees has signed off a carefully structured national expansion for the charity and is committed to supporting the our targets for extending this very worthwhile project right across the country.

I believe charities are often created out of personal experience and have a desire to cut through obstacles in order to achieve change. At Hope for Tomorrow we have stayed true to the original need that I identified when I went through the experience of supporting my husband through his cancer treatment.

Inner strength

When I started the charity I found an inner strength, which helped me through adversity towards my dream. As the new book “Grit”, launched in May 2016 by award winning psychologist Angela Duckworth, says: people can achieve remarkable things not just by relying on innate natural talent but by practising “the Power of Passion and Perseverance”.

That has helped me enormously and I am proud that our team at Hope for Tomorrow also have these qualities and dedication to the charity.

The charity sector continues to play an important role as both a support system for and champion of important causes across the country, and also as an "employer" of approximately 800,000 workers across the UK. According to the Labour Force Survey, voluntary sector workers equated to around 2.7% of all UK employees in 2012. Additionally, in 2012/13 there were approximately 160,045 voluntary organisations operating in the UK.

Significant concern

The sheer size of the industry (an indeed it is an industry) and its rapid expansion in recent years have sparked some significant concern around issues such as accountability, transparency, programme sustainability and fundraising practices. Increasingly, professionalisation is seen as the best way to address these concerns and guarantee that charities can deliver reliably and responsibly.

While regulators such as the Charities Commission are important when enforcing standards across the industry, charities largely rely on a suite of "best practice" guidelines rather than a set of concrete rules. A number of high profile scandals over the past year have arguably tarnished the image of charities, leading to the overhaul of the self-regulation model.

Membership organisations such as the Royal Air Forces Association find themselves in an interesting position when public opinion changes so drastically. By their very nature they are not only accountable to their supporters and beneficiaries, but they also have an inherent responsibility to reflect the views of their members, the very people who keep the organisation going.

Receiving no government contributions, the work of the RAF Association is completely funded by our members and through donations. It therefore falls on all employees, led by senior management, to connect with the existing membership base, to maintain and also increase membership numbers.

Recognition of dedication

The RAF Association exists in the recognition that RAF personnel and their immediate families dedicate their lives to their country, and to ensure that such a sacrifice does not result in suffering, poverty or loneliness.

With a membership of approximately 62,000, which includes serving RAF personnel, veterans and non-service individuals, and a worldwide branch network of over 500 volunteer welfare caseworkers, the association is able to make over 102,000 welfare visits and calls annually. Support is available to members of the 1.5 million strong RAF family and ranges from providing conversation and friendship to preparing and submitting application forms for financial assistance.

Working closely with other charities, we help secure over £1.8 million in grants each year for those in financial hardship. As the "voice" of the RAF family, we speak out on vital issues such as the importance of the Armed Forces Covenant and the arrangements for widows’ war pensions. We also run year-round activities, such as our new Befriending Service and Storybook Wings, which keep families connected when parents serve overseas, capitalising on the experience, expertise and passion of our members and employees to deliver the best support network for our members.

Identifying and addressing challenges

Over the past year, we have been dedicated to identifying and addressing the challenges that face the association. Ultimately, two overarching issues were recognised as priorities in safeguarding our long term development:

RAISING EXISTING AND POTENTIAL MEMBERS' AWARENESS AND UNDERSTANDING OF THE ASSOCIATION. In 2015 we supported around 14,000 members of the RAF family through our various welfare initiatives. While the Association benefits from having a generous and active membership base, much of the general public are not aware that we are, in fact, a membership organisation, similar to the Royal British Legion.

Having members helps us to identify vulnerable and isolated individuals in our local communities, and through our branch network we are able to reach out to those who need us. While individual donations provide the vast majority of funding for our various initiatives, members sit at the heart of the organisation and everything we do. We simply would not exist without them.

PROVIDING EXTENSIVE TRAINING TO VOLUNTEERS AND MEMBERS. The increased pressure to deliver services to a professional standard is not going to lessen in the near future. The majority of our welfare work is delivered by volunteers, who are mostly members, so we must ensure that they are properly equipped to deal with what are often sensitive issues.

Our caseworkers share our desire to deliver the best service to those in need. When dealing with cases of severe loneliness, social isolation or financial hardship, it is important that we are able to provide the same level of support and advice across our network. This consistency is another benefit of a structured training system.

By implementing a two-pronged approach, we have successfully managed to meet these challenges head-on. Despite external pressures, we have managed to grow our membership by over 600 members over the past year alone. By the end of 2015, all of our volunteer welfare caseworkers had been trained to a nationally recognised standard.

Training volunteers enables delivery

We believe that by training our volunteers in this way we will be able to deliver on our promise to beneficiaries. This allows us to continue to benefit from our exceptional mix of volunteers and permanent employees without compromising on the quality of our programmes. Such a comprehensive and far-reaching training scheme is an important first for the Armed Forces charity sector and we hope to see the standard rolled out across the sector over the next few years.

While the professionalisation of our team is key, attracting members and inviting people to join and support the RAF Association is equally important. We found that approximately 3,000-5,000 people were letting their association membership lapse every year. Such significant lapse rates ultimately negate any progress we might make with membership recruitment and we had to take urgent action to stem this outflow.

Late last year we attempted to contact lapsed members to find out more about why they had let their membership lapse. While 40% of those we contacted renewed their membership immediately, a further 40% needed our help for issues ranging from financial hardship to loneliness and isolation. We have alerted our welfare team to those who need support and I’m pleased to say this is already making an impact.  

Based on the success of this activity, we will be trying to contact the 2,000 lapsed members from 2015 to see if they have any welfare needs or, if appropriate, to encourage them to renew their membership. To date 26% of those contacted have now renewed their membership and where a welfare need was identified, we are helping. This approach requires a lot of investment from the association, while being a time and labour intensive exercise, it reflects the core values and goals of the charity to support members of the RAF family when they are in need.

Next five years

Over the next five years, we will continue to contact lapsed members, addressing welfare needs where we find them, as well as undertaking additional awareness raising activities to grow our membership back to 100,000.We are on a path of growth and expansion as we hope to connect with more members of the RAF family and provide them with the help some of them desperately need.

From an operational perspective, our future will mean more investment in our capacity to deliver services and time to reach out to as many members of the RAF family as we can to encourage them to join the association. We will be building on our work to alleviate loneliness and isolation through our befriending service, reaching out to local communities.

With a family of 1.5 million we have our work cut out for us, but a large part of my role is identifying and contacting the entire RAF family. Through initiatives like befriending and our wider welfare work we are well on our way to achieving this.  

Balancing different needs

As a membership organisation which provides welfare support, we have to carefully balance the needs of both groups, especially as some members may also be beneficiaries. To do my job effectively and for the association to deliver personalised solutions to pressing problems, we all, every employee and volunteer, must appreciate that we have a responsibility to continually listen to members and beneficiaries, and this must act as the driving force behind our activity.