The current economic and social environment, together with increased scrutiny and media attention, means that charities are finding it ever more difficult to sustain themselves. This may manifest itself as experiencing difficulties in achieving their purposes as a body, perhaps not functioning effectively or even, at worst, resulting in financial collapse.
It is not unusual for charities and other ‘not for profit’ organisations to be governed by trustees who struggle to discharge their responsibilities fully and in a timely manner. Sometimes characterized as ‘worthy amateurs’, they are unpaid volunteers trying to fit their duties into busy lives and are often unaware of the full extent of their obligations. If they get it wrong they can face disqualification as well as financial liability. Remember Kids Co?
At times the CEOs leading their organisations are overworked, unsupported and with limited experience of the financial stresses being felt across the sector as fundraising becomes ever more challenging. It can be an isolated role acting as a CEO of a charity with, in some cases, a real need for expert mentoring on strategic and commercial challenges which may be beyond the CEO’s particular skill set or at least outside their comfort zone. This can present opportunities to turnaround sector specialists who are able to give robust advice and perhaps assist with merger options or scaling back operations to focus on more viable offerings. Sometimes the only sensible route is winding down perhaps through an insolvency process.
The nature of the sector means that there are multiple regulators, funders and other stakeholders with particular requirements. Straight-forward commercial options may not always be the right choice given profit is not the primary objective, although financial discipline is, of course, required. R3 is focusing on this sector and ran a highly regarded session at its main annual conference recently, which I had the privilege of chairing. If you are interested in understanding more about the difficulties facing this sector and the challenges faced in turning around an ailing charity, specialist courses are being run by R3 in London and Manchester this Autumn with sector leading presenters.
Charles Turner may be contacted at email@example.com