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Are you lighting fires or counting the biscuits?
A survey published in Insolvency News this week reported that 46% of charities have ‘slashed activities to stay afloat after the recent public sector spending cuts’.
“It’s no surprise that people are trimming costs and commitments to stay afloat. But how many are also being proactive in seeking new sources of income?” asks social entrepreneur Robert Ashton, who is also a Parliamentary advisor on social enterprise issues.
“For some organisations merger can be a sensible and financially sound proposition,” said Mr Ashton, who is also a best-selling business author.
The charity No Smoking Day (NSD) announced today that they would be merging with the British Heart Foundation (BHF) which is one of Britain’s largest charities.
“I applaud the more by NSD,” said Mr Ashton. “They have secured a new source of funding, they will still be continuing their vital work and they are able to add value to the BHF.”
Mr Ashton went on to say that to ensure their services survive not-for-profit organisations will have to be prepared to take risks: something my charity trustees will find difficult.
He used the metaphor of a mythical charity being marooned on a desert island.
“The management team and trustees find themselves suddenly alone. The supply ship has sailed away over the horizon. They’ve left you some ship’s biscuits and you’ve found fresh water so you won’t starve. But what about the longer term; how will you manage? The debate on the beach is tense and emotional.
“In my experience, many trustees would devote themselves to counting and rationing the biscuits.
“The problem with this approach is that although you manage to eke out your reserves for several months, you are totally reliant on a new shop coming over the horizon. Right now there are very few new funding ships and fewer still have resources.
“But for the risk averse, governance focused and often detail obsessed trustee board the alternative approach is way too daunting. Yet for those willing to light a fire to attract attention, then set out stalls on the beach to trade with whoever the smoke attracts there is a future.
“Yes, you have to put a value and price on the services you offer. Yes, you have to promote them and provide them to a wider audience than before, especially to those able and willing to pay. But then you’re in control. With the money you earn you can buy new tools, create a new sleeker ship and set your own course into the future.
“It’s true that pirates might also see your smoke and take you over, but the risk of that is actually very small. The fact is that if all you do is count the biscuits, you will eventually run out and starve. Becoming more commercial, taking some modest risks and worrying a little less about the rulebook is the only way most will stay afloat. Can I lend anyone a box of matches?” he said.
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