A time for more change? Allowing charities to be fit for the future

Despite being under enormous financial pressure recently, charities have been remarkably successful in maintaining and improving their work to meet their charitable objectives but many are now reaching a tipping point. The pressures that have been building are not going away and can be summed up in a number of themes:

Increasing demand for services

Time and again the sector has innovated and stepped in to provide where public services has reduced provision. Coupled with increased demand, charities are now also providing an ever wider range of services as they respond to the growing needs of the individuals who require them. This diversity of service provision has resulted in the duplication of processes within, and indeed between many organisations.

Public sector funding is reducing

Grants from across the public sector are becoming scarcer.  Those bodies that continue to fund charities are rightly looking for evidence of the impact and outcome of the work, making access to the funds more competitive.  Many charities rely on public sector contracts.  Many of these contracts are becoming more onerous to comply with and have a greater focus on demonstrating a reduction in costs.  

Increasing pressure on donors

The sector has seen a squeeze both on donations from individuals and the public,  and corporate sector and donor organisations.  This reduction in donations to many charities has been compounded with the increased expectations from donors.  How can they be sure their donation is being put to best use and having the most impact?

There are solutions to these challenges, although a long term, strategic approach is needed to provide them.   Some charities are aware of the need for a step change in the way they work and  have moved early to establish ambitious change programmes.

There are two main drivers behind successful change programmes in response to the challenges:

  1. Reviewing the overall charity business model/strategy

    Charities often have only a limited analysis of the impact of the services they provide but are increasingly recognising the importance of measuring the impact of their interventions. Given the pressures from donors, there is a growing need for charities to clearly define who they serve now and who they will support in the future.  Only once a charity understands the impact of its existing services and who it seeks to support, can it reshape its services, organisation and staff accordingly. 
  2. Transforming the underlying charity operating model 

    Most charities have grown organically over many years and have evolved to their current ways of working rather than by design.  Many have become over complex and operate with fragmented and duplicated processes and poor IT systems and data.  With a clear business model and strategy in place,  the way charities work (their ‘operating models’) can then also be reshaped to support the delivery of these new ways of working. These new ways could include changing the way services are accessed or navigated, simplifying and standardising support functions or driving better value from supply chains.

    Taking this strategic, long term view can enable charities to develop programmes which reshape their organisations, introducing new ways of working, using technology more effectively and freeing up staff capacity to focus on the delivery of what counts - the charitable objectives.
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