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Charities facing difficult decisions

Adjectives like ‘unprecedented’, ‘challenging’ and ‘catastrophic’ are routinely and appropriately enough being used to describe the times within which we find ourselves.

Early in the pandemic NCVO estimated that the UK charity sector would lose £4.3bn in income. The Government irritated many by belatedly only offering £750m, although charities can also access general measures, such as staff furloughing, and many charities now face difficult decisions about their operations.

Aside from funding challenges we know that the world is never going to look the same again. Globally there is tremendous uncertainty and charities face a plethora of new challenges and questions. Trustees and managers need to think carefully and potentially act with agility to re-align strategies and the associated allocation of resources in order to ensure they serve their beneficiaries as effectively as possible.

I am a big fan of the MacMillan Matrix - a portfolio analysis tool specifically developed to help not-for-profit organisations discover the services or activities that are most needed in its community/beneficiary group(s) and that it is in the best position to provide, based on the following assumptions:

o Charities should avoid duplicating services to ensure that limited resources are used effectively and quality of service is maximised.

o Charities should focus on a limited number of high-quality services, instead of providing many mediocre services.

o Charities should collaborate so that a continuum of service can be provided with each partner focusing on specific pieces.

It helps organisations think about some very pragmatic questions:

o Are we the best organisation to provide this service?

o Is competition between providers good for our clients/beneficiaries?

o Are we spreading ourselves too thin, without the capacity to sustain ourselves?

o Should we work co-operatively with another organisation to provide services?

The model looks at each of the organisation’s programmes or services according to three criteria:

1. The charity’s competitive position with regard to the programme (measured as strong or weak). Do you have the resources, skills, advantages of location or other specific advantages that make your charity the best, or potential best, to provide this activity or service?

2. The attractiveness of the programme to the charity (measured as high or low). To what extent do you want to undertake this work, based on its fit to your mission, its potential for attracting resources or boosting partnership working?

3. The extent of alternative coverage, that is similar services offered by other organisations (measured as high or low) – critical to charities who will not wish to abandon people or communities that particularly need this service.

Planning in the face of reduced finances is rarely ideal – the choices are not binary, and sometimes charities must often take what they see as the least-worst option, in which case objective analysis is important.

However, the pandemic and associated societal changes make it vital for charities to analyse whether all of their programmes now meet the needs of communities even if finance is not the driving factor.

If your charity is working through these issues and needs external assistance I’d love to help!

This is a summary of my article published in the June edition of Charity Finance:


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