The Charity Excellence Framework (CEF) platform enables any UK based non-profit to increase its impact and financial resources, but is very quick and simple to use. Demo video (4 mins). Everything is free.
The other toolkits below, can be downloaded from the CEF Home Page.
Responding To The Crisis
● Organisational response plan.
● COVID19 Funder List, 250+, with links to other lists: 1000+ in total.
● Building resilience & creating a fundraising recovery plan. Video Version.
● Financial sustainability assessment and action plan.
● Cash Position - the most critical issue for many will be cash flow. Assess your current cash position - how much cash do you have at the bank, any easily near cash assets that could be converted to cash, availability of an overdraft facility.
● In light of the market falls, don't liquidate any equities in haste. That could be a potentially very expensive option at the moment.
● Expenditure - next consider any increased costs due to the crisis and any scope to delay non-essential expenditure.
● Don't forget that many funders have agreed to be very flexible around grants, including some making advance payments.
● There is also help from Government in terms of salaries and delayed VAT payments for some. You can find comprehensive charity guidance on all the initiatives on the Charity Tax Group Coronavirus hub.
● Income - then look at income. Delayed events, closed retail shops and delays in grant bids being processed, or contract income being paid.
● Download the COVID19 Funder List from the website to find funders.
● Forecasting - bring the above together into a cash forecast.
● Resist pressure from finance to create detailed projections, unless you have the skills and capacity to do so, and senior management/trustees for certainty, except on any issues where you can be certain.
● Everyone is incredibly hard pressed, the situation highly uncertain and time is tight. Even if you did create a detailed forecast it may take time, might be out of date very soon and, potentially, of limited value anyway. Complicated models, may be very accurate, but not necessarily meaningful.
● But, you do need to assess the issues in order to take the best possible action in response. I usually create something quick and simple that can easily be updated, which focusses on the most critical factors.
● Action Plan - use your forecast to create an action plan.
● It can be useful to convert your cash position into how many weeks/months of current cash you have to fund operations. Not to work out when you're going to go bankrupt, but to help with planning timelines for your recovery.
● It can also be helpful to create best/most likely/worst case assessments and/or;
● Contingency plan options, in case these may be needed.
● Concerns - I assume that regulatory authorities will be sympathetic, but, if you do not have a reasonable expectation of being able to pay your bills, as these fall due, advise the Board.
● I'm not an accountant, so cannot give professional advise - seek this if you need it. In law, there are potentially serious personal risks to trustees who continue to 'wrongfully trade', whilst insolvent.
● I always believe that being honest with people is best, but be mindful around the impact of language. Discussing worst case scenarios, cost reduction, contingency planning and solvency tests can really scare people, particularly if they only have partial information and take it out of context.
● Keep the messages, honest, in context and understandable for everyone. And care for yourself. Here's a CEF resource with 12 ideas to help you maintain your resilience.
● But Be Positive. We have fantastic people - you're one of them. Don't sell yourself short.
● When I created COVID19 funder list mid-March, it had 7 entries, but within 2 weeks there were links to 700+.
● And our funders are flexing deadlines and deliverables, making advance grant payments and, I suspect, looking to source more funding.
● There are lots of fantastic people working flat out to mobilise support for us.
Next Steps & Resources
● Managing Cost. This Charity Excellence resource includes 30+ ways to reduce cost, without cutting into core activities.
● Business Rates. Most of us have at least 80% mandatory relief anyway, but some good news in the budget for charity retail, museums, galleries and sports organisations - business rates have been suspended for this year.
● Other Tax Reliefs. Each year we fail to claim £600m in Gift Aid and that's only one tax relief. There are different types of Gift Aid, lots of other tax reliefs and you can claim up to 4 years retrospectively. Click either link above to find out what these are and how to claim them.
● Investments. If you're lucky enough to have investments, consider the potential risks of the recent market falls becoming protracted.
● Risk - the sector is already hard pressed and, potentially, the coronavirus could trigger a recession.
● Warning indicators to think about - income streams are uncertain, or may be substantially impacted by coronavirus, limited cash at bank and few assets that can easily be liquidated, heavy dependence on a single income stream that may be at risk, multi-year funding due to end soon, with no replacement funding yet in place, spending restricted income on core costs or unplanned spending of reserves, free reserves well below target, or no free reserves.
● Action To Take - Toolkits 6 and 7 will give you everything you need to begin to build your resilience, assess your financial sustainability and create your fundraising recovery plan. Download them here.
If you thought this was useful, why not register with the Charity Excellence Framework? It has the largest resource base in the UK charity sector and everything is free.
This resource has been produced by the Charity Excellence Framework for everyone. It may be used or shared, but not for commercial purposes. I am happy for my work to be reproduced by others, with my prior written permission and appropriate recognition for the Charity Excellence Framework.