Small charities need to communicate key messages to survive in a competitive market
Originally published: August 2017
From funding cuts and political uncertainty to a rise in demand for services, small charities face tough challenges in delivering their work. To survive in the current climate, a nonprofit needs to know what sets it apart from other organizations and communicate this to its target audiences. It's about knowing your unique selling point (USP).
In 2016, U.K. charity Charities Aid Foundation (CAF) and U.K.-based membership organization the Association of Chief Executives of Voluntary Organisations (ACEVO) carried out a survey among 400 nonprofit chief executives asking them about the issues they're facing. Four out of five senior leaders said they’ve seen increasing demand for services due to statutory cuts. Furthermore, one in five reported they were struggling to survive and three in five said they were having to restructure their organization or change their working model.
Steph Taylor, senior advisory manager at CAF, says lots of small charities traditionally relied on grants from local authorities but these have been cut in recent years. "There are fewer funding streams available for small charities. And those that are available rarely account for business development time or recognize the effort it takes for small organizations to prepare for and win future funding, let alone to ensure effective governance, strategy and measurement of their impact.”
Know your USP
To tackle the funding shortfall, CAF is working with small nonprofits to help them understand, develop and set their organizational goals so they can communicate these effectively to donors.
“One way to survive is to demonstrate that you fill a niche, and clearly show the impact you’re having on beneficiaries. Charities need to focus on the things they do well and continually review this. When there is limited funding to go around, this messaging is so important," explains Taylor.
CAF works with individual charities to make sure they have a clearly defined vision, mission and goals and that these are embedded into the organization. This often involves reviewing where the organization is now, competitors in the market, what funding they can access, how the charity fits into the surrounding landscape and any gaps it can fill to meet beneficiary needs.
The charity then has time to reflect on these discussions to make sure they are firmly behind their vision and confident in promoting it. Once the organization is ready to move forward, CAF works with them to put together an action plan and organize follow up activities.
CAF generally charges nonprofits for this service — the cost is dependent on the size and complexity of the project. CAF, however, recognizes that many charities are not in a position to invest in their own long-term sustainability and works with funders and partners to provide free support where possible. For example, through the CAF Resilience program which strengthens the long-term organizational health of charities.
Working with everyone
There’s no doubting the importance of having good communications colleagues to shout about your USP once you’re clear on it. But some small charities don't have any communications resource at all due to lack of budget. In these cases, CAF will work with a charity to find expertise elsewhere, such as through the trustee board, a pro bono consultant or experts who will give their time for free.
But developing and selling your vision is not just down to the communications team, it's the responsibility of all staff.
Taylor says: “We tend to work with an organization on its strategy, governance, income diversification and long-term resilience — as this is all heavily interlinked to a charity’s articulation of its vision. For example, if you're helping a charity to move from one income source to a more sustainable set of income streams, it's important to look at what that income allows them to do and how they’re communicating this.”
She adds that good communications has to reflect what is happening in the organization. “Where we see issues is when there is a disconnect between how a funding bid, for example, talks about what the charity does, and the charity's strategic plan and reason for existing. That can cause governance issues and make the organization subject to risk.”
To make sure the charity’s different teams are joined up in their approach, CAF works closely with trustee boards to set the charity’s mission, vision and values, and develop the organizational strategy — including how they're promoting the organization and using their own networks.
A voice across the sector
It’s not just about working with individual charities to help them develop their USP, it's also about the wider U.K. charity sector coming together to promote the importance of small charities and the role they play in society. CAF is working closely with sector bodies — including ACEVO and the National Council of Voluntary Organisations — to communicate these messages through joint policy work.
Taylor says with increasing demand for services, charities are playing a bigger role in the community with less budget and fewer resources. "It's about showing donors that there is a big gap not being met. Some of that is an education piece around the huge role that charities are playing in keeping things together in the current political uncertainty. We can only achieve this and make inroads by working together as a sector."
Working with donors
On the flip side, CAF is also working closely with donors (major donors who give through CAF and corporate businesses) to encourage them to offer flexible funding to charities. Traditionally donors have tended to offer non flexible funding that can only be used for project costs or with a view to being used in a particular way.
Taylor says that flexible funding will allow small charities to use the money in the way they see best for their beneficiaries. "A CEO working for a small charity will be answering the telephone, dealing with plumbing issues and supporting beneficiaries as well as doing the strategic thinking around how they best structure their organization. They need the headspace and time to weigh up the options," she explains. "We're trying to increase flexible funding opportunities to build the resilience of the sector over the long term."