28th October, 2011
The eight scariest charity horrors
As we approach the witching hour on Halloween be aware of the nightmares that await if your non-profit organisation commits any of these horrors:
1. Mission drift
You need to diversify income, you secure a contract, and another; maybe you don’t quite have the capacity and infrastructure to be able to cope, but you’ll manage somehow won’t you? Before you know it you wake up, drenched in sweat struggling to remember what it is your charity is trying to achieve.
How scary can it get? In theory trustees can be held personally liable for any losses that arise from acting outside of your objects. Look very carefully at why your organisation was set up in the first place. Are your charitable objects as relevant today as the day they were when written? If not, changing your governing document may be required (you may be eligible for pro-bono legal advice through LawWorks).
2. No clear plan on how overheads are funded
This is one of the quickest ways to find yourself in the ghastly situation of insolvency. Do your accounts report a surplus on restricted funds and a deficit on unrestricted funds? If the answer is yes, you need to find a way to fund your overheads before it all comes crashing in on you. In this case there are three options available to you (a combination of all three may be required if your situation is truly frightful):
- Increase unrestricted income (through donations, events or earned income).
- Adopt a full-cost recovery approach to your grants and contracts, where the price reflects the full cost of delivery. Acevo have a great toolkit to help you identify your true costs.
- Reduce your overheads.
3. Failing to determine and meet the needs of your beneficiaries
You know there’s a shocking problem (e.g. nowhere for young people to go, child exploitation, cancer). You’ve done some research and found the statistics that evidence this (a problem statement). Someone has a great idea for a project to solve the problem. It sounds great, it’s innovative and unique – you should go for it, right? Oh-so-wrong!
You must find out if your project idea is likely to help solve the problem, otherwise you may fail to make any difference. You need evidence that your project will meet the need (a statement of need). Consultations with beneficiaries, talking to experts and running pilots will all help to determine this. Remembering this distinction between a problem statement and a statement of need will also help when making grant applications.
4. No clear line of sight between organisational strategy and individual work plans
If there’s no clear path between your overall strategic plan, your team operational plans and individual employee objectives then your strategy is a shocker and not worth the paper it’s written on.
At the very least, start every planning session – whether for team or individual objectives – with a reminder of what the organisation is aiming to achieve and check that the agreed objectives will help to meet these goals. Better still, have a document (or an Excel spreadsheet, which will enable you to apply filters) that maps out responsible parties and timescales, for each year of your strategy’s duration.
I have a solution that may put an end to your planning horrors, through a partnership with WePlanWell, an online tool that simplifies the building, management and reporting of strategic plans. What I find most impressive is the effortless way the tool maps objectives and key performance indicators from vision right down to individual work-plans; progress at every level can be reported at the click of a mouse.
5. No board level reporting of whether your project makes a difference
When monitoring and evaluation is something you do just to satisfy funders you’re heading down a dark alley of doom. Many charities struggle to identify and monitor outcomes. What’s more scary for me is the organisations who have developed good monitoring systems and then fail to use these to evaluate whether they are making a difference and as a tool for self-improvement. Board meetings can be dull but the agenda item that all trustees should look forward to is the impact report.
6. Board undermining the Chief Executive by getting involved in operational decisions
When Trustees are not confident of their responsibilities it can be tempting to spend time in meetings debating where to advertise a project or what type of printer to buy. Keep this ghastly activity out of your board room. Decisions such as this must be delegated to the staff team, led by the Chief Executive.
7. Putting staff jobs ahead of needs of beneficiaries
Many charities are facing the grizzly reality of huge cuts in funding. This can necessitate some agonising decisions. No one wants to delete posts and make staff redundant. In this regard, however, your duty is to your beneficiaries not keeping staff jobs. Decisions must be based on how you can effectively deliver your charitable objects with the funding available (and then how you can work towards sustainability).
A word of caution when facing these decisions: unless you have significant reserves and a plan to balance income and expenditure in the future, you can’t do the same with less money.
8. Failing to deal with bad behaviour or poor performance
This can be a beast of a problem for most managers. The worst thing you can do is ignore the problem and then plot a way to vanquish the monster.
Frankly I’m running out of metaphors but here’s a nice article on how you can tackle poor performance. As for bad behaviour (e.g. bullying and intimidation) immediate action is required as directed by your disciplinary and grievance policy (you have one of those right?). Acas have a great factsheet on how to manage discipline and grievances at work.
One final metaphor and I’m done for a year … don’t be scared, get in touch if you want to talk about how I can help you to overcome any of these nightmare situations (okay that was two).