Trustees and Sustainable Funding – friend or foe?

When I was a child I remember having a book of poetry about school; you opened the book from one side to see poems from the point of view of the girls and turned the book over to jump over the wall to the other side of the playground for the point of view of boys. Sometimes I think some organisations could write a manual in the same way – staff and trustees with a virtual brick wall between them. In particular, some sustainable funding problems I see again and again:

1. Trustees not understanding how to set financial goals

How often are Chief Executives or fundraisers handed financial goals that seem to have been pulled out of thin air? Or goals that are set by the budget – ‘we need X amount to do the things we want to next year, so that’s the income target’.
Why is this unhelpful? Mostly because there is no consideration of whether this amount is possible, but also there has been no consideration of what *types* of things it might be possible to find funding for. I often encounter this problem with organisations who can’t work out how to fund their ‘work’ as a whole without breaking everything down to neat grant-funded projects, leaving them lurching from one grant to another and massively underinvesting in overheads. And if traditional funding for existing activities has dried up, either new sources will need to be found or the activities changed – both actions need to be taken in close collaboration with trustees.

2. Trustees are often (apparently) extremely risk averse

Every organisation will have a different attitude to risk, but often it is fear of the unknown that stops trustee boards from investing in new types of income. I have heard trustees say ‘we just need to make more grant applications!’ when faced with a shortfall, when the chance of these applications being successful is much less than if the organisation invested in a trading opportunity or increasing the number of donors. Aligned to this, often action isn’t taken until much too late, as the ‘safest’ option has been seen as continuing to walk the well-trodden path. By the time this path has failed, the likelihood is that the organisation will struggle to get new initiatives off the ground in time (which thereby validates the initial assumption that the new ideas won’t work…)

3. Impact and mission getting lost in the panic of finding the next pot of money

Sometimes trustee boards come to see their overriding goal as keeping the organisation going financially, and lose sight of whether or not this is the best course of action – particularly if the work they can easily find funding for is not the direction the organisation ideally wishes to be going. This is often a hidden issue – very few organisations realise this is what has happened until they closely examine whether they are able to demonstrate the impact of their work and whether it is best responding to need.

So, all a problem with trustees? Let’s flip the book over:

If trustees don’t understand how to set financial goals, then it is probably because they haven’t been provided with the right information about what might be possible. Risk averse trustees? This is a sensible course of action if the risks are unknown. Senior managers ought to be shining as much light on the causes and influences on risk as possible – including analysing the risk of doing nothing. How often do your trustees get information about the risks behind your pipeline of income? Once a year? Hidden in a big report?

And finally, impact and mission. I firmly believe this is usually a resource issue – if organisations don’t prioritise resourcing impact measurement and strategic development then funding, or lack thereof, is the bully of all motivators and will take over. If allowed it will overshadow every minute of every day and sap the life from otherwise brilliant organisations. It is one of the continual challenges of the sustainable funding approach to give organisations the tools and clarity to see where they would like to go. It is why we work so closely with our NCVO colleagues specialising in strategy, impact and governance. It is also why we’ve developed, in collaboration with them, the Trustees Role in Sustainable Funding short-course – next scheduled for 20th May here at NCVO. You also might find our Sustainable Sun Tool helpful to begin to facilitate conversations between trustees and staff. Ask different people to fill it out on their own and see where the responses differ – and there are the areas you need to work on.

Download: Sun Tool (PDF)
Sund Tool for A4 printing (PDF)

Book a place on Trustees role in Sustainable Funding 20th May 2013

About the author: Ros Jenkins is an NCVO Consultant specialising in Sustainable Funding. More information about NCVO consultancy.