Welcome to the new financial year. Have you dusted off your crystal ball?

So, here we are. April 2015. A new financial year, a month away from the most uncertain general election in a very long time (if not ever) and meanwhile, back at the cliff face, many charities and voluntary organisations have probably just set budgets that are based to a very large part on total guesswork.

Sound familiar?

So, to welcome in the new year here are four questions to help you to make the future a little more predictable. Or at least, take back some control.

Have you challenged every assumption? (Really?)

You’ve tried something before and it didn’t work? Did you really ask yourself, why? Some organisations have completely bucked trends. Look at this chart:

Does it show that if you are an arts organisation you shouldn’t be pursuing donations from individuals? Clearly not – some of the largest single donations have been to arts and culture organisations. However, you might not want spend a lot of money leafleting every house in your area. On the other hand, some of the most stable voluntary sector organisations around are school PTAs, who raise almost all their income from donations – you’d never guess that from the chart above. Of all the organisations I’ve worked with, the biggest risk to planning income is not the unknown, it’s mistaken assumptions. Do you have someone who can take the role of looking at things afresh and challenging assumptions? If not, where can you find someone? If you have developed your funding strategy internally, maybe within a small team or just by one individual, the chances are this external-challenge role is critical.

Keep a finger in every pie, even if the benefit is unclear right now

A very successful fundraiser once said to me that she always followed up on every lead, regardless of whether she thought it would result in money. She never assumed that anyone wouldn’t be useful and she never devalued any potential supporter because they were unlikely to write a cheque today. Now, clearly time and resource is a big consideration here, but keeping an open mind and keeping in touch – meaningfully in touch – with lots of different types of people is likely to lead to lots of different types of opportunities and ultimately diversify your income. Perhaps it will lead to chances to work in partnership, introductions to academics who can provide evidence of your impact, mentions in articles that increase your profile.​

From deficit to surplus?

Our P4 practical workshop at Evolve 2015 will teach you how to turn around your organisation’s funding and finance.

Find out more about Evolve 2015

At the very least take a look at your marketing and communications and make sure interested people can understand what you’re doing and get in touch (quick plug – The Art Of Raising Money by Professor Ian Bruce is a lovely clear look at how you use marketing to raise more money). Perhaps volunteers, trustees and your wider staff group could help to spread the load – if they are all engaged with what you do and your marketing supports them, they’ll have no problem talking to others about you. Networking doesn’t just happen – you need to make it possible.

Make the most of emerging opportunities

Here’s a four step process to make sure you’re ready.

1. Think of how you identify new opportunities

Some organisations have a crowd-sourced approach to innovation, with clear ways staff and supporters can submit ideas. Sometimes the best ideas can come from unexpected sources – don’t assume it will only be your fundraisers who will see the opportunity. How can you free-up some headspace for thinking and do you value that time enough to protect it? When you’ve got your nose to the grindstone it is very hard to notice what’s up ahead.

3. Decide the criteria for assessing whether a suggestion might be worth pursuing and get buy-in for this process

This will be different for every organisation, but might include contribution to your mission, potential value and the opportunity cost of not pursuing it.

4. At least one part of this decision making process should be risk-assessment

This should  include:

  • financial risk
  • risk to reputation
  • risk to your other services and activities.

5. How do you make the decision and find the resource?

For many opportunities this will need to be very streamlined and quick. Can you put a system in place to fast-track authorisation? If you have buy-in for the criteria of how to assess them, making decisions quickly becomes much easier.

Plan to pivot

I volunteer with a group setting up a free school. As part of the application process, we were asked to look at different budget scenarios. What would we do if we received 10% less income than we’d budgeted for? What about 30%? At what point would we start losing staff? How could we continue to deliver excellent education, based on our vision, to the children under these circumstances? What would we cut first and what was critical to our vision?

For schools, income is based on the number of children in a class – so decisions need to be made early, even if it is possible more children may join later. It seems such an easy and relevant activity for charities and voluntary sector organisations looking at budgets and income strategies.

So, what are your pivot strategies? When will alarm bells start ringing, and what action will you take then? Are there ‘tipping points’ whereby shortfalls begin to have knock-on effects on other areas of your work? And, most importantly, are there things you can plan to do now that will mitigate the impact of any shortfalls. So, for the school, we built partnerships from whom we could second staff as and when needed during the first few years of opening to increase the contingency in the budget. What could you do?

Do you have any other top tips to deal with the unpredictable future?

Please feel free to leave a comment below.

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Rosaline Jenkins Ros is NCVO's lead in Sustainable Funding, promoting a more sustainable, suitable and strategic approach to generating income of all kinds - donations, grants, contracts and trading. @RosJTweets

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