Tough times ahead for charities?
One need only take a cursory glance at the current news to see that charities are under significant pressure.
Recent reports suggest that the cost-of-living crisis is having a significant effect on the ability of charities to make enough money to offset their costs.
Around 57% of charity executives say they have sold assets (like property) to generate extra income and around half (49%) have had to cut back on their services despite demand increasing.
In short, it’s a tough time for charities and the future seems increasingly bleak.
So, what can you do to ensure your charity continues to provide its valuable service while remaining financially viable?
How to cut costs
There are numerous methods of cost-cutting and expense management that we advise to our clients, but these are the main starting points.
Review and renegotiate your current contracts: Start by examining your current contracts and agreements. This includes everything from utilities to services and supplies. Remember that, often, providers are willing to renegotiate terms to retain your business. Look for competitive quotes and don’t hesitate to switch providers if it means significant savings. Remember, every penny saved is a penny that can be put towards your charitable activities.
Increase volunteer engagement: Volunteers are the backbone of most charities. Engaging more volunteers can help reduce labour costs without compromising the quality of your services. Invest time in volunteer training and retention strategies. A well-trained, committed volunteer base can significantly reduce your reliance on paid staff for certain roles.
Streamline your operations: Look critically at your operations to identify areas where you can streamline processes to save money. This might mean merging roles, reducing paperwork, or cutting down on non-essential activities. Efficiency is key in tough times, and simplifying operations can lead to substantial cost savings.
Collaborate with others: Collaboration with other charities or community organisations can lead to shared savings. Consider joint purchasing to get better deals on everything from office supplies to insurance. Sharing premises or administrative functions can also reduce costs significantly. Collaboration extends to sharing best practices and learning from each other’s experiences in cost management.
Focus on your core activities: Review your charity’s activities and focus your resources on the core services that align most closely with your mission. This might mean temporarily pausing or permanently discontinuing less critical projects. By concentrating on what you do best, you can ensure that limited resources are used most effectively.
A note on alternative funding sources
If you are struggling for financial sustainability, exploring alternative funding sources can minimise your charity’s dependence on traditional income streams.
Grants from Government bodies, local councils, and private foundations often provide essential funding for specific projects or operational costs.
Detailed research and tailored applications are key to success in this competitive area.
Moreover, the landscape of grants is continually evolving, so staying informed about new opportunities and deadlines is also highly important.
Crowdfunding campaigns represent another great avenue for raising funds.
By leveraging the power of social media and dedicated crowdfunding platforms, charities can tap into a broader audience willing to support specific causes or projects.
These campaigns offer the dual benefit of raising funds and increasing awareness of your charity's work.
Developing income-generating activities that align with your charity's mission can also provide a steady revenue stream while reinforcing your organisation's values and goals.
This could range from selling products created by those you support to offering paid services that utilise your charity's expertise.
Engaging your community in these activities not only bolsters your finances but also strengthens the bond between your charity and its supporters.
Corporate sponsorships, where businesses support your charity in exchange for recognition or shared value initiatives, can further augment your funding mix, providing both financial support and potential access to new audiences.