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Posted by Sarah Brown on 10 Feb '21

Do you want to be more successful?

It could be that your structure is holding back your growth as a charity or social enterprise. Have you thought about what impact what you are and how you operate is having on your success?

It could be that your structure is holding back your growth as a charity or social enterprise. Have you thought about what impact what you are and how you operate is having on your success?

It's useful to consider the legal and operational issues separately. Even if you rely on volunteers, both are relevant.

Why have a separate legal body?

Most voluntary groups start informally getting together to address a need. But as a group of individuals, you are all liable if something goes wrong.

Suppose you want to get any financial support. In that case, you will also need, at least, to have a constitution and some formal roles if you are to get any grants and open a bank account. However, lots of funders will want you to have a legal status, so you limit your funding opportunities without it. As a social enterprise, this is, even more, the case.

You can find lots about different legal status types across our website (use the search function). For example, I recently wrote about how the CIO structure might have advantages for some charities that currently operate as a company limited by guarantee with charitable status.

The importance of structure in how you do things

I've never met a charity or social enterprise with spare resources, or which wouldn't like more people. But from the person working on their own to the organisation with thousands of staff, some key elements will increase your success:

1. Be clear about what you want to achieve each time you do something and have an overall goal for the organisation. Everyone can then use their initiative if they come across an opportunity. Is the opportunity taking us closer to our destination? They can decide how to respond.

For example, I never set up a meeting without knowing why I am having it - how it will progress me towards the bigger goal.

2. Have values that translate into how everyone behaves in the organisation and that are consistently applied.

For example, if an organisation has "our users come first" as a top value, users needs don't get discarded even if there is an opportunity to make some much-needed income. Because of the value, the question is asked: "how can we meet our users needs while getting this income?"

3. Have a structure, so it is clear who does what and splits the roles into strategic and practical functions/roles and responsibilities. Don't have everybody getting involved in everything as it leads to confusion, frustration and duplication, and potentially some things being overlooked because no one is specifically responsible. In a small organisation, particularly one run by volunteers, people may undertake both types of position. Still, they need to be clear at all times what role they are playing and what it involves.

For example, a committee member or trustee may develop the organisation's approved policy about why you might remove someone from the organisation's Facebook group. However, if they then take on the functional role of admin for the group, they need to implement the strategy but can't, serving in that role, decide the approach is wrong without going back to the strategic body to review the policy.

4. Have a flexible structure that reflects what you need as an organisation. Not everything has to be done by the management committee, board or management. Short term working parties or sub-committees focusing on a long term priority can involve people with particular expertise who may not be interested in the organisation's general running or want the responsibility of being a trustee.

For example, I have advised many charities to set up a separate 'strategic' body independent from their board, including key influencers and stakeholders from their sector. These are people who do not want to be involved in the charity's day-to-day running but can offer valuable insights and are useful contacts.

5. Delegate effectively from the strategic bit of the organisation to the doing bit of the organisation. If this is done well, it empowers people by giving them practical support and means more people can get involved if needed. The best way to do this is to have checklists or method statements that provide the steps to follow for a task and reflect the organisation's policies and governance. The introduction of checklists has saved thousands of lives in health care. They are particularly valuable where volunteers are involved who may only do a role infrequently. The trustees, directors or management committee who are legally responsible for the organisation are also protected.

For example, covid risk assessments are critical at the moment. A checklist on how to do one will protect the organisation and make life easier for anyone having to do one for the first time.

Setting up structures and the supporting systems takes time and effort. Still, it is critical for any charity or social enterprise to maximise their impact and change the world. It is also the only way for a registered charity to effectively implement the Charity Governance Code. NB if you have been working on this it has been updated in 2020 and expanded particularly in the integrity and diversity sections.

Find out more:

Income and legal structures

Social Enterprise and Charity Launch Plan

Community Interest Companies

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Tags: charity socent strategy