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Posted by Sarah Brown on 29 Jul '20
Strategic thinking for charities and social enterprises in the Pandemic
I think the Pandemic has created two different sorts of reaction, act or wait. Either "we need to act fast" or "how can we tell what to do, we need to wait to see what the advice is and the longer-term plan".
Both responses make sense, but it is clear that the Pandemic is likely to be around for some time to come, so now is the time to do some more strategic thinking.
Your mission and theory of change
I'd argue that the first thing to think about is: Does the Pandemic impact your purpose as a charity? I suspect it won't, but what it will affect is your theory of change, i.e. what you do to achieve your mission, particularly if you work face to face or use volunteers.
When changing how you operate, you need to decide if this is a temporary fix or permanent. For example, the current high profile decision that many organisations are considering is office space. Do you need it? When will you expect people to return? What are the pros and cons? If you have a building, what else can you do with it if people continue to work from home? If you own a building that you think you might now sell, the stamp duty holiday should make it easier.
Your resources
Review the assumptions you made in planning for this year, particularly your budget and resource planning. You are likely to need to make changes, and this review should help you prioritise what you need to do.
Reducing your workforce is inevitably going to be a consideration as most charities are struggling for income. The news is already full of stories. From Cancer Research, the UK's largest charity is planning to cut a quarter of staff as is Comic Relief to help save more than £5 million in running costs.
If you have skilled and experienced staff, they are a precious resource. Estimates are that the costs of replacing employees are:
- For entry-level employees - between 30% & 50% of their annual salary
- For mid-level employees - upwards of 150% of their annual salary
- For high-level or highly specialised employees, about 400% of their annual salary
Consequently, if you can get funding to keep key staff, this is likely to save you money in the long run.
It is easy to assume that volunteers, particularly those over 70, who have not been involved for months may not want to return but the value they get from their involvement is probably even more critical now. I am concerned that many people, particularly older ones, feel isolated and anxious, and if it is possible to allow people to volunteer safely, this is more important than ever and could attract funding.
As discussed above, how you use your buildings, a significant resource for many charities, is likely to be under review. How much do they cost to open, and will this increase with the additional safety requirements like screens and cleaning? Will people be willing to come to them?
Risk mitigation
If you have a risk register, you need to update it. If not, then as part of your reflection and strategic thinking, you need to consider potential risks and how you can reduce the potential of them happening, prepare for them/reduce their impact. You also need to identify critical areas you need to track and identify 'red flags' which should prompt action, for example, setting a monthly income level which if not met prompts urgent action.
Here are some other risks to think about:
- Another lockdown
- Critical staff getting ill
- Your charity being the centre of an outbreak
- Funding/income staying reduced over the long term
Conclusion
There is no right time to make difficult decisions, but if you have thought through your strategy, so you have a clear rationale and a plan going forward then at least you are doing everything you can to act in the best interests of your organisation.