For UK registered charities that are not sector regulators, three major scenarios to consider are as follows, when updating the charity five year plan. 1. Intense sector competition for charity grants and donations. From a risk management perspective, it’s unwise for any charity to rely on one dominant source of income alone, whether from membershipContinue Reading Future UK Charity Scenarios
I regularly come across Charity Annual Reports for UK-registered charities, where one or more commercial trading subsidiaries have been set up in the past. But their financial performance has been poor over time. Eventually, the charity trustees decide to discontinue the commercial subsidiary or subsidiaries altogether. The reasons for poor commercial performance many be variedContinue Reading Parent Charity and Commercial Subsidiary Business Strategies
The Value Chain was outlined by Professor Michael Porter back in the 1980s, including in his ground-breaking book ‘Competitive Advantage’. Meanwhile, charities have long been conducting portfolio management of beneficiary groups, funder groups and portfolio management of their surplus funds via professional investment firms managing diversified asset classes of investments on their behalf. Options theoryContinue Reading Linking the Value Chain to Portfolio Management
Amongst charity KPIs, the single key metric (if there can be only one) is arguably total charity impact per time period. To improve charity performance, either the total impact can be improved. Or the time period shortened somehow. A prerequisite (table stakes) to improving charitable impact is to maintain relevance to the targeted beneficiary groupContinue Reading One single Charity KPI?
There are many noble causes in the charity sector. However, like it or not, fundraising charities operate (with scarce resources) in competitive markets for; funder grants and donations, the war for (staff) talent and even who human beneficiaries approach to help themselves. Often there are low barriers to imitation for new charity competitors. Some competitionContinue Reading Strategy, charities and the ‘markets’ they operate in
As we enter the second quarter of the 21st century, with beneficiary demand pivoting and soaring, UK charities are in general modernising rather too slowly. The slow modernisation rate isn’t for lack of trying. Charity workers in general have always had huge passion and big hearts – something that deserves massive, enduring respect and aContinue Reading Charity Impact
A sophisticated Charity Reserves Policy is linked directly to the Charity Strategic Plan. To elaborate, if funders understand your strategic plan well, they shouldn’t have a problem with your Reserves policy having no upper financial limit. Astute funders also expect to partner for a considerable period of time, with a charity that will be resilientContinue Reading Charity Strategic Plans and Reserves Policies
Permanent Endowments One exciting area to boost charity income on a sustainable annual basis is to set up one or more permanent endowments. For charities who are more interested in helping relatively few beneficiaries, but intensively over a long period of time, then being able to draw on investment income and permanent endowment income eachContinue Reading Innovative new sources of net income for charities
What is an options portfolio? A good way to think of an options portfolio is as an investment in future business flexibility. Some examples of those options may be valued on the organisation’s balance sheet. For example, sizeable unrestricted reserves (that can be invested to earn income until needed). Many examples of those options aren’tContinue Reading Options Portfolio