Charity Commercial Trading Operations

SME charities are passionate about their core mission. The main board and other stakeholders want faster, bigger impact to achieve the core mission. But income streams may be flat-lining or erratic in their fundraising success.

Often, the Commercial Manager in the charity (if there is one) feels like a second-class citizen, or a ‘voice in the wilderness’ – lacking an agreed framework to launch significant commercial enterprises, especially ones that draw resources away from core-charity priorities. The Commercial team may be cynical about charity board long term commitment to build commercial activity (go the distance) in any case.

The journey to strengthen the commercial trading emphasis (income diversification) may start with renting out surplus office space and hiring one board member with commercial experience. And then move to creating a commercial committee of the main board, to leverage intellectual property and explore strategic partnerships. Finally, there is a realisation that nothing short of a full commercial board to oversee decisions & commercial risks concerning commercial trading activities, will actually deliver significant cash contribution to subsidise ongoing charitable activities. sleicest-consulting has developed a framework to help strengthen your commercial trading activity, so that year-on-year, it can subsidise core charitable activities. If this has appeal, feel free to get in touch.

Of course, organic growth of your commercial portfolio isn’t the only route to scaling up commercial contribution. There may be scope to merge with another charity that already has a thriving commercial trading operation. But lacks some of your organisation’s strengths. sleicest-consulting can help seek out attractive merger candidates for you. Recent case studies of commercial trading involvement by sleicest-consulting include;

• analysing IP opportunities to monetise,

• supporting the sale of publishing assets of a charity to a global publishing house,

• arranging commercial royalties streams for a charity,

• negotiating commercial contracts for registered charities,

• financial reporting to the commercial board of the main charity board,

• creating commercial business cases and doing deep-dive investigations into potential commercial partners.

Multi-Year Strategic Plans

Business strategy oversees functional strategies (finance, IS/IT, HR etc) and is about the clever, big picture HOW your charity expects to achieve its goals. Goals incidently answer the question of charity workers about what are we here to do? If you need support in creating a stronger strategic plan, one that links mission, goals and resources available, quantified in financial terms, with scenario modelling, sleicest-consulting can help. Services including building multi-year financial plans that link I&E to Balance sheet and cashflow forecasts.

Two areas well worth examining are the potential for strategic partnerships (exist on a spectrum from informal alliances through to formal joint ventures) and examining your ‘natural allies’ – organisations who stand to gain from your success (companies, government agencies, regulators).

Ideally, a business strategy doesn’t just state the goals or business values but instead, centres on your points of differentiation, your defined scope (of strategic focus) and what you expect to own or control by realising the strategy – some IP, some proprietary expertise or knowledge/standards, preferential access to some unique resources etc. In the natural world, various species exhibit diverse strategies to ensure survival of their species.

Risk Management

The world of charity risk management is changing. It’s easy to dwell on the small risks in front of you and ignore the existential risks to your organisation’s viability and relevance. The threat of AI to the London commercial property market for charity property owners is a case in point. The threat of demographic changes (your workforce, your membership, your volunteers or your customerbase) is another.

Charity strategic planning remains tightly linked to risk (opportunity and threat aspects) and doing planning without explicitly considering those risks is both naive and superficial. Meanwhile, building intricate risk registers that gather proverbial dust between updates isn’t risk management and has been described by seasoned risk practitioners (risk managers and risk academics) as ‘risk theatre’.

Risk mitigation design requires skill, imagination and constant vigilance. How have others mitigated their equivalent of your risks and is your organisation using cost and time-effective mitigations?

Risk management exists at both the strategic and tactical level. Examples of the later include specific internal controls (your auditors can advise on these). Examples of the former include building general business resilience, ensuring a strong innovation pipeline and building an options portfolio.

Lastly, organisational risk is a bit like business strategy – everyone thinks they are an expert, until external forces test those assumptions. Training and discussion forums are a far cheaper way that paying the reputational and economic price, the hard way. sleicest-consulting can assist in designing inhouse training modules on risk for your organisation.

Business Flexibility Services

sleicest-consulting is also a resource for organisations interested in improving their business resilience and business flexibility. The business drivers relating to the need for improvement might be;

• to enable market and product growth (remain relevant and competitive),

• to enable modernisation of their digital technology (cope with the opportunities and threats of AI).

Or perhaps to counter to future ‘black swan’ events. Such threats might be caused by any combination of the following things; extreme weather events, country trade wars, supply chain disruption, cyber disruption, decarbonisation legislation, market resistance to fee rises, or the rising cost of risk mitigations. There may also be sudden reputational threats, linked to an association with certain suppliers or strategic alliance partners.

So,what is meant by the term ‘business flexibility’? Four key aspects are; adaptability, agility (pivoting), resilience and options management. At the next level down, what is meant by the term ‘business resilience’? Four key aspects are; protection, durability (wear and tear), human determination (grit) and healing rate (to bounce back).

Whether an organization’s business strategy relies on growth (organic or inorganic) or value improvement (offering progressively better services for existing customers say), business resilience is both a vital input and output of the business strategy.

Business resilience as an input to business strategy includes:

– developing policies relating to financial reserves levels held,

– developing a plan to handle inflation volatility, or volatility in the labour market,

– developing talent acquisition and talent retention strategies,

– developing plans to handle supply chain disruption, financial credit crunch, or government-imposed changes, to deal with an emergency like a civil war, trade war, or pandemic outbreak.

It follows that the business strategy (a concentration on vertical integration, global dominance, buying out competitors, developing operating excellence, emphasising product innovation or customer intimacy say), ought to deliver not just growth, or product & service innovation. But business resilience too. 

The protection aspect of resilience alone is big business. Ask the big lending firms (lines of credit), alarm system providers, data security companies, contract law advisors, project management and staff training companies. Ask the top football clubs paying large transfer fees to secure highly-skilled goal keepers.

High profile organisations like; Kodak, Enron, Barings Bank and the UK charity Kids Company, are amongst the cautionary tales of failed business resilience. Meanwhile, the organisations who have operated successfully for hundreds of years such as; Twinings, Cambridge University Press, Du Pont and Harper Collins are amongst the proven, ‘safe harbours’ of business resilience.

Traditionally, various members of the senior executive team have overseen different aspects of business resilience. The CFO typically oversees treasury & investments resilience, cashflow management, long term financial plans and internal controls. The COO typically oversees customer relations, risk registers, physical security and business continuity plans. The CIO/CTO typically oversees data and digital systems security and storage. The Chief People Officer typically oversees recruitment, talent management and workforce resilience, along with various line managers. But are there gaps? Is there a cohesive resilience framework? Is business resilience explicitly being reviewed for different future scenarios? Who assesses at funder, supplier and customer resilience and considers how their resilience might bolster inhouse business resilience?    

About sleicest-consulting

Simon is an MBA-qualified, senior business consultant and chartered accountant. He has amassed almost 20 years of CFO/FD experience, 4 years of Non Executive Board experience and 35 years of finance experience in 2 countries. Sector-wise, this includes; Not for Profit sector (HEI regulator, fundraising charity and professional membership body organisations, ranging in size from £8M to £110M annual income). It also includes private sector experience – finance experience in retail banking, telco and several manufacturing companies.

Simon has worked at C-suite level in 4 UK professional membership bodies. In the health sector alone, Simon has 8 years client experience; including a UK health regulator, HEI faculty of medicine, health advocacy charity, health empowerment charity (impartial systematic reviews) and health membership body.

Simon has a comprehensive range of management experience spanning; strategy, structure, systems, processes and team cultural change in multiple functions (finance, HR, IT, facilities, procurement, project office, risk reporting and governance support).

Simon has overseen financial reporting set-ups for major multi-year programmes, multiple member fee rises, finance policy changes, tenders, contract negotiations, risk reviews and some deep-dive investigations into key project partners as well.  As a guest presenter, Simon recently presented a conference session to a UK CFO audience (private and non private sector attendees) on how to balance growth with control, as the organisation increases in complexity.

The flexibility frameworks are original and offer fresh approaches to familiar and novel problems alike. 

Contact Details

sleicest@hotmail.com