Six characteristics of a resilient charity

1 Purpose

• Understand what your purpose is, and just as importantly what it isn’t.

When funding is such a challenge and public bodies are using charities to deliver their mission, it can be easy to fall into the trap of following the funding, by allowing external entities to dictate your organisation’s direction. It’s vital that as a board and team of staff, you have a clear mission and evaluate all opportunities against this. Funding is important, but not at the cost of delivering the change you exist to deliver.

In our experience, a theory of change workshop can be extremely valuable in galvanising an organisation’s focus on how they can build resilience. Extended time with all stakeholders to focus on the bigger picture often gets side-lined. But aside from the ‘work’ outcomes achieved, this shared focus revitalises and connects those who care about the cause. 

This was our experience with one charity in particular. As part of our initial meeting, we asked why they existed because their work felt very disjointed. The charity could tell us all about what they did in terms of activities and projects - but struggled to articulate what they were trying to achieve. 

In the time we’ve been working with them they have agreed their purpose and reviewed how their activities fit with this. Their theory of change document has also allowed them to regularly ensure the organisation stays focused, makes informed decisions about strategy and measures itself against its intended impact.

2 Awareness

• Awareness of the political, economic, local and national context you work in. Regularly horizon-scanning for challenges, threats and opportunities.

In many parts of the UK, the local voluntary sector landscape has changed significantly in the last decade, let alone since Covid-19. As a board and senior management team, it's important to spend time researching who else is out there because your information can quickly go out of date and this may have an impact on your delivery. 

An example of this is a charity we worked with recently that supports young parents. The staff had understandably been too busy with vital delivery to spend time looking at who else is working in this space. However, when we did, we quickly realised that many of the charities and projects they knew of had significantly shrunk, closed or widened their beneficiary group beyond young parent families. 

This surprised the charity and they realised that they are now the largest UK charity that focuses solely on this client group. They became aware of opportunities they had not previously seen and also of the risks that caused many similar organisations to close.

3 Effective leadership

• Effective leadership with trustees and staff who take time to talk about the bigger picture rather than focus solely on day to day matters.

It’s not uncommon for a charity which has grown organically, to find they do not have a fully functioning senior management team. We've worked with several charities where there is a CEO and perhaps one person responsible for finance, but all other roles are devoted to (and funded by) delivery.

At a certain point in a charity’s growth, they run the risk of moving into a cycle of constant trouble-shooting and ‘bunkering down’ rather than developing. The charity cannot be effectively led when the CEO is wearing too many hats.

Inevitably, strategic direction will get pushed down the list, and the charity staff can become frustrated that despite everyone working flat out, they don’t feel their work has the impact it deserves because it’s not being directed strategically.

The board can play an important role here by supporting the CEO to develop a team around them that shares the responsibility, risk and knowledge. Also by recognising the importance of treating organisational resilience as much an area of priority as funded projects for beneficiaries. 

Our advisory team are rarely called in to work with a charity on its leadership alone. Yet in working with a charity on almost any significant change, including diversifying their income or updating their strategy, facilitating effective leadership will always be key. 

Often the CEO doesn’t lack the skills to take the charity to the next level but is not able to carve out the time to think strategically and we are able to work with the CEO and board to help identify the senior team needed to allow the charity to move forward.

4 Well networked

• Well networked and able to get support from and work in partnership with others.

There is a tendency to only network locally or within your cause area (eg young people or medical). However, there are real benefits of networking with those other than your comparators. 

When selecting ten organisations to be part of our pilot programme on resilience, we tried hard to select a range of models, causes and geographic areas. We wanted the organisations to be as varied as possible and felt we had succeeded. However, when we got all ten together for the first time and they began to share their challenges, the charities repeatedly commented on how similar they were! 

It’s important not to be too narrow in focus when looking for other organisations you can work with and learn from. Additionally, if you’re not competing for funding this often allows greater honesty and peer support. 

So, next time you think about your networks, consider who else you might be missing. No matter what your cause and delivery model, the chances are that your charity struggles with the same organisational issues as others.

5 Financially and operationally fit

• Financially and operationally fit with sufficient income from a diverse range of sources.

It’s crucial to make sure your board understand your current income mix fully before looking to diversify. The CEO may be clear on how many types of funding you have (eg grants, contracts, major donors etc) and perhaps your board are too. But it is less likely that those setting strategies would be able to say how diverse each of these types are.

For example, Charity A receives 90% of its income from grants and Charity B has four types of funding, grants, contracts, charity direct debits and loans, each representing 25% of income. So far we all know which is the most diverse and least at risk. Or do we? 

If Charity A has ten grant funders, none of whom represent more than 15% of total income but 25% of Charity B’s income is entirely down to one major donor who could at any point pull out...which is the most financially fit?

This is the kind of scenario we often see when helping charities to think about diversification. As important as it is to consider “types” of funding, you also have to look at the diversity within these types. Many boards we work with do not have a handle on this and are often unaware of how diverse their current make-up already is, as well as its longevity and where the risks are.

6 Impact

• Able to identify and communicate the need that they meet and the impact that they have.

Much has been written in the sector about impact measurement, data capture and the like. Most organisations are getting better and better at understanding and capturing the value of their work. 

However, it’s still fascinating to see the number of charities who share this information with funders only. Many neither use it internally to report against their own objectives and outcomes to drive their performance to meet beneficiaries’ needs; nor use this reporting within their annual report. 

Websites may be the first point of contact and the obvious ‘shop front’ but funders and individuals looking to donate will look up annual reports, often before contacting a charity directly. 

When we're asked by potential donors to research and shortlist charities that fit their criteria, the annual report gives an important insight into the mindset of the board and these reports can be a missed opportunity to shout about the need for your services and the amazing difference you make.

Take the time to reflect

We understand it’s difficult to focus on the organisational health of your charity when you’re busy delivering services but if the charity is unable to bounce back from adversity then it’s your beneficiaries who will suffer.

So, why not challenge yourselves by benchmarking your charity against these six characteristics? How well do you think you’re doing and which pieces do you need to put in place?