Creating resilient charities – what have we learnt and what should happen next

There is no debate about the extent to which the pandemic has impacted on the charity sector. Charities have had to try to remain strong through some extraordinarily difficult challenges. No wonder the Chancellor of the Exchequer called them “unsung heroes”.

Nor can there be a debate about whether charities are important to our society. As Helen Stephenson, the CEO of the Charity Commission said in her introduction to their annual report a couple of months ago: “The unequivocal lesson of the past year is that a resilient, vibrant voluntary sector is not a ‘nice to have’ – charities and community groups are integral to the healthy functioning of our society and must play their full part in the long-term recovery from the crisis”.

‘Resilience’ is an interesting word. For many it is a reactive word that describes the ability to keep standing whilst blows are falling. For CAF, however, it has always been a more proactive word, encompassing the ability to see challenges coming and adapt with agility to avoid them. It is not an insurance policy against the worst happening but a sensible business plan to ensure the best does.

Much has been written about the difference between businesses, ostensibly driven to maximise income, and charities, driven to maximise impact. Of course the best businesses have sought to deliver the most positive impact on society whilst maximising their income, and the best charities strive to be as efficient and ‘business like’ as they can whilst maximising their impact. To our mind, however, an important difference is that many businesses and their shareholders will invest money into the long-term strength of their organisations, devoting time, energy and focus on improving operations. But almost no one funds charities to do likewise. Most donors expect the charities they are supporting to be efficient and effective in their operations but still restrict their donations entirely to delivering impact. The end result is as obvious as it is predictable – brilliant charities, doing amazing work, using organisational plans, structures and processes that are barely coping.

This is what Hans and Julia Rausing saw amongst the small charities they were supporting and so they came to CAF to ask what could be done to help resolve this. With their seed funding, CAF was able to bring together other funders who shared these concerns and, with their combined support, devise and run a piece of action research that looked into how charities can best become more resilient. Download the Creating Resilience report for findings from that programme.

As you can see from the report, developing positive resilience is not easy. First and foremost it takes time. Charities are led by some astonishing, committed individuals who are driven by a passion to help improve things in our society but they need time to be able to focus on this area and plan for the future. They also need advice and support where there is specialist work to be done and then time, again, to absorb the learning and implement improvements.

As David Robinson says in his foreword to this report, if we care about the impact that charities are having in our society, then we need to start caring about the charities themselves.

This is why CAF is setting up a triple challenge:

First we are calling on trustees to create within their charity accounts a Resilience Designated Fund. The purpose of the fund will be to enable CEOs and other senior staff to have the time necessary to focus on the resilience of their charities. It is also there to remind all trustees and senior staff to take the future strength of their charity seriously - it should be a standing item of board meeting agendas.

How large should that fund be? For a small charity with a few staff, the director of the charity should be spending at least two days a month on resilience issues. Given the average salary of a small charity director, with a training budget added, that would mean a fund of at least £7,000 a year, clearly more in a larger charity.

Second, we are calling on charity directors to hold sacrosanct the time they should be focusing on the resilience of their organisations. We recognise the multiple challenges facing charity directors but resilience development cannot be something that is only addressed when other commitments allow. The fund we are proposing is there to resolve this.

Finally and crucially we are calling on charity funders to explicitly include support for Resilience Designated Funds when making a grant. Looking at how small charities are funded, we believe that if every grant giver allowed 15% of their grant to go towards a small charity’s Resilience Designated Fund, that would generate the minimum £7,000 a year they need to focus on this area.

The growing effectiveness this would deliver in each charity would provide ample return on investment through the greater impact those charities will then be able to have into the future.

For too long most charity funders have focused on buying ‘charity impact’ – it is now time to start truly supporting charities by investing in their future as well. If you care about the impact that the charities you support are delivering today, then care about their ability to continue to do so tomorrow by investing in their resilience.