For an organisation looking to improve its sustainability it is hard to point to specific steps. So much depends on where the organisation is starting from.
Governance
Some organisations will need to look at governance. If an organisation is employing staff, has leased premises, or is thinking of contracting to run a service they should look at limiting their liability. All of these examples could potentially lead to the organisation being liable for substantial costs. If the organisation is unincorporated the trustees are liable to pay these. If the organisation is incorporated in most cases the liability falls on the organisation rather than the trustees. Another area to examine is whether the right skills are available to the Management Committee.
Other areas of Risk
Other areas of risk may include a failure to carry out adequate risk assessments, not having equal opportunities policies, failing to take professional advice over investments, not having relevant insurance in place, a lack of financial controls etc.
Financial Controls
Particularly when facing turbulent times a tight control on finances can be helpful. If there is a chance that funding may be cut, having up-to-date financial records, a cashflow-analysis, and a good idea of costs will make planning far easier. This may make the difference between an organisation closing and being able to continue. It may also mean that some organisations close rather than continuing when they should not (and breaking the law by doing so).
Planning
Some organisations may benefit from looking at improving their planning. This will usually require the financial information mentioned above. In addition to Business Planning or Strategic Planning, in turbulent times it may be a good idea to look at contingency planning. This involves looking at a number of scenarios. For example, what would happen if funding was cut by 5%, by 15%, or cut entirely? Having already explored the options available, a funding cut becomes easier to cope with, as decisions do not have to be made immediately with inadequate information. Instead it becomes possible to respond proactively rather than reactively to a situation.
Another type of planning that would be useful for organisations is a form of Emergency Response Planning. This deals with questions such as:
What would happen if we couldn’t access our premises (due to fire, flood, etc)?
What would happen if we lost our computer server?
Who are the key members of staff and how would we cover for their absence?
There are many more questions that could be added and the questions will differ from one organisation to another. Like the contingency planning they enable an organisation to respond to a crisis.
The consequence of not addressing sustainability
The consequence of failing to address sustainability is to remove the choices available to an organisation. Some areas will have an immediate effect, other areas will only become apparent in times of crisis, still others will act to drain the organisation over time. Many can be prevented by acting in advance.
This is a summary of a report prepared by the CRIB Project entitled “Towards Sustainability”. This summary was first printed in the March edition of Grapevine. A full copy of the report can be downloaded from here.
Some factors affecting sustainability may go back to when a group was first formed. Three in particular are:
Vision The group thinks through what it wants to achieve and draws up ideas of how to achieve it. Once this has been agreed it can be hard to change even if the original vision was flawed or duplicates other work
People The people that come together to form a group each bring their own strengths, ideas, skills, contacts and experiences. Unfortunately they also bring weaknesses, prejudices and attitudes or beliefs. The precise combination of strengths and weaknesses can either reinforce or reduce the viability of the organisation.
Structure Decisions on a legal structure are often made at a comparatively early stage. Unfortunately since these decisions have an effect on how the group operates they can also affect the organisation’s long-term viability. While it is possible to change a legal structure it can be a very difficult and time-consuming process.
Other Critical Factors
There are many more areas that affect sustainability in addition to those already mentioned. They include:
Having a diverse range of funding sources that are stable and sufficient
Having the skills needed by the organisation. These skills change over time depending upon the stage an organisation is at in its life-cycle and the work it is doing.
The way the group understands a problem, plans and breaks the problem down into manageable chunks
Access to information such as funding opportunities, local and national policies and strategies, best practice, etc
How adequate a group’s financial controls are and whether the group has up-to-date knowledge of its finances and commitments.
Whether an organisation duplicates the work of other organisations
How well the projects run by an organisation fit into its long-term strategy. Sometimes a project may attract short-term funding but be counter-productive to long-term strategy.
The vision an organisation has of its work and whether this is able to sustain the group’s activities
How an organisation views the long-term and whether it plans for the future
How an organisation responds to a changing environment. Local and Central Government strategies and policies can change drastically with comparatively little notice. Voluntary organisations need to be forward looking to adapt to these changes.
Whether an organisation is able to devote adequate time to reducing risk, planning, making funding applications, preparing policies, etc
Whether the organisation monitors the results of its work, communicates this with funders and other stakeholders and uses the information to inform its future work
Although leadership styles differ a good leader will help their organisation be sustainable by:
Providing direction and impetus
Being forward-looking
Making timely responses to opportunities and threats
Promoting the organisation
Being knowledgeable about the environment their organisation works in
Embodying the culture of the organisation
This is a summary of a report prepared by the CRIB Project entitled “Towards Sustainability”. This summary was first printed in the March edition of Grapevine. A full copy of the report can be downloaded from here.
There are two changes that have been recently introduced that affect organisations spending money overseas. These could affect some of the organisations in Lewisham that include other countries in their area of operations.
Finance Act
Part of the Finance Act 2010 allows Her Majesties Customs and Revenue (HMRC) to judge whether money spent overseas is spent on charitable activities or not. If it decides that the money was spent on non-charitable activities HMRC may withdraw the tax relief on that money. To avoid this organisations spending money overseas should keep full records of the money spent.
Bribery Act
The Bribery Act 2010 also includes measures that while not aimed at charities could affect charities. The act creates four new offences, including bribing a foreign official and failing to prevent a bribe being paid.
Control of money sent overseas
Both of these measures could affect organisations that send money overseas, but do not control how the money is spent. This is something that the Charity Commission has already advised against. In at least one inquiry report they ruled that money raised for charitable purposes remained the responsibility of the charity that raised the money and that it could only be spent on charitable purposes. Passing money to another organisation, even if it was also charitable did not remove the obligation to ensure that the money could only be spent on charitable activities. See Charity Commission guidance for charities working overseas.
The CRIB project will provide a range of information, advice and support to new, small, BME and Refugee organisations working directly with the public. CRIB will also help groups demonstrate community needs and promote the impact of your organisation’s work.
If you are thinking of starting a voluntary or community group or are already up and running we can help you to:
Organise and plan your activities
Find out about relevant funding opportunities
Apply for local authority contracts
Support your users better
Keep in touch with key issues that affect your work
Develop your knowledge and skills through our training days and workshops
Create a strong and sustainable community organisation
Our Development Officer provides one to one advice and guidance on starting up, managing and developing your organisation and will support you to:
Work out your ideas
Set up a management committee
Write a constitution
Develop essential policies and procedures
Write funding bids
Operate to high standards
Monitor and evaluate your work
To book an initial discussion please contact Mike or telephone 020 8698 6034.
Information and research
CRIB will also carry out research into the voluntary and community sector in Lewisham. We want to make sure that we reflect the diversity of groups in the Borough. This will also make it easier for members of the public to discover organisations in their local area. In addition it will help voluntary and community groups find partners for joint tendering or for other joint working. Plus, it will also allow VAL to circulate information about funding opportunities. To do this we will develop an online funding portal with details of funding news, opportunities and resources, in order to help organisations find the funding they need to develop their activities.
For more information about CRIB call 020 8698 6034.
CRIB is committed to working alongside you to build a strong and independent voluntary and community sector in Lewisham.
Governance is an umbrella term which tells you how the business of an organisation is carried out.
At VAL we see governance as the way our trustees, their committees and delegated staff exercise their responsibility and authority, and to ensure that at all times it is consistent with the spirit of our Articles of Association and our charitable status. In addition, it is about how we pursue our work to achieve our primary objectives.
In pursuing good governance, our trustees at all times seek to be accountable, transparent, consistent, flexible and representative. They also seek to work within our values and principles framework.
Change Up is a government initiative for investing in the development of Voluntary and Community Sector infrastructure and capacity building support. It has been developed with the voluntary sector and seeks to address key capacity needs of frontline organisations through infrastructure improvement. ChangeUp aims to ensure that by 2014 the needs of frontline voluntary and community organisations will be met by support that is available nationwide, is efficient, offers excellent provision to all, promotes diversity and is sustainable. This will be done on a local, sub-regional and regional basis.
ChangeUp originally addressed six national ‘Hubs of Excellence’ to enable frontline organisations to fulfil their potential. These were:
At the local level, the Lewisham Local Infrastructural Development Plan (LIDP) has been written in response to the ChangeUp initiative. Based on consultation and research, 10 initial development programmes have been identified:
ChangeUp has synergy with community focussed strategies and policies adopted by Lewisham Council and Lewisham PCT. The initiative can potentially ‘add value’ and maximise investments by Lewisham Council and Lewisham PCT. Nationally, ChangeUp is managed by Capacity Builders, an agency at arms length to government. Please refer to the ChangeUp website (external link) for further information and the East London Network website (external link) for details of sub-regional initiatives and resources.
Further Information
For further information on ChangeUp please contact Brian Wagenbach on: 020 8698 6034 or e-mail: brian@valewisham.org.uk
The Community Accountancy Service at Voluntary Action Lewisham is free for charities and non-profit organisations working within the borough. This includes social enterprise organisations and community groups. We have considerable experience of working with voluntary and community groups and understand the pressures and challenges faced by this sector. We can support you at all stages of your organisation’s growth. For example:
Setting up a new community group
an overview of financial implications and responsibilities
writing a business plan
creating budgets and forecasts to support funding applications
Getting going
financial awareness training for your management committee
support and training for treasurers
developing a financial controls policy
help with setting up basic bookkeeping systems
how to monitor your cashflow
record-keeping and reports for funders
preparing year end financial statements
As the organisation grows
employing staff – from payscales to payroll
preparing for audit or independent examination
advice on choosing and setting up computerised accounts packages
budgeting for full cost recovery
support for lone finance workers and non-financial managers
Financial Health Checks One of the ways we can help you assess the strength of your financial management is by doing a Financial Health Check for your organisation. This is a simple questionnaire which looks at the four key areas of
financial controls
record-keeping
budgeting and financial planning
financial reporting
After completing the questionnaire with the Community Accountant we can help you identify priority areas for improvement,devise an action plan and help you implement it by providing model documents and policies, bookkeeping templates, information and referrals to specialist agencies, one-to-one advice and support, and access to our in-house or public training courses.
Our newsletter, ASSET News, goes out once a year. See the previous page - Community Accountancy - for the last ASSET Newsletter with information on Reserves Policies and free budgeting software.
