managing in the new normal

Wo

rksh

op

s AM7: Managing in the new normal

Chair:

Anna Bloch, Acting Senior Policy Officer, CFG

Speakers:

Ian Oakley Smith, Head of Charities, PwC

Daniel Fluskey, Head of Policy and Research, Institute of Fundraising

Paul Streets OBE, Chief Executive, Lloyds Banking Foundation

Thomas Leftwich, Senior Policy Advisor, The Office for Civil Society

Managing in the New NormalHighlights of 2014 survey16 June 2014

www.pwc.co.uk

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PwC

Who I am

• PwC Head of Charities• Chartered accountant and Licensed Insolvency

Practitioner• Specialist in strategy and restructuring for charities

and other not-for-profit entities• Worked with wide range of charities and social

enterprises, typically small to mid-sized charities • A member of the Committee of the ICAEW Charities

and Voluntary Sector Special Interest Group• A member of the Governance and Audit Committee,

The Lord’s Taverners, a charity

Ian Oakley SmithUK Head of Charities

PwC

Some key messages

A “cautious optimism”

1

Concern about scrutiny

2

Greater collaborative working

3

Continued innovation in fundraising

5

Tips for a sustainable recovery

6

Slow interest in social investment

4

PwC

A cautious optimism?

Survey dated

Dec 08

Jun 09 Dec 09

Jun 10 Dec 11

Dec 12

77%93% 68% ??%

46% 55%

PwC

Under the microscope: increased scrutiny for charities?

90%

87%

22%49%

PwC

A greater collaboration

• 77% of respondents have collaborated or are thinking of it, compared with 69% last year

• Service delivery

• Joint fundraising

• Policy research or campaigning

• 90% consider greater involvement of finance teams in strategy

Slide 7PwC

PwC

Still no real appetite for social investment…?

Slide 8

PwC

More innovation in fundraising

Slide 9

PwC

Our top tips for a sustainable recovery

Slide 10PwC

Information

Strategy and fundraising

Saying “no”

OptionsScenarios

CashReserves

Governance

People

1 2 3

4 5 6

7 8 9

PwC

Contact

Ian Oakley SmithT: 020 7212 6023

E: ian.oakley-smith@uk.pwc.com

Slide 11PwC

Managing in the New Normal

Paul StreetsCEO, Lloyds Bank Foundation

12

13

Our new strategy

14

Our new focus

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ENHANCE A grants plus model - offering an optional range of support to strengthen

the effectiveness of those we fund

What’s available? - 3 programmes

16

The Challenge

17Source: ACF Giving Trends Top 300

Foundations 2014 Report

Giving Trends

18

Source: ACF Giving Trends Top 300

Foundations 2014 Report

Giving Trends

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FOUNDATION

LOCAL AUTHORITY

NATIONAL LOCAL COMMUNITY

The Issue

• Quality wins over quantity. Take the time to get fewer applications right, rather than sending many in the hope that one may get noticed.

• Know your grant-maker. Also known as ‘do your homework’. If you know what the grant maker is looking for, you’re more likely to get their attention.

• People and ideas win grants. Ultimately, the strength of your application comes from the strength of the idea and the people behind it.

• Honesty beyond necessity. Don’t be afraid to consider and talk about what could go wrong and is going wrong.

• Make sure grants are only part of your income mix. Also known as ‘don’t put all your eggs in basket’. Relying too heavily on any one source of funding is an easy and common mistake to make.

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Our advice to charities is:

Source: Inside the Mind of a Grant Maker, nfp synergy

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Consultation on a Proposed Sustainability Fund

Thomas Leftwich – Senior Policy Advisor , Sector Sustainability Programmes

CFG Evolve Event – 16 June 2014

Office for Civil SocietyThe Office for Civil Society (OCS), sits within the Government Innovation Group and is part of the Cabinet Office.

Set up in May 2010 to support the voluntary and community sector and to deliver key government programmes, working across Government.

• Approx 75 staff

• Reports to Nick Hurd MP, Minister for Civil Society

OCS key objectives:

• Make it easier to run a voluntary or community sector organisation

• Get more resources into the sector to underpin its resilience and independence

• Make it easier to do business with the state

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The Narrative for the FundAnalysis of engagement with stakeholders and learning from past and current programmes has resulted in the development of an emerging narrative. This narrative broadly follows the following three stages:

The following slides explore each of these three stages of the narrative in more depth.

.

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A changing environme

nt

•The environment in which organisations are operating is changing. Changes to our society, the economy and Government policy, have created both opportunities and pressures for the VCSE sector

Where do we

want to

be?

• It is in all our interests for the VCSE sector to include a diverse range of organisations, delivering high quality services for those most in-need in our society.

•To achieve this organisations need to be robust and resilient, able to understand the best route to sustainability and have the resources and capability to follow it.

Overcoming

the barrie

rs

•Organisations need to understand how they need to change, be able to plan effectively for the future and deliver necessary change.

•However, many small to medium sized (SME) organisations struggle to do this whilst also reacting to the immediate challenges they face. This fund can work to provide these organisations with the support they need in order to realise the vision.

• Support to deal with funding cuts through the Transition Fund

• Growing the Social Investment market:• Establishing Big Society Capital• The Investment and Contract

Readiness fund • The planned market development

foundation• Reforming support for the sector

through Transforming Local Infrastructure • Opening up public services to the

sector:• Working with commissioners • Introducing the Social Value Act

• Supporting innovation in, and scaling up, social action:

• The Innovation in Giving Fund• The Social Action Fund• The Centre for Social Action

• Making it easier to run a VCSE organisation by cutting red tape

The environment in which the sector is operating is changing

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• Need for new skills and capability• Increasing demand for services• Capacity limitations resulting from increased demand• Funding cuts and changes• Opportunities to deliver public services• Greater competition for existing grants and contracts• Increasing overhead costs• Growing expectation to demonstrate evidence of impact

From Government:• Continued spending restraint• Welfare reforms• Local authorities switching grants to

contracts• Focus on growth• Reforms to commissioning

Wider Society• Effects of budget cuts and welfare reforms• Aging population• A more diverse population• Increasing use of digital

A changing environment

Evolving pressures and opportunities for the sector

A changing operating

environment

A range of support and strategies

4. What does the sector need to take the right pathway?

2. What is needed to

achieve this?

1. Where do we need to

be?

3. What are the pathways for the sector?

Our vision is that the fund will help to secure a diverse range of organisations delivering high quality support for those in-need

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A diverse range of organisations delivering positive outcomes for some of the most

vulnerable and disadvantaged in society

Maintain core services by restructuring and reducing

costs

Generate income through trading/establishing paid

for servicesDeliver public services

Robust adaptable business models and clear forward

plans

Access to appropriate sources of external

support and expertise

An appropriate skills base in both executive staff and

trustees

Access to appropriate funding to resource

change

The journey to sustainability for struggling organisations requires a series of stages. However, this can be difficult for medium sized organisations lacking resource

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i. Awareness: An organisation needs to be aware that its operating environment is changing

ii. Understanding: An organisation needs to understand what this change means for them, and that they need to change too

iii. Planning: An organisation needs to plan to deliver change

iv. Delivery: An organisation needs to deliver necessary change

v. Learning: An organisation needs to understand the impact of delivery and share learning

Expertise to carry out needs analysis and forward planning

Funding to free up capacity to deliver change or deliver necessary action

Therefore a potential aim for the fund could be : To identify voluntary sector organisations delivering vital services to vulnerable people in our communities, but struggling to adapt to their changing environment, and put them on the right pathway to securing the long term future of their services.

Funding to free up capacity to engage in planning

Expertise to enable delivery of specific actions

This fund could support small to medium sized organisations on this journey by providing:

• The Consultation launched recently and will run for 12 weeks until the 24 July.

• The intention is for this to be a co-design consultation around the key themes and challenges identified. This will not involve simply proposing a complete fund design and inviting feedback. The responses received will be used to formulate a fund design.

• The consultation will invite active engagement. Advice received has highlighted the need to combine both online and face to face.

The Consultation can be accessed at:

www.gov.uk/government/consultations/new-fund-to-help-vcse-organisations-become-more-sustainable

Queries and comments on the consulation can be sent to:

OCSsustainabilityfund@cabinet-office.gsi.gov.uk

An Active and Open Consultation

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Timetable• Gain approval for consultation

document April

• Launch consultationLate April

• Active consultationJune – July

• Analysis of responses and establishing fund designJuly

• Gain full business case approvals• Commence sector awareness raisingLate summer

• Identify delivery partner/s and finalise application designAutumn

• Fund launched for applicationsDec

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The following is a high level forward timetable for the fund development. This timetable is indicative at this stage and depends on the nature of final fund design established through consultation.

Plan

Consult

Design

Deliver

Excellent fundraising for a better world

Managing in the new normal – fundraising

Daniel Fluskey, Head of Policy and Research

Excellent fundraising for a better world

A familiar scenario?

Charity wants to do more and increase services

Can only increase service if have

resource to fund it

Resource needs to

be sustainable

Investment and growth

for fundraising

Growing need /

demand for service

Excellent fundraising for a better world

Putting it into context

• Latest information available: 2011/12

- Voluntary sector saw a net real-terms fall in its total income of £700m

- Income from government fell by £1.3bn (with more to come)

- Income from individuals is the biggest source of income for the sector, rising by over £500m from 2010/11 and 2011/12

- Value of reserves fell by almost £2bn

Excellent fundraising for a better world

Future fundraising environment

Excellent fundraising for a better world

Fundraising challenges

Excellent fundraising for a better world

How are charities responding?

Excellent fundraising for a better world

The new normal for fundraising• There will be more fundraising!

• Developing new fundraising activity and getting good return on investment will be challenging (it always was and always will be)

• Everything will change, and everything will stay the same

• Skills, experience, and expertise in fundraising will be in demand

• Investment for fundraising needs a clear and planned ‘whole organisation’ approach – the numbers DON’T tell the full story

• External challenges (transparency, scrutiny) and ethical questions will need to be addressed by all organisations

Excellent fundraising for a better world

More information

• Introductory videos http://www.institute-of-fundraising.org.uk/guidance/five-minute-fundraiser/

• Code of Practice http://www.institute-of-fundraising.org.uk/guidance/code-of-fundraising-practice/

Contact me: danielf@institute-of-fundraising.org.uk

Evolve 2014