One of the biggest challenges for charities over the next few years will be how to bridge the gap between the money you can raise, and the money you need to spend to keep things going. It’s not a new challenge, but with each year that the state withdraws further from the sector, the pain is increasing, and the stakes are rising.
There are only three basic ways you can meet that challenge: cut costs to fit, find new income to fill the gap, or radically transform what you do. The problem is, that most charities only seriously grapple with this issue when doing the annual budgets, which means they only ever look at the first two of those ways, and usually, only through a 12-month lens. And that’s a huge missed opportunity.
The long-term change in the funding landscape is a strategic, potentially existential threat, so it needs a strategic, not a tactical response. And that can’t happen during a budgeting process that’s primarily trading off conflicting departmental interests within an inevitably constrained timeline. And what’s worse, as an organisation’s financial position tightens, its annual planning process becomes increasingly dominated by ideas for in-year cost reduction and income generation, ever-smaller incremental steps that can never lead to the required transformational outcome. In fact, it’s far more likely to lead to a slow spiral; a death by 1,000 cuts.
To find a different future, you need to take a more strategic approach, which means setting the time, the space, and particularly the environment, to look at the bigger picture, and to ask the more fundamental questions. Like “What if?”
What if we had to provide 100% of our services and support through unpaid volunteers or through other charities?
What if we had to deliver everything virtually, with no physical presence at all?
What if we had to merge all our infrastructure with our biggest competitors?
What if we started a completely new organisation, with the same aims but to run on a shoestring?
In each of those scenarios, are there any critical parts of our mission that we couldn’t somehow find a way to get done?
The reason to ask yourselves those bigger questions isn’t because the scenarios are likely or desirable (although they might turn out to be once you’ve done the maths), but because they, and other questions like them, are strategically provocative. These are the questions from which transformational strategies are made, strategies which differ fundamentally to those which emerge from the budgeting cycle.
But here’s the rub. The biggest single barrier to transformational thinking, is the emotional investment that you and your team have in the status quo – the titles, the responsibilities, and the self-image they provide and support. Which is why you can’t do this in a budgeting process, when all of that is explicitly up for grabs, without triggering defensive and dismissive behaviours. You need an environment away from the office; a set-up that lifts people out of their roles; activities that help them shed their preconceptions and escape their assumptions; then you can start on those bigger questions.
And if it goes well, you might even get to the biggest of them all: “What if we didn’t exist – would anyone still miss us in six months’ time, and if so, what exactly would they miss?”