I gave an interview recently, to UK Fundraising, looking back at a tough year for charities and looking forward to what charities might face in 2021.

I said in the interview that those charities that had stuck most closely to their vision, mission, purpose and values through the challenges of 2020, would be best placed to emerge the strongest when the economic environment has improved and the Coronavirus restrictions are lifted.

2020 has created massive uncertainty for charities. Fundraising has been severely hampered, as donors’ income has been threatened. Fundraising events and challenges have been cancelled, fundraising from the public in offices and on public transport has been decimated. Pressure has been placed on services and some service provision may have incurred significant additional cost. Reserves will have been plundered to ensure sustainability.

In all this uncertainty, we have learned that sticking closely to your vision, mission, purpose and values is essential for a charity that wants to emerge stronger. This will dictate how you deal with your donors, service users and trustees, how you treat your staff and how the donor community perceives you. I have first hand knowledge that those organisations that set up a charity business strategy and stayed true to their values were rewarded by donor loyalty.

The Essential Elements of a Charity Business Strategy

Do all charitable organisations have a charity business strategy, setting out their vision, mission, purpose and values? Well, they should. The Charity Governance Code, a document which sets out best practice for charities, says the following:

“The board should lead the development of, and agree, a strategy or plan that aims to achieve the organisation’s charitable purposes and is clear about the desired outputs, outcomes and impacts.”

“The board should agree the values, consistent with the charity’s purpose, that it wishes to promote and make sure that these values underpin all its decisions and the charity’s activities”.

To be fair, most charities have undergone a strategy review process. But, if you have not, now is the perfect time to do one. It is also a very good time to review your current strategy to ensure that it is fit – not just for purpose – but fit for the future.

Certainly, it is beneficial to fundraising, to develop a strong, sellable and inspiring message.  A revised set of brand values can lead to clearer messaging, can help to inspire and motivate staff, Trustees and volunteers and can help to more clearly explain the charity to donors and the wider community.

The five elements of a clear and compelling charity business strategy are as follows.

  • Vision: This is a single sentence statement that sets out the high level vision for what it is that the charity wishes to achieve. It should be aspirational and inspiring and capable of simply stating what the charity is all about. It is not a slogan, strapline or advertising message, although these ought easily to be developed from the Vision.
  • Mission: This is a single or two-sentence statement which articulates the expected outcome that the charity will achieve from successfully delivering the vision.
  • Purpose: The Purpose explains WHAT the charity does to deliver the Vision and Mission. It is broken down into three headings of no more than three words each which summarize what the charity seeks to do. Each heading has three statements which explain the detailed meaning of the headings.
  • Values: The Values explain HOW the charity will go about delivering the Vision, Mission and Purpose. It explains the type of organisation that the charity seeks to be and the values that it seeks to live. It should be able to encapsulate everything that the charity wishes to be. There should be no more than six values that each have one sentence explaining the practical impact.
  • Slogan: A slogan should be capable of being developed which can be used as a strapline on advertising, marketing and publicity materials and should be capable of attracting donors and volunteers to the charity’s mission.

I have found that, if Trustees and Staff, spend a few hours together at a special strategy session, and consider these categories, it should be possible quite quickly to agree a robust charity business strategy, or to refresh the existing strategy.

Governance and Decision Making 

It is also a good time to look at the governance of the charity – the way that the charity is structured and how it makes decisions. Charities should be appropriately structured so that they have the appropriate governance and controls to support the needs of a modern charity. 

Governance is not a dry and academic subject. The right governance structure can free up decision making, encourage creativity, provide robust oversight and simplify reporting. It can provide clarity to the organisation, enabling the Trustees, staff and volunteers to gain more satisfaction from their roles. It should be enjoyable to be a Trustee, and enjoyment is hard to achieve when there is confusion and frustration from decision making structures. 

There is a wealth of guidance for charities on best practice in governance. The Charity Commission, as well as providing significant guidance, is also focussed on governance. This means that, were the charity ever to have to engage with the Charity Commission, for example though a Serious Incident Report the Commission would be certain to scrutinise the charity’s governance and might recommend areas for improvement.

The Charity Governance Code

We referred earlier to the Charity Governance Code. 

The third version of the Charity Governance Code was published in June 2017, and has been endorsed by the Charity Commission. With a renewed sector focus on good governance, the Charity Governance Code has had a much better take-up amongst charities. The Charity Governance Code is voluntary. However, for charities that aspire to be outstanding in their field, the guidance of the Charity Governance Code is helpful. This Code is designed as a tool to support continuous improvement.

There are seven key principles in the Code.

They are:

  1. Organisational purpose
  2. Leadership
  3. Integrity
  4. Decision making, risk and control
  5. Board effectiveness
  6. Diversity
  7. Openness and accountability.

One of the key recommendations, and accepted best practice, is that the Trustees of a charity are responsible for the charity. You would be surprised how often this principle needs to be restated, due to the structures in charities. And when it says Trustees, it means all Trustees, not some Trustees, or one Trustee, or the Founder, or the chair of a relevant committee. All Trustees have these obligations.

The Charity Governance Code states in Section 4:

The board is ultimately responsible for the decisions and actions of the charity but it cannot and should not do everything. The board may be required by statute or the charity’s governing document to make certain decisions but, beyond this, it needs to decide which other matters it will make decisions about and which it can and will delegate. 

Trustees delegate authority but not ultimate responsibility, so the board needs to implement suitable financial and related controls and reporting arrangements to make sure it oversees these delegated matters. 

Trustees must also identify and assess risks and opportunities for the organisation and decide how best to deal with them, including assessing whether they are manageable or worth taking.

Section 4.1 is clear about the Trustees’ responsibilities – “The board is clear that its main focus is on strategy, performance and assurance, rather than operational matters, and reflects this in what it delegates.”

These are important provisions and easy to implement with proper support.

So, now is a very good time to look at your charity business strategy and the way that you make decisions. It will give you a firm strategy and values to sustain you through challenging and good times and allow you to make decisions that are fit for the future.