Supporting organisations to become financially sustainable
07/03/2023
Sustainability goals can sometimes feel overwhelming for those in the voluntary sector – as we explored in our article sustainability and the voluntary sector.
Organisations often find it hard to see where they fit into the bigger sustainability picture, for example with regards to supporting the UN’s 17 Sustainable Development Goals. However, by focusing on what matters to their organisation in their context, charities and other voluntary organisations can make meaningful progress towards becoming more sustainable.
NCVO, National Council for Voluntary Organisations, describe a financially sustainable organisation as “An organisation that can consistently support and deliver its mission, making the most of changing markets and funding environments”
One of the UN’s Sustainable Development Goals is to promote inclusive and sustainable economic growth. By improving their own financial stability and resilience, voluntary organisations can help to ensure they can continue to deliver on their charitable purpose.
Many of the UN’s other Sustainable Development Goals – for example, eradicating poverty and hunger (Goals 1 and 2), and reducing inequalities (Goal 10) - also depend to some extent on the ability of charities and voluntary organisations to remain financially healthy and secure.
Tools and resources to support financial sustainability
In the current economic climate, many voluntary organisations are facing significant financial pressures that could affect their ability to deliver on their charitable purpose, including:
- Inflation and the increasing cost of food, energy and other essentials
- Rising demand – 9 out of 10 charity leaders predict the cost-of-living crisis will increase demand for their services
- Fundraising pressures – 12% of people say they plan to cut back on charity donations
While these are undoubtedly challenging times, there are a number of useful resources that voluntary organisations can access in order to improve their financial sustainability and mitigate some of the impact.
1. NCVO support
The National Council for Voluntary Organisations (NCVO) offers a range of tools and resources to support financial sustainability. The NCVO uses the Sustainable Sun Tool to help organisations measure their progress towards becoming more financially sustainable. The tool considers six areas:
- Strategic approach
- Income diversity
- Financial management
- Communicating success
- External positioning
- Relationships
The NCVO can also carry out financial health checks on charity members to provide a deeper understanding of how and where to improve, e.g. by reviewing recent funding applications, operations plans, and other internal documents. Find out more about NCVO membership.
2. Charted Institute of Fundraising
The Chartered Institute of Fundraising can also support organisations to improve their fundraising practices, but via a different approach. The professional membership body offers free management resources to charitable organisations, including fundraising qualifications, and runs fundraising skills workshops. Find out more about the CIoF, including how to become a member.
3. Charity Excellence Framework
The Charity Excellence Framework provides a huge variety of free online resources, tailored for small, large, developed, and developing organisations. These include templates, checklists, guides and other resources focusing on areas such as governance, strategy, people, communications and risk.
One example is a detailed guide looking at how to reduce operating costs and expenses, for example by drawing up a contracts management register to review contracts more effectively and identify where you may be overpaying for goods and services.
Visit the Charity Excellence Framework Resource Hub page.
4. Reach Volunteering
The Reach Volunteering online platform can connect charities in need of help with volunteers offering their time and expertise, including in areas such as accountancy, book-keeping, financial management and business development.
The platform can also be used to recruit trustees.
Case study: Empower to Cook
Buckinghamshire-based social enterprise Empower to Cook supports communities through food education, including interactive classes to teach young people about healthy diets. Empower to Cook used the
Reach Volunteering platform to connect with a volunteer chartered accountant, who has helped the organisation with its invoices, year-end accounts and cash flow forecasts.
Find out more about Reach Volunteering.
5. The Charity Bank
Smaller charities often face barriers accessing traditional finance, as many lenders do not understand the unique requirements associated with the voluntary sector. The Charity Bank is a savings and loans bank with a deep understanding of the specific requirements of charities and social enterprises, and takes a tailored approach towards assessing small loan requests.
Find out more about the Charity Bank’s charity loans.
6. Centric Community Projects
Lack of space is a challenge for many organisations, and finding suitable space can come at considerable expense. Centric Community Projects is an organisation that has built strong relationships with some of the UK’s largest property owners, and is therefore able to provide office, retail or industrial space, whether for working in, hosting events, using as storage or another purpose.
Eligibility is restricted to UK-registered organisations with clear social objectives. You can view available properties or make an enquiry via the Centric Community Projects website.
Read the entire series
- Sustainability and the role of the voluntary sector
- Using technology sustainably – how charities can support digital inclusion
- Legal resources to help organisations operate sustainably
- Putting people at the heart of your sustainability strategy
- Strategy, planning and sustainability in the voluntary sector
- Repair and reuse
