Earlier this week I was reading a sad story of a successful local charity not too far from Minerva’s Northamptonshire base faced with an uncertain future as a result of funding cuts.
Not an unusual scenario, given the coronavirus crisis and the economic state of the country.
But could it have been avoided?
A quick glance at the charity’s recent annual reports and accounts showed that over 50% of its income was derived from local authority grants, all of which – and more – was swallowed up by staff salaries, national insurance and pensions.
Interestingly too, no money at all in 2020-21 was spent on raising funds, suggesting that the charity either has a dedicated band of volunteers who raise money nothing; or that no fundraising took place outside the statutory grant provision.
Unfortunately, this is a story which is all too common. Over-dependence on local authority and/or national government grants easily leads to a crisis when those grants are reduced, or dry up altogether.
Many of Minerva’s clients, of similar size to the charity quoted, have faced the same challenge. Happily we have been able to help them diversify their funding streams and so weather the storm when statutory grants or service level agreements are reduced or come to an end.
It isn’t rocket science – but it does need forward-thinking charity leadership and a clear strategy during the good times to ensure funding continues in lean years when fundraising becomes tougher and more competitive.