What are we here for?

January 2009

A recent report in the Guardian (12 December 2008) has indicated that at least £250m has been wiped off the endowment funds of leading UK universities.

Although short-term volatility is not necessarily an indication of long-term financial weakness and endowments are just one source of income, it is just one reminder that non-profit organisations need to be well underway with their contingency plans. Another is evidence that investments of charitable trusts have had poor overall growth over the last few years (see Paul Palmer’s article, A sure foundation). My own alma mater was just one of the colleges that vanished as a result of London University’s reorganisation over 20 years ago. The mergers reported in the latest Patterns of Higher Education Institutions in the UK indicate this wasn’t an isolated example – appendix 4 details the annual deaths of diverse establishments that were simply unable to go on as they were.

The first of the 10 top tips helpfully appended to Managing in a Downturn, November 2008, the survey produced by PricewaterhouseCoopers, CFDG and the Institute of Fundraising, is ‘take a closer look’. In other words, while survival basics such as cost control, donor relations and cash management are a must, a bit of navel gazing is also no bad thing. Organisations need to recognise ‘the true picture, not what you would like to believe’. In other words, as I said last month, ‘what are we here for’? Despite all the encouraging noises from the Government about ‘partnership working’ and ‘better terms of engagement’, I agree with Stuart Etherington that there is a danger of being too obsessed with Government/sector relations at the expense of focusing on beneficiaries. But if most of your income is derived from public sector contracts and there are little to no alternative sources of income, it is an understandable obsession. ‘We should be looking as much for solutions within the sector as avidly as we are looking for government to provide them,’ he says (see Stuart Etherington’s interview).

So what are they? For cash strapped organisations staring at ongoing effectiveness and viablility, they can perhaps be found in collaborative working, partnerships and, where appropriate, mergers. Although comparison with the private sector does not take account of the commitment and passion behind the proliferation of lots of organisations with very similar causal areas and objectives, the economic climate is bound to enforce some rationalisation. Critical mass and an integration of skills and experience all help in being a more equal partner when it comes to working with the Government. Stephen Lloyd reminds us in his article ‘Getting together’ back in April 2008 that ‘it is vital the collaborating organisations have similar cultures… never underestimate the impact of personalities’. This calls for strong leadership and forward looking trustees willing to look at all the options and get on with the job.

Author: Clarissa Dann

Clarissa Dann was the editor of Caritas as well as an HR and management online service,he People Bulletin until July 2011.

She is now the editor of the specialist trade finance magazine, Trade and Forfaiting Review which can be viewed at www.tfreview.com but does write on charity finance and investment from time to time.

Clarissa has a background in legal and professional publishing, as well as business journalism and holds an MBA from Cass Business School. She has been one of the judges for the non-profit category of the Chartered Institute of Marketing's Excellence in Marketing Awards for the second year running.

She has also acted as clerk to the trustees of a small almshouses charity and as a member nominated trustee to a pension scheme of a multinational publishing company.

Click here for other articles written by Clarissa Dann

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Editorial

What are we here for?

Author: Clarissa Dann