Stuart Niven introduces seven ways charities can nurture financial resilience

In a recent survey, one in seven charity chief executives say their organisation is struggling to survive, rising to one in five among smaller charities

1 Start inside out

Have a clear vision of what you want to achieve, backed up with robust governance. Boards should adopt a critical friend approach, being supportive but challenging. Stay focused on the big decisions. Make sure everyone involved, inside and outside your organisation, understands your objectives, plans and key milestones.

2 Prune costs but protect buds of growth

When funding begins to dry up, a natural reaction can be to cut costs. Whilst this can be effective, it can also damage long-term sustainability or growth. Assess the impacts of spending reductions to the income and resource sides of the equation.

A broad spread of income sources can be a hallmark of a resilient charity. Essential skills in your organisation must be retained and remain agile, by considering portfolio or project-based resourcing.

3 Nurture relationships with existing supporters

Understand what motivates and inspires your current donors. Ensure the rewards that supporters receive from their giving are clear and captivating. Discover what makes them tick and forge a strong emotional bond. If a donor can touch, taste and feel your impact it will heighten their experience.

4 Take a donor-centric approach to fundraising

Describe your proposition, develop a compelling case for support and research prospects’ needs. Your case for support is especially crucial. Set out the problem or opportunity you exist to solve; how you tackle it; why your charity is perfectly placed to do this; the resources you need and what difference you can help givers to make.

5 Make giving to your cause easy

Optimise your website and social media channels to encourage and accept online donations, including from smartphone and tablet users. Think beyond single transactions. Make regular giving online easy by offering Direct Debit as an option.

6 Explore alternative paths to generating income

The charity sector as a whole derives more income through trading than it does from giving. If feasible, carefully assess the pros and cons of trading.

Also consider crowdfunding, social investment vehicles, such as social impact bonds, or traditional bank loans.

7 For repayable finance, be well-prepared

Loan financing can accelerate receipt of future income by achieving a planned outcome quicker. This could be to help bid for contracts, invest in new fundraising activities, grow capacity, buy or develop an asset, or perhaps launch a trading venture.

Arranged debt can help a project get under way, potentially unlocking and diversifying sources of income. However, assess the benefits and risks carefully.

Engage with potential providers of finance early and be prepared to answer questions.

To compare charity finance choices, their potential benefits and risks, download our free guide, call Stuart Niven on 03000 123 625 or email [email protected] for a confidential consultation.

Stuart Niven is business development manager (Scotland) at CAF, a provider of financial and fundraising services for charities.