When advising charity clients on strategic risk, the first question we ask is:
“Are you making the desired impact in support of your beneficiaries, and can you evidence it?”
Charities are set up as public benefit entities. The objects of your charity determine the overall purpose to which the charitable funds will be put, but it is up to the discretion of the trustees as to how to spend their money to best meet those objectives.
It is sometimes tempting to adopt an incremental approach to what the charity does, based upon historical precedent. This can provide continuity, and may limit the risk of moving away from a proven charitable model, but as trustees you need to honestly ask whether this is (still) the best way of using your resources to deliver maximum impact.
Charities will evolve over time, and often this adds layers of complexity (and cost!).
As an exercise, we often challenge trustees to ask:
“What is our core purpose, and if we could only do one thing to service that need, what would that activity be?”
Going back to a core activity will allow you to consider simplifying how you deliver this service in the most efficient way, to provide maximum impact. You can then add back additional layers of activities, one at a time, whilst critically appraising their relative impact against the cost.
Give it a try for yourself, or if you would like help in facilitating your next strategy day give us a call.
Richard Miller is Strategic Services Partner at Dafferns and provides expert support to charities and not-for-profits.