Ensuring Financial Sustainability
24th September 2024
What steps should voluntary organisations take now, before it’s too late?
These are challenging times for voluntary sector organisations as the cost-of-living crisis bites hard and service demand increases. Many are sharing with us their concerns over future financial sustainability, but this is not limited to small, volunteer-run community groups; we are supporting an increasing number of medium-to large-scale voluntary organisations with advice around funding and income generation.
A recent survey by Rathbones revealed that 67% of UK charity senior executives have seen a decline in the financial health of their organisation since the cost-of-living crisis began, and 13% report it has deteriorated dramatically. Whether large or small, it’s clear that traditional funding strategies – heavily reliant on grant funding – need to change and do so urgently.
Facing the future head-on
We continue to champion the cause for greater availability of longer-term unrestricted grant funding and highlight potential funding opportunities that are available and accessible. However, we must also take an honest and realistic view. Grant funding will likely play a much-reduced role in many future funding strategies.
It’s absolutely clear to us that future sustainability for many voluntary organisations will depend on their ability to make changes to their funding strategy and adapt to those changes quickly.
There is still so much you can do. Consider a future organisational culture that invests in new income streams. One that nurtures a diverse mix of income channels to secure a core foundation of vital unrestricted funding. Furthermore, one that empowers and encourages those connected to you to engage in active fundraising and income generation.
Does your grant funding end in March 2025?
A number of key grants end their current cycle in March, whilst others grant makers are implementing more focussed eligibility criteria to manage increased demand.
We’d especially like to hear if your organisation has significant grant funding due to end in March 2025 or sooner. Have you considered plans to sustain your activities and services beyond then? Are you reliant on more than 20 per cent of your income from one single source? You may already have an active fundraising plan, but do you need help with developing new ideas?
For groups in Glasgow, we offer a range of training, advice, and one-to-one coaching support. If your organisation is based in another region of Scotland, you can visit the TSI network to learn about the support available in your area.
The indicators of financial sustainability
How can you assess your current situation and bring your team and trustees on this journey with you? It starts with understanding how confident you are in your ability to deliver against ongoing commitments for the future. For instance, Charity Digital recommends that financial sustainability indicators include ‘strong stakeholder relationships, diversified funding, sufficient cash, realistic and justifiable levels of unrestricted reserves, robust risk management, and awareness of overheads.’
Trustees should also provide strong oversight of the organisation’s finances and a swift response to challenges, so their early involvement and support in the process is vital. Download the CIOF Handbook on Trustees and Fundraising in Scotland at ciof.org.uk.
Please contact us if you’d like to explore any aspect of your future financial sustainability. We’re here to help.
Access help and advice
We offer a range of training as well as one-to-one support with your funding and fundraising. Visit our Funding and Income page for more details, including how to get in touch. Groups and organisations in Glasgow can confirm their eligibility for support here.
You can also read more about the links referenced above here: