How to make the Transition

Making change as a result of the changed funding environment

The Transition Fund aimed to provide some funding to organisations which received substantial cuts in public sector funding. The aim of the fund was to help organisations change to become more resilient and to continue to deliver high quality services within a changed funding environment. Whether you received this funding or not, this 'How To' guide aims to provide guidance to leaders of organisations facing change as a result of reduced public sector funding.

Pre-requisites for managing change effectively

Shared vision - change requires a willingness to abandon assumptions

Creation of new opportunities
Clarity of mission and values
Leading to new visions for the future

Creative team

Willing to think ‘outside the box’
Open communication about opportunities, challenges, implications
Able to challenge each other robustly – and be supportive
Prepared to give each other feedback
Build a team around you that you can trust

Realistic staging of change

Avoid silver bullets or white knight syndrome
Plan, plan and plan again
Tasks, milestones and processes
Keep up the pace, achieve some quick wins and celebrate

Communicate extensively and with integrity

Ensure people feel listened to and heard.
Understand the emotion of change and that change can be painful even when it seems as though it should be a good thing.
Effective communication underpins successful change

Open honest leadership

Leader empowered by their board to drive and deliver change
Need to be decisive and determined but delusional
Forward looking, courageous, willing to take risks
Clear about big issues – flexible on the detail
Willing to accept setbacks – determined to maintain momentum

What are your choices? How do you best serve your beneficiaries?

How prepared is your board and senior team to make change? Not at all, or a lot?

Do nothing

The funding environment has changed and doing nothing is really not an option. The organisations that will survive and grow are those that made good strategic decisions early on.

Be reactive, evolve, renovate

Reduce costs, services, staffing
Look for new streams of funding
Make small changes which you hope will tide your organisation over

Be proactive, transform

Go back to your core – think about your objectives and what your organisation is really about
Think about what makes you unique and why you need to continue
Cut services which are not core
Develop new innovative ideas
Understand value of services versus cost
Investigate other players and collaborations and mergers

Close

Maintain the legacy
Transfer assets

Thinking about collaborations or mergers

The real basis of the consideration for collaboration is understanding what is the purpose of the charity and how it might best be delivered.

Spectrum of collaboration and mergers

Sharing knowledge
Collaborative working on issues/projects
Joint venture by contract
Joint venture through new entity
Shared purchasing
Shared services
Merger

Some deal breakers

For Mergers - who is the new leader or CEO and what is the composition of the new Board - is this all amicable or hostile? Any casualties?
Cultural fit
Personalities
Compatibility of objects
Liabilities, e.g.:
- pensions
- property
- contracts
- uninsured claims
- Solvency
- Tax (esp. VAT)

Top tips

Be very clear about why and that it is worth the pain, analyse the benefits and costs
Plan early before it becomes a fire sale or too late
Develop the long term vision
Choose your partner(s) carefully
Consider deal breakers as soon as possible
Be clear about planning, process, organisation, people
Show leadership
Consider VAT and other tax issues early – there is generally a solution to legal and accounting issues
Communicate, communicate
When it becomes painful, focus on the vision and the benefits

Increasing and diversifying your income

Most organisations will be thinking about how to replace lost income - how will you be able to compete? Do you have the right tools in place and do you know how to make a strong case for funding?

Market Context

What is the need for your services
Who are your competition
How are you positioned

Toolkit for Fundraising

Database
Website
Data
Research
Marketing programme

Case for Support / Messaging

Need
The ways in which you respond to need
Who benefits and how
Cost
Who else does this work
What will happen if you don’t do it
Impact a supporter will make

What is your current Fundraising mix

Institutional Giving
Individual Giving
Social Investment
Earned Income

How do can you diversify the mix

Diversifying current fundraising mix
investment required
timescales
ROI

Finally, don’t reinvent the wheel

There are lots of organisations that are going through the same changes at the moment.

Get involved with one of the networking groups and share experiences.
Try peer-to-peer mentoring or action learning set
Find more information about the collaboration and the support services

Further information

The guide is a summary of two events entitled ‘Making the Transition’, and part of a series of materials being put together by a collaboration of six service providers: Action Planning; Bates, Wells & Braithwaite; Cass Centre for Charity Effectiveness; Compass Partnership; NCVO and Sayer Vincent. We are responding to a need in the sector to provide best practice advice and support to charities, social enterprises and other nonprofits making the transition.

Responding to change - mergers and collaborations, more information

Resources from Transition Fund website - signposting guide to further resources and seven basic guides, one for each of the public service areas that are being targeted by the Transition Fund. They are intended to be starting points for discussions within organisations to help inform decisions about how they can adapt to a new funding environment.

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