Clinks sustainable funding roadshow in the North West Sustainability through Social Enterprise Penelope Fell Consultant in Social Enterprise Development Opening doors

Overview insights into trends in the sector some predictions what the best third sector organisations are doing achieving investment readiness funding applications dos and donts common challenges for third sector organisations reducing costs opportunity areas next steps

Sector Trends blurring of the boundary –many quasi social enterprises new market entrants of many types, directed by people from varied backgrounds including public and private sector payment by results contracts (funded by bonds, loans or other means) scale-up and replication for efficiency and coverage step change in use of social media and importance of communications and PR personalisation agenda

Predictions final demise of grant mindset more front-line third sector organisations providing specialist umbrella roles for small local groups further rationalisation through merger, closure, collaboration further pressures on integrity / perception of not- for-profit brands further reform of sector infrastructure

What the Best Third Sector Organisations Are Doing Now achieving investment readiness diversifying income streams securing accreditations and quality marks getting balance right –business like but mission driven refreshing, reviewing, upgrading and upskilling the board articulating clearly on why they are still here and still needed

What is Investment Readiness? all-round robustness of a third sector organisation or other not-for-profit organisation such that stakeholders feel confident that planned outcomes will materialise and resources will be well managed stakeholders can include donors, grant funders, lenders, philanthropists, corporates, investors, commissioners and others

Key Investment Readiness Criteria governance financial capability (including forecasting) management capability clarity on market opportunity clarity of business model (clear routes to success) establishing a clear commercial market focus developing and demonstrating track record including relevant accreditations human resources management the adequacy of key processes including business planning relationships with partners, customers, funders

Examples of Gaps in Investment Readiness governance is out-of-date, ill-defined or weak organisation is not incorporated e.g., company limited by guarantee weak business model –markets / customers not identified; operations too costly lack of identified actions to develop new business lack of research to understand customer needs and competition (from all sectors) inadequate financial systems, control or forecasting

Funding Application dos keep it as brief and focused as possible set out the basics including legal structure, what you do, where, and indicate scale (income, staff, volunteers, end –users) summarise where you aim to be in 3-5 years include cashflow projections with notes explaining where you expect to get your future income from and why outline areas where activity is secure and provide evidence ( s, confirmation letters, contracts, etc.) set out the track-record / experience of your organisation be upfront and honest about where the organisation needs further development

Funding Application donts dont claim spurious uniqueness if you cant back it up dont write pages about deprived areas, client groups and client needs unless asked for –funders either usually know all about it or dont need it (commercial lenders) dont include information / research unless it is relevant to your organisation and / or project dont wax lyrical about how you will deliver services (unless asked for) dont provide financial forecasts without accompanying assumptions and evidence

Challenges for Third Sector Organisations third sector organisations are at risk of being as siloed as public sector (hampering new business development) public facing image out-of-date and not pitched at securing new opportunities the organisation is timed out (overlaps, duplication) the organisation has lost sympathy during recession (eg., holiday providers) approach not on message with government agenda falling down gap – funders withdrawing and public not engaged with the mission staff indistinguishable from public sector no contingency plans unclear how to restructure / reduce costs / downsize private sector taking over contracts for work

Reducing Costs find free accommodation all / most staff working from home share key central staff with other organisations eg., managers, finance, admin / IT and HR staff use staff on flexible (zero hours) employment contracts by agreement with staff, consider cutting hours delivery via IT / new media do not allow the organisation to run out of money and be unable to pay the bills (possible legal consequences) prepare a cashflow forecast and know when you have to shed staff and other costs

Opportunity Areas self-help organisations and networks peer led organisations specialist mental health providers providers using highly skilled volunteers as main resource providers who grasp the personalisation agenda consider if you can snap up high quality staff and cheap property

Next Steps obtain provision of specialist business support focusing on mentoring and empowering change find critical friend identify opportunities for growth and sustainability review of and suggestions of improvements to funding strategy and applications (how you present yourself) organisational and financial health check business strategy and planning development interim management support for key staff positions training and guidance for trustees, management and staff

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