Spend reserves to defeat recession, says Mike Hudson

Charities should consider spending reserves to maintain core services and management capacity during recession says Mike Hudson, author of Managing Without Profit, a guide to leading, managing and governing third sector organisations.
 
“The third sector is better placed to overcome the recession than the private sector because its business model is based on holding reserves, not on borrowing. Reserves exist as a buffer so now may be the time to use them so that you are well positioned for the inevitable upturn,” he said.

“Board members and managers must recognise that reserves exist to cushion organisations when times are tough. If income is one of the determinants of a reserves policy and the organisation is anticipating a temporary fall, then reserves can be dipped into to ensure long term success.”

But Hudson warns that accessing reserves should not be employed as a strategy to avoid tough decisions.

“Managers must still find efficiency savings and pursue opportunities to form new strategic partnerships, such as merging back office functions with other organisations. These decisions can be taken boldly in the current climate.”

Mike Hudson offers advice on managing strategic partnerships and mergers in the third edition of Managing Without Profit, to be launched on Thursday 19 February.

The guide also features new sections on winning work from the public sector, tracking corporate performance and includes many new case examples drawn directly from the author’s recent work.

Managing Without Profit, £24.95, is available at www.dsc.org.uk.

For more information please contact Renee Wolfik, PR Manager for Directory of Social Change, or phone 020 7391 4873.  

Notes to Editors:

• Mike Hudson is Director of Compass Partnership, a group of management consultants which works exclusively with nonprofit organisations. He has provided management consultancy services to the nonprofit sector for twenty-five years and has contributed to third sector policy development at the Home Office and the Office of the Third Sector.
• Managing Without Profit, is now in its fifteenth year of publication and has sold over 18,000 copies and been translated into three languages. Published by the Directory of Social Change (DSC), the third edition will be launched in central London on Thursday 19 February.
• The Directory of Social Change (DSC) is an independent national charity and the largest provider of information and training to the UK voluntary and community sector, publishing a wide variety of resources for charities.