Many charities are facing huge financial challenges at the moment, fuelled by the cost of living crisis in the UK, rising energy costs and interest rates, and an increasingly tough operating environment.
Here are three quick tips for keeping your leadership on track while working on your organisation’s response to the current cost pressures.
1. Remember why you’re here
In the midst of planning, reviewing, calculating and recalculating, it’s easy to get caught up in thinking the goal is to reduce costs, manage with less, or otherwise deal with the external financial pressures.
It’s not. As leaders, your goal hasn’t changed. Your vision, mission and strategic objectives are still the things you should be focusing on.
The context might be changing, and you may have fewer resources to achieve them, but what you’re trying to achieve as an organisation for your cause and your beneficiaries is going to be largely the same.
The next few months might see you making cuts to services, cancelling contracts, reducing expenditure, negotiating with suppliers, and checking cash flow all the time – all of that can be horrible and draining…
If you ask “are we doing the same with less?” the answer’s likely to be no.
But if you ask the question “are we still meeting our charitable objectives and delivering against our vision and mission?” the answer is likely to be yes – even if you’ve made big changes, reduced some activities, or made unavoidable cuts.
You’ve done the same things, but connecting them to your overall goals rather than “what you did before” is a much more positive way to view them!
2. Solve the problem like leaders
There’s a bad (or maybe familiar) way to respond to increasing costs, which goes: senior managers say costs are going up and can’t do anything about them, finance team says “here’s how much more we need”, and the fundraising team get a new (but unattainable) income target.
That might work sometimes, but if you’re looking at costs going up across the board, a tougher fundraising environment and increasing need, it’s likely to take more than that.
What we’re currently facing is more complex than losing a bid or a grant programme ending, and it’s likely to take a lot of different and interconnected solutions across your whole organisation to find a way through.
Think about how you can do that. Do your existing team or meeting structures make that easy to do? What conversations do you need to facilitate? Who needs to be involved?
Remember, your role as a leader isn’t to fix or solve everything – it’s to make sure everyone knows where they are going and why, and create an environment where they can succeed in doing it. Again, that hasn’t changed, it’s just the context and circumstances that are different.
3. Communicate like leaders
Generally speaking, the more difficult a time your organisation is having, the more, as leaders, you should be communicating to your staff about it.
If you are making big decisions about what your charity might or might no longer be doing, tell the staff, even if you don’t know what the outcome will be yet.
That might feel uncomfortable but just think about doing the opposite. As a staff member, how weird would it be, if, after all of the public and media discussion about the cost of living crisis and how it’s impacting everyone, the leaders of your organisation weren’t talking about it?!
Your staff know that you’re thinking and talking about it (or they hope you are) so be open about it, make it something they can get involved in, rather than a looming silence to be afraid of.
Even something as simple as telling your staff:
- We know there are some real challenges ahead relating to cost of living crisis
- We’re still working through what the implications could be for us and our beneficiaries
- We’ll be involving you all in discussions about how we might be able to do things differently to keep serving our beneficiaries the best way possible
- Whatever we do (as always) will be underpinned by our values and what our beneficiaries need from us
This will help give them confidence that you’re on the case as leaders and prepare them for getting involved in whatever plans they may be needed to deliver on once you have them.