Reflections on Covid-19: Finance and Management in the Voluntary Sector

by Paul Palmer, Professor of Voluntary Sector Management and Director of the Centre for Charity Effectiveness at the City, University of London.

As we enter into the fourth month from the official Covid-19 start date in the UK, it is now time to reflect on a variety of different financial and management topics relating to charities.

The first is income impact and diversity. After the 2008 financial crisis it was apparent that many charities had a deferred time impact. Those charities funded by longer term grants and contacts did not feel the cold air of austerity for a number of years. Clever ones, recognising that government funds would not be as plentiful were able to diversify their income sources into trading and service generation, for example conference spaces. The sheer speed of Covid-19 means that this time round that opportunity has not arisen.  Even worse, that conference or retail diversification – unless an online operation was established and functioning – was one of the first income sources to be affected.

The second reflection [impact] is more a mixed blessing. How many risk assessments and risk registers had mentioned and prepared for a pandemic? If your charity did I would love you to contact me and send it to me. Instead how many charities had spent lots of money employing accountancy firms and risk management consultants to produce useless documents designed to instead meet the tick box mentality. The charities that will survive will have had a robust risk-based reserve approach, underpinning a flexible business model. This combined with the collaborative leadership from Board and Executives has enabled scenario planning and decision making to be taken quickly to provide sustainability.  Sadly, much of the sector news already reads of charity closures and cutbacks.

The third reflection is how many charity leaders have sought out peer support and knowledge exchange. One of the most impressive features of the last few months has been just how good and responsive organisations have been in responding to the crisis by laying on online sessions which have enabled leaders to come together virtually. This includes my own Centre for Charity Effectiveness at City, introducing bi-monthly leadership coffee drop ins and running regular action learning sets to support charity leaders. Finance leaders experienced their Inspiring Financial Leadership course swiftly moved online through our efforts combined with those of Charity Finance Group and specialist charity accountants, Sayer Vincent. The Honorary Treasurers Forum was equally responsive in their support for Trustees. Hearing the experiences of those sharing has been painful at times, but it has provided a reassurance and a knowledge reservoir that has been vital in enhancing leaders’ understanding of how to navigate their way through this crisis

The fourth reflection is to say just how good some charities have been responding to this crisis. I am a trustee of the Hospital Saturday Fund a grant making health charity. HSF could have made the easy decision to say let’s not make grants. Instead backed by an impressive cashflow and financial impact case our CEO made a passionate case to the trustees on why grant making should continue and where it should be targeted.  Another charity where I am a trustee is UKCF. I have been staggered at just how good the Community Foundation movement has been in supporting and getting out grants in local communities.

My fifth reflection is wearing my academic hat of learning the lessons of history. The Coronavirus outbreak is the greatest challenge facing the world since the Second World War. During that conflict social researchers (the best known of which was Mass Observation) recorded the reactions and responses of the British people to that crisis. In the current crisis our students have been given the unique opportunity to create an historic record for the future. We will be covering key areas through the respective lens of our MSc students in Finance, Fundraising, Grant making and both UK and International NGO Management. We look forward to sharing this research with you.

Paul Palmer is Professor of Voluntary Sector Management and Director of the Centre for Charity Effectiveness at the City, University of London.

We hope you enjoyed this guest piece by Professor Palmer and hope that it gave you an opportunity to reflect upon the work your charity has been doing during the COVID-19 crisis.

This piece is one of many we will be providing in the coming months as part of the IG Voluntary Community Hub. We offer sector-leading policy events, leading best practice content and thought pieces from across the sector, IG Voluntary is here to support voluntary leaders and professionals improve outcomes and maximise the impact of all charities and NGOs. 

Visit the IG Voluntary Community Hub