pricewaterhousecoopers presentation to the helplines association 6 april 2011
DESCRIPTION
TRANSCRIPT
The Helplines AssociationPlanning for change 6 April 2011
Who am I?
Slide 2
Ian Oakley Smith – Specialist in charity turnaround• Chartered accountant and Licensed Insolvency Practitioner• Specialist in turnaround and restructuring for charities and other
not-for-profit entities• Worked with wide range of charities and social enterprises, typically
small to mid-sized charities experiencing some sort of financial difficulty
• Part of the PwC Charities Team• A member of the Committee of the ICAEW Charities and Voluntary
Sector Special Interest Group
AgendaPresentation
The changing environmentThe importance of planningResponding to changeAsking the tough questions
Discussion
Questions
Slide 3
Key Messages
• The environment is changing like never before• Charities need to respond• There are both risks and opportunities• Planning and information are crucial• The success of the organisation may depend upon asking
the tough questions now
Slide 4
Charities must embrace the need for leadership –how can you influence this?
Slide 5
Wordle on Big Society from NCVO
The changing environment
The importance of planning
Risk touches every part of your organisationRisk assessment processes• Operational• Governance• Reputational and external• Environmental • Financial
(Charity Commission CC26 – Risk Management)
Slide 6
More than ever before risk needs to be properly addressed
Charity Commission publicationsCC26 – Charities and Risk Management
Slide 7
What is your risk appetite?
The importance of planning
Why do charities fail?
Slide 8
Predictable income flows
Unreliable income
Need to track trends in income
Most vulnerable position
Most comfortable model
Need to understand reserves policy
Flexible cost base
Fixed cost commitments
The importance of planning
Why do charities fail?
Slide 9
Predictable income flows
Unreliable income
Need to track trends in income
Most vulnerable position
Most comfortable model
Need to understand reserves policy
Flexible cost base
Fixed cost commitments
Actually, it is almost invariably....weak planning and financial
management
The importance of planning
Slide 10
Strategy
Scenario planning/risk assessment
Reserves policy
Managementinformation Governance
The importance of planning
Slide 11
Strategy
Scenario planning/risk assessment
Reserves policy
Managementinformation Governance
Important when things are going well – VITAL in a downturn
Responding to change
Slide 12
Sigmoid CurveFrom Charles Handy “The Empty Raincoat”
Gro
wth
/ pe
rfor
man
ce
Time
It’s hard to make change when
things look on the up
It’s much easier from a burning
platform
Responding to change – what are the options?
Slide 13
Plan ADiversify income
Plan BStreamline
Plan CFocus on core
Plan DCollaborate->close
Consider all possibilities to benefit your beneficiaries
Assess Risks
Evaluate Opportunities
Responding to change – assessing the options
Slide 14
Time is critical – how long does your charity have?
StreamlineDiversify income
Focus on coreCollaborate
Merge
Avai
labi
lity
of
optio
ns
TimeClose
Milestones
Responding to change – assessing the options
Slide 15
What are your charity’s core activities?
Core activities
Additional activity 1
Additional activity 2 etc
Fixed overhead
“Semi-fixed” costs
Discretionary costs
Asking the tough questionsWhy might your charity remain independent?
The right reasons?• To maximise fundraising
opportunities• The desire of one or more
individuals to create a lasting legacy
• To be more responsive to the needs of a local community
• The need to provide a specific service, perceived to be lacking previously
The wrong reasons?• If it costs too much to support
your beneficiaries• When you cannot take
advantage of opportunities• When survival becomes your
sole occupation• When you are less attractive to
funders• If your Trustees are in it solely
for egotistical reasons• If your strategy is influenced
by your key Senior Managers’ fear for their future or that of their employees
Slide 16
• Approaching the question with an open mind• Understanding the true cost of activities and overheads• Researching the market for potential partners• Benchmarking against other charities• Reviewing all areas of their costs• Making the best use of professional advice• Challenging the status quo and being strategic
What should Trustees and Senior Managers be doing?
Be prepared to have open conversations
Discussion
• We want you to move into groups to discuss the following questions:
• What responses are open to helplines looking to secure their future?
• How can you influence your helpline’s future?
• What other types of organisation might your helpline collaborate or merge with?
• We will then feed back and discuss as a group
Slide 18
Key Messages
• The environment is changing like never before• Charities need to respond• There are both risks and opportunities• Planning and information are crucial• The success of the organisation may depend upon asking
the tough questions now
Slide 19
Charities must embrace the need for leadership –how can you influence this?
Thank You