Like most big businesses, many charities and not-for-profit organisations have a board of directors, executives, HR personnel and a marketing department. They already have a lot of similarities in terms of internal structure, so why should they be run differently just because the end goal is different?
Successful charities have strategic plans, keep records and are subject to audits. To remain financially stable in today’s economic climate, a charity should conduct its operations with business-like standards.
When a business is doing well, consumers are more likely to see the value of the products. When a charity is doing well, donors enjoy seeing the contributions their money has made. Typically, charities have fewer resources and capital, which some argue makes it even more important for them to implement the right strategies. In order for charities to grow, sustained investment in their goals and values is vital. The strategy’s efficacy can be measured by how much money has been raised and how much good work this has led to.
The most effective way that a charity can save on running costs is by streamlining processes with adept leaders. Large teams of staff are not feasible for charities and can take money that is better spent elsewhere. Donors want to see the tangible results of their investments. More emphasis should be placed internally on the charity’s running to allow for the most significant charitable outcome making the strongest impact.
Any charity or organisation that receives money from donors should expect to be held accountable to those donors. Supporters have the right to expect that their money is put to good use. Charities should be able to offer proof of their contributions and the difference it has made to communities. A certain level of accountability comes from transparency. Offering financial records to the public domain is an excellent way to achieve this. Some charities may wish to be the subject of an informal external audit to prove that there is no misappropriation of charity funds. In fact, it may be useful to outsource all accounting services to maintain accountability. For example, Azets are one of a few examples of accountancy firms who specialise in working with charities and non-profits.
Management skills and experience is just as important as technical know-how. Leaders with the right qualities and skills should be employed. Charities can be hugely benefitted from the experience of business managers. Putting a spotlight on efficiency and outcomes will work for any charity just as it does for any business. Adopting sound business principles will make a charity more likely to achieve its goals. Many charities today resemble multi-million-pound businesses, with funding coming from lots of different sectors. As such, managers of these charities should have the skills and training to run an organisation of that size.
To operate long-term, a charity – especially new charities- should focus on achieving its intended outcomes whilst also making a surplus. It can be challenging to continue operations otherwise. Charities, unfortunately, are not just about donations to the cause; some expenses should be accounted for. If the charity is being run by someone who does not have the capabilities to balance revenue and expenses, it will fail.
For a charity to maximise the good work that it does, it has to squeeze the best value out of every pound that it receives. This means stripping back on all unnecessary costs and attempt to streamline operations better. These savings can mean more money being donated to those who need it. To achieve these goals, a charity must be run like a business.