How Trustees can lead recovery

17 August 2020 | By Niloufar Abhari

There has never been a more important time to be a Trustee and to contribute to the strong leadership that will help the charity sector to navigate this crisis.

There is no denying the impact that Covid-19 has had on the charity sector: it is estimated that voluntary income to the sector will decline 48% compared to last year, whilst an estimated 43% of UK charities are expecting an increase in demand for services.

There has never been a more important time to be a Trustee and to contribute to the strong leadership that will help the charity sector to navigate this crisis. There are several things Trustees can do to support their organisation through this pandemic and emerging from it.

Governance and Strategic Planning

Trustees are responsible for setting the charity’s strategic aims, objectives and direction, which includes identifying and managing risks that may prevent the charity from achieving its aims and objectives. Risk management has become an even more vital aspect of effective governance during the current crisis. Not least, as coping with a pandemic and future lockdowns now needs to be an integral part of charity risk registers.

There are a number of questions that a Board should regularly address:

What changes are occurring in the external environment and the wider voluntary sector?
What will be the corresponding challenges and priorities for the organisation?
What strategies should be adopted by the organisation to tackle these challenges and priorities?
How confident are you that these strategies will work?

During a crisis, it is easy at this time to become engulfed in day-to-day operations and fire-fighting. Boards must still carve out space for strategic long-term thinking and to be able to answer the question ‘how can we ensure our charity has a sustainable future 5 or 10 years from now’?

Trustees should also ensure that they are recording what they learn as they navigate the crisis. Much governance is derailed as charities are not careful enough to ensure that organisational memory is retained when Trustees move on.

Financial Management

The NCVO identified that much of the stress around crisis situations comes from the following elements:

Volatility: events outside your control
Uncertainty: unclear and unpredictable events
Complexity: dynamic environment with interconnected parts
Ambiguity: lack of certainty around causality and outcomes

In a panic, it can be difficult to separate the way that these different factors are affecting your charity. These terms are often used together, or interchangeably, but they warrant different board responses.

Volatility requires board to build flexibility and contingency plans.
Uncertainty requires investment in knowledge.
Complexity requires the engagement of specialists.
Ambiguity requires experimentation to build an understanding of causality.

When posed with a difficult situation with regard to planning, it can be helpful to identify which of these terms apply, or which combination. This can then be used to consider the governance responses required in a methodical and systematic way.

As a Trustee, you should also model your charity’s finances for different scenarios. What will happen if income drops by 50%, 75% or 100% for the next 12 months? Good scenario planning can really ground decision-making going forwards especially at a time of high uncertainty. Trustees can provide vital critical thinking around the prioritisation of projects. What could be put on hold for now, and how could existing funds be applied to critical projects? However, make sure you are doing this with designated, rather than restricted funds, or talk to a funder about changing restrictions on funding.

Fundraising

One of the areas of the charity sector most affected by the pandemic has been fundraising, with the sector projected to experience a £12.4bn loss of income compared to last year. Fundraising efforts will be more important than ever at this time. In terms of fundraising, charities should expect several secondary effects from the pandemic, including a reduction to the endowments of big grant funders and a future recession, so adjusting your fundraising strategy now may be crucial.

Charity leadership in wake of the pandemic will be challenging. However, strategic thinking and long-term financial planning will be key to effective governance. Despite the challenges that come with this crisis, there is a unique opportunity to rebuild a more inclusive, well trained and resourceful charity sector.

Cause4 suggests the following for Trustees leading fundraising:

Ensure approaches reflect how your organisation has been impacted by Covid-19, the need for your services in light of Covid-19, your new priorities, and how you intend to continue carrying out your work.
Clear and regular communication is key for maintaining existing funders. Be open and honest about your challenges and opportunities as an organisation, and how you are responding to them.
Future proof activities for digital and online as appropriate.

Sector Recovery

A sector crisis and disruption of the usual routine provides an opportunity for the charity sector to ‘build back better’ and challenge established norms. Trustees should:

Consider the strategies they have in place around key areas including sustainability, diversity, and inclusion, and whether they need updating or increased resources to ensure delivery of targets
Consult with staff and service users around where they would like to see change and their view on proposed models

It may become apparent that your charity is missing vital areas of knowledge and expertise - consider a skills audit when coming out of the crisis.