Craig Dearden-Phillips: Insolvent? Unsure whether to fight or give up?

If you're running out of energy, it's best to call it a day, says our columnist

Craig Dearden-Phillips
Craig Dearden-Phillips

I had to close a charity once. It was seven years ago and I had just taken over as chair after the loss of the chief executive and the chair within weeks of each other.

One look at the books and the remaining staff and trustees, and I realised it was game over. Not only had we run out of money, but also of the energy and desire to carry on. We were dead men (and women) walking.

I remember it well because it was the week I got married. Between suit-fittings and trips to the barber were meetings with suppliers, customers and staff to tell them that the end was nigh. People were surprisingly nice, their mood helped by the fact that we were not yet totally insolvent.

It was not a great time, but we brought things to a satisfactory close with money still in the bank and all of our people well looked after. We even managed a champagne-free celebration of all we had achieved.

To carry on or to quit? I suspect a fair few charities are facing this question right now. After suffering a nail-biting Christmas and new year, for many the moment of truth might have arrived.

What can be learned from my experience all those years ago? The main thing is not to look only at the bank account - that will be bad news anyway, I presume - but also at energy levels. Are you, and others, up for pulling through? Or have you run out of the physical and psychological resources to carry on?

If the answer is positive, you are still in the game, however bad things look. Approach your bank and your funders. Use whatever you have left in the bank to get help with a credible turnaround plan. Talk to your staff about the reality and plead with them to stay. Speak to potential merger partners (though you may have left it too late). Get your face in the media and tell the world that, like Gloria Gaynor, you will survive!

However, if your collective batteries are flat, then admit it and get on with bringing matters to a dignified end. Don't wait to run out of cash completely. Instead, pay off creditors, and inform funders and users. Help your staff to find new jobs and find alternatives for users. Your last pulses of energy should go into doing all of this - and doing it well.

As we pulled down the shutters for the very last time, yes, tears were shed. We were young people who had aimed high - and missed. And, yes, we felt guilty. Although we had been blighted by a run of bad luck - the loss of our leadership, a slam-dunk Employment Tribunal, the near-appointment of the wrong chief executive - we still blamed ourselves.

Seven years on, however, I can see events for what they were. We ran out of road and made the correct call. By being honest with ourselves, we ended up doing right by all concerned. Sometimes it is simply time to call it a day. The organisation is no longer a good use of other people's money. Keeping the patient artificially alive is not the right judgement. Let it die with dignity. And then have a bloody good funeral.

Contact Craig at craigdeardenphillips.com

Craig Dearden-Phillips is chief executive of Stepping Out and a Liberal Democrat councillor in Suffolk

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