Regulation with Rosie: Planning for windfalls

The Charity Commission's Rosie Chapman on planning for windfalls.

What would you do with a windfall? I know of a charity that suddenly received an unrestricted bequest of £500,000, which was equivalent to a third of its annual income. Great news, of course, but it also presented the charity's trustees with a huge dilemma.

That kind of money is too much to spend on things such as redecorating reception areas, but just investing it would waste its potential. The bequest actually became a real test of the charity's strategic planning.

It looked at all the areas of its work, at home and overseas, and all of its backroom functions, including data management and fundraising. The money had to have a lasting benefit, be used strictly in accordance with the charity's objects and be of direct use to its beneficiaries. A tall order.

The board kept its head. It used some money to complete a start-up project overseas that had been stalled by a lack of funds. That project will stand on its own soon, and its completion maximises the impact of the resources ploughed into it. The charity's fundraising function had been underperforming for some time because of poor data management. A new system was brought in, and future returns should enable it to pay for itself fairly swiftly. The rest was invested after the charity took advice on longer-term returns.

This organisation was confident it made the right choices. Its regular reviews meant it was clear where cash was needed to help it meet its strategic priorities and where money could be invested to generate long-term returns.

It's a useful exercise to evaluate strategic planning against best-case and worst-case scenarios. The difference between surviving and thriving may become just that bit clearer, and what's strategically important may be clarified.

- Rosie Chapman is executive director of policy and effectiveness at the commission.

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