Soil Association major donor crisis

The Soil Association has made 17 of its 120 staff redundant in a bid to plug a £600,000 hole in its finances.

The charity is expected to record a loss in 2007/08 after expected donations from two major donors failed to materialise. This will be the second year running that the charity has made a loss.

All the staff losing their jobs took voluntary redundancy. Those chosen were among 40 who applied to leave under such terms. The positions will be lost across all areas of the charity.

The redundancies will not affect Soil Association Certification Limited, the charity's trading arm, which employs a further 100 people and runs the association's organic accreditation scheme.

Roger Mortlock, general secretary of the Soil Association, said the organisation had no choice but to reduce its staff numbers in the face of the deficit.

"We had to make some adjustments to our cost base because we were facing a tricky situation after a couple of key donations that we were expecting did not come in," he said.

"We rely very heavily on major donors, and you only need a few of those not to come good to skew a budget like this quite dramatically. The challenge was to make up a balanced budget for next year, because we were £600,000 short.

"It still looks like we will make a loss in this year's budget, but we had to come forward with a balanced budget for next year - and we had to do that by reducing the head count."

The charity would have to curtail some of its activities as a result of the staff cuts, said Mortlock.

"There are some events that we will not be doing to the same level, and some reports that we have had to look at postponing or shelving," he said. "We cannot do as much with 17 fewer people in the building, so we had to cut things back."

Mortlock admitted staff morale had suffered. "I am not going to pretend it is the best it has ever been because these things are not easy, but we are in a strong position moving forward," he said.

The charity has started to focus on increasing its public membership base. It is targeting people who would make smaller donations in a bid to make it less reliant on major donors.

"We are increasing our face-to-face recruitment activity," said Mortlock. "We have just introduced a scheme for people who will give £1,000 a year, which has been very successful. We have generally gone for people who give more than £10,000 a year."

The charity had also abandoned plans for a new headquarters, but the building is back on track after a major donor made a contribution.

Mortlock said the association would be recruiting for a handful of new jobs as it restructured.

Fact file

The Soil Association was formed in 1946 to promote organic farming methods. It exists to "research, develop and promote sustainable relationships between the soil, plants, animals, people and the biosphere, in order to produce healthy food and other products while protecting and enhancing the environment". Its trading arm certifies more than 70 per cent of organic food sold in the UK.

Comment

Risk in fundraising management has rarely been explored, writes Gill Wootton. The Sorp requires charities to report on organisational risk, but little of this relates to fundraising.

Dependence on one type of income, or even on one funder, is high-risk. The solution is obvious: diversify. Diversifying brings its own risks, particularly when moving into new areas. Proper planning is vital: speak to other charities, read all you can and get training and advice.

Build risk management into fundraising planning. Start with a risk audit assessing which risks the charity is most exposed to.

Actions to manage or remove particular risks can then be specified in the fundraising strategy, and progress can be reviewed regularly.

Organisations without experienced fundraisers or with fundraisers who have been in post a long time might benefit from external advice.

- Gill Wootton is a director of Wootton George Consulting.

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