Charity sustainability is a big question. How do you keep an organisation going? It’s complicated. For some charities, closing might be the right option. Maybe they have achieved their missions or perhaps someone else is now better placed to take on their work.
For others, the risk is that the scrabble for money leads to mission drift, chasing funding that takes them too far from their charitable objects. Some face an annual struggle to balance the books in a funding context in which 20 charities take most of the available charitable funding.
The Youth Hostels Association has a network of about 150 hostels that provide affordable accommodation for travel and adventure across England and Wales. Maintaining this network for our beneficiaries comes with significant restoration and running costs. So how does YHA ensure a sustainable model?
There are two key principles that underpin good models of sustainability: mixed-income streams and long-term strategy. I have recently been reminded of both these at YHA through three very practical examples of our strategy.
First, we launched our fundraising appeal to save YHA Snowdon Bryn Gwynant. In its 70-year history Bryn Gwynant has provided access to Snowdonia for more than 500,000 people. We will restore the house, set up a dedicated fund to support breaks to Bryn for young people with challenging lives and establish the first YHA Campus: a pioneering work-skills programme to get young people into jobs.
The cost of doing all this is £2m. We cannot secure this from one single source.
The appeal must raise at least £500,000. Within this, we want to match a large donation, from those working to support tourism in Wales, with smaller donations from those who share our vision for this beautiful building and the opportunity for adventure it provides.
YHA itself has also committed to investing its own resources into Bryn Gwynant. We can do this because the decisions made in the recent past have centred on securing a mixed-income model and focused long-term thinking in pursuit of our charitable objectives.
Using social enterprise principles – good business practice – the charity generates an annual surplus. This surplus – from sales of hostel stays, from membership fees, from every lunch and drink served in our cafés – is reinvested both in our hostel network and in developing new services.
All our hostels – but particularly our larger ones – contribute to this mix. Decisions made some years ago to focus on trading and balancing small rural hostels with larger urban and "tourist zone’"places to stay mean we now have funding to invest in the Bryn Gwynant youth hostel. Combining this self-generated funding with donations means we have the best chance of saving Bryn Gwynant for the next generation.
This leads to the second reason for my reflection on charity sustainability. We have this month bought two more hostels: one in Liverpool, another in Newcastle.
These hostels give capacity to work with thousands more people a year and provide access both to the heritage in these two wonderful cities and to the surrounding countryside. But they will also contribute to the organisation’s surplus and ensure that we have funding to invest in future hostels, as we do with Bryn Gwynant.
The third factor in our sustainability strategy is in our Enterprise Lease model. Thirty hostels in our network are "Enterprise hostels" that lease the properties from us on a franchise basis, providing a source of income for us and maintaining provision for users. We are currently looking for Enterprise models for four of our hostels.
We make decisions on hostels based on a robust assessment of both the financial and the social impact return. In some cases that will be buying new hostels, in others it will be looking for a mixed-income generation model, and in some cases it will be looking for innovative new operating models, such as Enterprise Lease hostels, providing a source of income.
These aren’t easy decisions and the model evolves as we continue to learn what works.
This mix of funding combined with long-term thinking has helped secure YHA for the present and the future. Bryn Gwynant, Newcastle and Liverpool will all contribute to our immediate offer for all, particularly those who can benefit from travel and adventure the most.
With investment they will also contribute to our strategy ambitions as we launch our YHA Strategy 2020 Conversation Document. They will help provide a base as we move towards our 90th anniversary in 2020 and enable us to plan confidently for our centenary in 2030.
We want to use our firm foundations to increase both our reach and the impact we make, particularly for children and families who might benefit the most from staying with us.
Explaining a model where a charity sells services is not without its challenges, and this is something that we will be working on over the year ahead. But ultimately it makes us a more secure and sustainable organisation.
So whether people are donating to us, giving us a grant, staying with us or just popping in for a coffee, they can do so knowing we are a charity that uses every penny wisely and that they are contributing to adventure now and adventure tomorrow.
Anita Kerwin-Nye is director of strategy at the YHA