Opinion: Down on your knees to the bank manager

Peter Cardy, chief executive of Macmillan Cancer Relief

One of the recurrent problems for small charities that want to grow or protect their existing services is how to move from dependence on major grants, or income from events, to regular income that safeguards their core activities. A good many charities are born on a wave of emotion that brings in a flood of income from high-profile activity - the horses or the dogs, a ball, a charity of the year or a personal challenge. The reverberations often bring more donations.

Sooner or later the first high tide of income starts to recede, but nobody wants to abandon the new services and the small number of staff that run them and manage the fledgling organisation. They have, however, become a fixed cost: also fixed is the optimism that the grant applications will come good, that a legacy will arrive, that a major donor will finally stop teasing and that a statutory body is bound to recognise the value of the new service and fund it.

All too often the money doesn't arrive when it's needed. Statutory funders can be as fickle as any private donor. Both local authority and central government grants can be slashed with a change of political administration or policy direction.

Wandsworth Council's reduction of grants to voluntary organisations had this effect a couple of years ago. The current delay in Department of Health Section 64 grants must be having the same effect among the many clients that have been tiding themselves over a until a project can start.

My deputy from three decades ago recently reminded me of the nightmare of the Manpower Services Commission's carousel of job creation programmes in the 1970s and 1980s. The rules changed abruptly, sometimes almost overnight: our business was adult education and we were naively happy to create opportunities for unemployed people. The commission's business was cutting unemployment - when the political wind blew from a different direction, we and many others caught colds. Grants were often delayed for unknown reasons and the inside of our bank manager's office, as seen from on my knees, became far too familiar.

Investment in stable fundraising, which may take two or three years to pay back, looks like a lower priority than the charitable mission in a charity's early days. It isn't easy to find the money, but the lesson is that if you don't invest, you're almost certain to find yourself on a switchback ride.

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