As 2021 gets underway, the environment in which charities and social enterprises operate appears to be even more volatile and uncertain than ever. Covid-19 restrictions have been changing almost weekly and, despite the hope offered by the vaccines, there is little sign that these upheavals will end any time soon. All this is on the back of an exhausting 2020 that has tested the resilience of many organisations to its limits.

Reflecting on the support we provided to clients in 2020, particularly in the areas of medium term planning, governance and fundraising, we have been thinking a little more about about what makes organisations, particularly small organisations, resilient.

Back in 2019 we developed a simple assessment tool for organisational sustainability. It still works well but which we think needs further development to emphasise key aspects of resilience when working in a highly volatile context. As we’ve worked with clients on their plans for the next year or two, we have come to the view that there are a number of critical attributes to a resilient organisation, and only one of them is finance.

Of course, there’s a lot that comes under the heading of “finance”, but for the most part it is the people and relationship strengths of an organisation that determine key financial outcomes such as income security and diversity. As we see it, the key attributes of a resilient organisation are summarised in the diagram below.

In the fast-moving, challenging environment in which charities and social enterprises are currently working, these “softer” factors will, in our view, be the key determinants of whether an organisation can survive and thrive through and beyond the crisis. They all, ultimately hinge on the human capital in the organisation (the capability and capacity of staff, volunteers and Trustees) and the quality of the relationships they have with people in other organisations (and hence the reputation of the organisation).

Therefore, while every organisation’s situation will be unique, this points to the critical importance of sustaining, and bolstering, human capital, even if the financial pressures point towards scaling back expenditure. To do this, Trustees and Directors will need to take some calculated risks (e.g. by investing a proportion of reserves or by scaling back some frontline services to sustain strategic capacity).

A seductive, short term approach of “cutting overheads” (including strategic and development capacity), might help in riding out the immediate crisis, but then what? How will the organisation climb back out of the hole into which it has retreated? How will it grasp any opportunities the crisis presents for doing things differently and responding to new or changing beneficiary needs?

Our top line message, therefore, is that the leaders of many organisations will need to have the courage to take tough decisions to ensure that their charity or social enterprise doesn't simply focus on narrow financial management at the expense of meeting changing beneficiary needs in creative new ways, both now and into the medium and long term.

We would be delighted to work with any charity or social enterprise to help you build the resilience of your organisation and plan for an uncertain future. To find out more about this or any of the issues raised in this article, please contact us at julian@almondtreeconsulting.co.uk to arrange free initial telephone discussion.