Introduction
“Will you redistribute power and resources in a meaningful way” was a question I asked at the end of a short talk I recorded for a podcast for In Touch Networks on 22 May 2020. With events surrounding the impact of Covid-19 on BAME communities and Black Lives Matter it seems prescient. I was asked to talk about the impact of Covid-19 on charities, particularly on governance and boards.
Charities and Covid-19
Many In Touch members are charity trustees or are considering such roles. For some it is pro bono work to “give something back”; for others it may also be a good development opportunity to complement, and in preparation for, a paid non-executive position in public or private sector. Let us start with the role. The Charity Commission makes it very clear that trustees have independent control over and legal responsibility for, a charity’s management and administration.
All should recognise that the charity sector is huge, complex and diverse. Indeed some not for profits are not even legal charities. Most charities are, however, small but a few have turnover in the hundreds of millions. So to talk about the impact of Covid-19 on charities is not simple and any such review should be non-specific pointing more to trends.
Before this crisis things were already very difficult for many charities. The recent State of Sector report by NPC found:
- Two thirds of charities they surveyed had changed their operations due to austerity. More 50% held public sector contracts reflecting the interdependence of the sectors.
- Whilst taking forward the digital agenda most were not confident that they were using it to full effect
- Big issues were on the horizon e.g. climate change yet NPC found that two thirds had not prepared for Brexit.
With Covid-19 it fair to say most charities are in crisis situation. There have been seismic shifts in a few months. For some there has been an immediate funding shortfall, with the lock down affecting income directly; sales in charity shops disappeared, fundraising events cancelled, reduced fees for services.
All have had to make service changes urgently to respond to needs of beneficiaries. For example, “Life After Hummus”, a Somers Town project in central London where I have been volunteering during the lock down, has shifted from health orientated activities, such as cookery classes, to provision of food and toiletries for vulnerable adults and families using surplus and purchased goods.
The economic and social changes brought about by Covid-19 will have long term effects on inequalities, on BAME communities and people with long term conditions who have been disproportionately affected. Life After Hummus has more than 50% of service users rom Bangladeshi and Somali communities.Intergenerational inequality affecting young people is also increasing with lost jobs concentrated on already insecure younger workers.
What’s the response of Trustees?
How does all this make trustees or aspiring trustees feel?
- Over-whelmed – in trying to support CEO and staff team yet fulfil oversight responsibilities
- Frustrated – the charity may not be able to meet the needs of beneficiaries quickly and effectively
- Worried – by the finances and long term sustainability along with concerns for staff and service user safety
- Excited – by the response of your charity to the demands for change and the innovative approaches being adopted
- Hopeful – that out of this crisis can come real change in society and that the big issues will be addressed
Grappling with New Challenges
Trustees are responsible for setting the strategy for the organisation yet NPC found that fewer boards in 2019 had had conversations on strategy than in 2017! Covid-19 has had the effect of accelerating changes that were already underway and the “good” and the “weak” charity will be exposed more clearly.
In terms of Board governance trustees need to ask if they are having the “tough” conversations for now more than ever these are required. Long terms funding models are certainly being undermined. One of my Trusts planned to generate additional income from letting surplus accommodation to fund its core costs. How realistic is this if more people continue to work from home? What effect will this have on the office property market and will rental income may fall? We will have to re-assess the risks going forward.
Charities need to ask how they will equip themselves to continue to deliver services and at the same time consider what new opportunities are emerging? Has the Board’s attitudes to risk changed? What are the implications of the shift to digital provision, for example, to online support in mental health services compared to face to face. Finally, there is a danger that as the recession follows the health crisis boards only talk about financial sustainability?
What actions should Trustees take?
Apply the same mindset to your organisation as you have to your personal life in recent weeks. How has your life changed? Then consider these questions:
- Ask are your governance structures fit for purpose? Governance expert Bob Garratt gave his well known book the title, based on a Chinese saying, “the fish rots from the head”. Success or failure depends upon the performance of the Board.
- Review strategy and objectives in light of the changing environment and the purpose that you as a trustee “hold in trust” – after all that’s where the title comes from.
- In looking at the objectives ask is the Board clear in its appetite to risk? The new opportunities and new ways of working will raise very different issues.
- The financial health of the charity remains paramount; As I was once told “if you don’t manage the money; infact that’s all you will be managing” But take a broader view of sustainability; it cannot simply be about “cuts”
- There are great opportunities for use of digital technologies – yet only 23% of charities had digital strategies going into this crisis.
- The many new collaborations and partnerships that have emerged may point the way to better delivering the purpose in future. In one of my charity roles I am now co-chairing a working group with another not for profit with similar aims and similar sustainability issues, on the potential for collaboration.
- Finally, and most importantly; Covid-19 has disproportionately impacted on BAME and marginalised communities. Yet charities are weaker in these communities compared to predominantly white middle class areas. Charities must respond in ways that challenge this dominance.
Like so many I have been active in a mutual aid group in London and this model of community response outside of the old formal structures highlights a real sense of solidarity and community concern that can be harnessed. For the more established charity, trustees should be challenged when they consider their response to these hallenges – “Will you redistribute power and resources in a meaningful way?” This means rejecting conventional views of “charity” and re-directing money and its control to previously excluded groups, particularly BAME communities..
Conclusions
Covid-19 has resulted in many big questions for Charity Boards and Trustees. Trustees need to make sure they understand their responsibilities. Aspiring trustees must appreciate the differing legal and governance structures of a diverse sector when they seek a trustee role. A trusteeship is not to be taken lightly. Infact, its certainly getting harder.
Find out what’s happening in the wider society, in politics and the economy and put your knowledge and experience to work on your board. This is the time for system not incremental change. Finally. follow your passion and excitement.
This article is based on a podcast recorded for In Touch Networks, a professional development organisation for non-executive directors. It was broadcast as part of Series 2 Episode 5 of “In Touch Business “Planning in a post-pandemic world” in June 2020.
“http://www.lifeafterhummus.com/Life After Hummus” continues to assist more than 200 families and individuals in Somers Town, Kings Cross and Regents Park. It costs of £800 a week to purchase healthy items such as fruit and vegetables as we cannot necessarily rely on surplus or waste food. If you would like to help contact me.
https://www.linkedin.com/pulse/you-redistribute-power-resources-meaningful-way-how-derek-mcauley
Derek McAuley 