The importance of a strong charity business strategy during recession

4 Feb 2021

Generation Charity Consultancy’s Charity and business financial expert Shai Patel discusses the importance of a robust business strategy moving in to 2021 in increasingly volatile markets

A solid business plan is important in any climate, but during economic uncertainty and recession, it’s imperative. Strong finances underpin the success of any business including charitable organisations. Even with the best product or service, poor bookkeeping or financial organisation can be catastrophic. The pandemic has been difficult for many businesses including charities, as a loss of income for donors and fundraising events cancelled has resulted in a decline in donations. So, while the world is full of hope as Covid-19 vaccines start to take effect, we need to focus on how charities can navigate the coming months?

Importance of recession strategies: understanding the economic climate

The importance of recession strategies cannot be underestimated. We are consistently hearing doom and gloom predictions from financial experts about the economy’s recovery, which is expected to continue well into the next few years. The tricky thing about predicting how the economy will recover is that some parts of it remain hanging in the balance. Many factors are at play, including how effective the vaccines prove to be at limiting a third wave, how long the furlough scheme will be around for and what support will continue to be available for businesses as we move into summer, autumn and winter.

In order to better understand the effects on your market, it’s important to keep up to date with the latest guidance. While much of the pandemic remains unpredictable, there are certain patterns we see emerging as the situation progresses. The current Covid-19 roadmap is progressing well but things can quickly be derailed by new spikes and unforeseen developments. This means fundraisers should continue to prepare for socially distanced ways of raising funds. It also means that finance managers should be proactive in investigating government support options.

Preparing your business strategy during a recession

The key to creating a strategy for business survival during a recession is to be adaptable and flexible. This can seem counterproductive; after all, you’re planning to have to change your plan. However, this is crucial. In a volatile market, it’s key to keep an eye on how things progress. Don’t always be reactive, if you sense a change is coming that may affect your charity, explore the possibilities before the event happens. If you’re unsure, now is a good time to speak to a charity consultancy expert. Create internal processes to help streamline any changes. This helps to make uncertainty easier to deal with and can help reassure employees and beneficiaries. Invest back into the business wisely.

Don’t be afraid of change: Preparing business for recession

It’s important to focus and regroup during times of change. A good business strategy during a recession will put your priorities in order. Being forced to think differently or emerge into new markets / ways of fundraising can be the start of futureproofing. This isn’t easy so it’s crucial to gain buy in from all areas. Provide a supportive environment for staff and time to reassess what your mission is and how you can achieve it.

Recession planning for employees

During economic uncertainty, it’s important to undertake recession planning for employees. A recession is not only unsettling for charities and beneficiaries, but also staff members. The key is to communicate. No business strategy in a recession is complete without considering how you can preserve jobs and minimise impact on team members. Having your finances in order and thinking about potential unforeseen costs ahead of time can help with this.

At Generation Charity Consultancy, we know that a recession is a tumultuous time for charities, so if our experts can help please get in touch.

 

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