How do you read your organisations financial performances? Look at them again from a different perspective!

 

Guest blog by Mike Jones, CEO of RemoteFD

When looking at your financials what do you see? You see income, expenditure, results and maybe you look at variances against your budget? Do you ever look at the numbers and think about how you purchase, select suppliers, and; what value your suppliers have brought to those particular set of results?  Do you have a way to measure this?

One area repeatedly overlooked by NFP’s, Associations & voluntary organisations is the strategic management of purchasing and supply.

When you begin to align your purchasing and supply chain strategy with the aims and objectives of your members and your organisation, you will start to reap the benefits, it can help you identify opportunities to add value for your customers or members, and, at the same time spot duplication, wastage and achieve savings without impacting the front line of your organisation.

Organisations can apply strategic financial management techniques to purchasing and supply.  One way to help is to follow a simple set of principles and set out a framework.  An example is one that can be reflected by the term, Buy smarter, buy together & be rational. This can be the start of organising your spend and matching this with financial management information to create smart data.  Smart data pairs together future planning with historical data to enable rational decision making with measurable outcomes.

This means;

• Analysing your spending behaviours by using smart data.
• Creating a culture of unity amongst buyers and budget holders in your organisation and listening to your customer or member community to point your organisation to those activities they derive the most value from, and finally;
• Set measureable objectives before major spending decisions and ensure that spend is always in line with the objectives, risk profile and growth ambitions of your organisation.

The objective is to focus spend on those activities that generate the most value for your key member or customer body, in other words, minimise or eliminate spend on low-value, low-risk activities and maximise the available budget on high-value derived activities.  My suggestion is to use a value & risk matrix.

The customer or member body derives value from the organisation’s activities, for example, through events, publications, use of its knowledge base, links & networking with other members.  You are able to assess, by listening to and recording data from the community about the value of activities on offer. Some activities are essential, some are strategic, and some are non-essential but they are adding value to the stakeholder body.  There will be some activities that derive little or no value to the membership body and carry a minimum risk to your organisation if the activities cease.

SHOWCASE

These purchases and services appeal highly to the member or customer body but may not be deemed absolutely necessary by the organisation.

These services derive high satisfaction from the member body.

STRATEGIC

These purchases are the most important ones in your organisation. They represent high value for the membership or customer body and a high degree of risk to the organisation.

ORGANISATIONAL

Items appearing here are necessary purchases that underlie and support the structure of the organisation.  It is the types of services that are not noticed until they are missing and seen as bureaucratic and administrative but critical.

SPOTLIGHT

Anything that appears in this quadrant needs to have a “light shined” on it. An assessment of why the organisation is spending anything in this quadrant is required.

By way of a final point, additions to the matrix are recommended to pinpoint strategies, but be noted that using such a tool is more than a technical exercise, it requires an impact at cultural level and how your organisation is governed. Remember, it’s not about spending less, it’s about spending better and in advancement of your organisation’s objectives and purchasing procedures & policies need to be structured to support the focused strategy.

Measuring the true value of your activities and what you procure is key to aligning your organisational growth objectives with those who value your organisation.  Listening and delivering high value derived activities will attract more interest and ultimately income, it will also allow you to identify to spot declining trends and where spend is wasted and no longer needed.

Mike Jones, CEO RemoteFD – Info@remotefd.com

The Social Investment Confusion

 

Social Investment has been around for quite a few years in the UK and yet we still don’t have a shared concept of what it is, or who or what it is for. We constantly hear that investors can’t find enough quality social investment propositions and yet we also know that VCSE organisations are in need of capital to invest in the sustainability of their organisations. It’s not because there is a lack of entrepreneurialism. So where is the disconnect happening?

In this guest blog, Phil Caroe, Allia’s Director of Social Finance, offers his views on where the misunderstanding might be.

 

Evidence suggests that charities and social enterprises are generally pretty confused by social investment. The one thing that is clear is that it’s not the same as getting a loan from the bank, because bank loans have been available forever and the ‘social investment market’ is apparently some new thing that Big Society Capital and a bunch of ‘SIFIs’ are busy trying to build.

And therein, I believe, lies the problem. So I’m going to go out on a limb here and say something potentially controversial: the fact that we talk about this concept of ‘social investment’ as a type of finance raised by charities and social enterprises is, I suggest, one of the main barriers to them getting involved.

First, debt is often a scary enough word as it is. The idea of getting into debt in order to pay for stuff you couldn’t otherwise afford and putting your organisation and your beneficiaries at greater risk doesn’t always, unsurprisingly, sit that comfortably with trustees. Now introduce a new and unfamiliar concept called ‘social investment’ as an alternative to conventional finance, and you can appreciate how the comfort zone is getting left even further behind. Add to the mix the political rhetoric of social investment offering salvation for the sector at the same time as deep funding cuts and the proliferation of ex-City people trying to offer you finance, and you can see why social investment hasn’t always been whole-heartedly embraced.

The second issue is that it’s not always clear what to expect from investment with a ‘social’ label. Sometimes what investors mean is that it’s finance exclusively for social organisations. But investees may interpret the label to mean that there’s something different about ‘social’ investment compared with ordinary commercial investment – perhaps a willingness to accept lower returns and longer timeframes, and to not mind so much if it all doesn’t work out and the money can’t be repaid. So you can also understand the frustration from investees when some sources of ‘social’ investment turn out to be much more commercial than they expected.

My proposition therefore, radical as it might sound, is that we stop talking to charities and social enterprises about raising social investment as a type of finance. We stop giving the impression that social investment is a thing with definable characteristics, and instead simply talk about how repayable finance could support their mission. We explain how there is a spectrum of different investors and lenders – from banks to venture philanthropists – each with their own mix of social and financial goals. And some of these might describe themselves as social investors.

Wellbeing in the workplace – reducing stress of charity employees

Guest blog by Ian Bird, Founder of the employee communication portal Mybenefitsatwork

In general, charity employees tend to feel more job satisfaction than other professionals, as they usually work for a cause they are passionate about. In fact, a recent study¹ highlighted that 35% of charity professionals are more likely to have experienced a sense of achievement in their job, in comparison to the average UK worker.

This is a positive statistic for the charity industry. However, it’s equally important to mention that the charity workforce is also 25% more likely to have experienced stress. So, I wasn’t surprised when I learned that 80% of charity employees said they have experienced stress in their current job – a very high number.

Stress in the workplace could be associated with a number of reasons. As a charity employer, I’d argue that it’s essential to adopt a holistic approach to employee wellness and wellbeing in order to tackle this issue (if you don’t already); the focus should be physical, mental and financial.

Putting a wellbeing programme in place is a great start, but it’s not just a case of selecting an attractive sounding list of benefits. You need to choose benefits to help build a healthy and happy workforce, such as flexible working or gym memberships. Employee assistance programmes, for example, are designed to help staff deal with any issues before they become more serious. It’s also important to consider protection measures for employees, so they are supported financially during long periods of absence.

Once this is done, the next step is to communicate your wellbeing programme effectively to your workforce. And a regular multi-channel approach to communication is best. After all, if your people don’t know about it, and feel that they benefit from it personally, they can’t and won’t appreciate it.

According to our research², 89% of charity employees would be more loyal to their employer if they understood their benefits. It is therefore vital to develop and maintain a communication strategy to keep a workforce fully engaged.

On Wednesday 5th October at 11am, Mybenefitsatwork will be hosting an exclusive webinar for ACEVO members: Combining employee wellbeing with effective communication.

The webinar is designed to provide HR and those responsible for implementing benefits at work with some learning objectives, these are centred around:

• Wellbeing in the workplace, and boosting a wellbeing strategy.
• The latest research on mental health.
• Communicating a wellbeing programme effectively.

You can register for the webinar by following this link: http://mybenefitsatwork.co.uk/acevo/wellbeing-webinar-acevo

Lean more by visiting our website mybenefitsatwork.co.uk or call 0345 838 8380.

Mybenefitsatwork is a trading name of Foster Denovo Ltd, which is authorised and regulated by the Financial Conduct Authority.

¹Wellbeing in the workplace research 2016 – Charity comparison: http://recruiters.theguardian.com/blog/wellbeing-in-the-charity-sector
²Mybenefitsatwork whitepaper:http://mybenefitsatwork.co.uk/acevo/charity-white-paper

A shot in the arm for head AND heart

Ahead of our 2016 Annual Conference, details here, Rachael Romasanta reflects on a practical application of the dichotomy between heart and head.

Head or heart?  Heart or head?  Which is best?  It’s something people have grappled with for centuries, and no doubt will continue to do so.  And they will continue at ACEVO’s November conference, talking about the benefits of partnership working with ITN which perhaps creates a great argument for a bit of both.

Whilst heart has played a huge part in the growth of the charity sector since day one, it might be seen by some that “head appeal” has dominated in business.  But I detect shifting sands in the commercial world right now, surprisingly thanks to the arrival of new legislation.  It may be slight.  Or it may just be me, but “heart appeal” is winning ground in the commercial world and can be seen to be bringing together charities and the insurance industry. This month.

On 12 August the Insurance Act of 2015 finally went live.   Perhaps not in everyone’s diary, the Act is there to foster better working relationships between businesses, including charities and insurers.  It’s there to make sure that both parties know what the relevant cover entails.

What interests me though is the shift away from the current somewhat clinical, in-or-out approach to what is disclosed when setting up insurance.  In short, you (as the buyer) had to declare pretty much everything which could bring risk and if this hadn’t been specified before the cover started then getting claims paid could become difficult.

Now, under the new Act, it recognises that risk is indeed uncertain.  It is still expecting you as the insurance buyer to make every effort to reveal the realities of the risks in your charity, but it accepts that in the real world some risks arise undetected.  It recognises that you can give a very fair presentation of your risks, yet still get caught out and for that reason you should still have the benefit of cover.

It’s an admission that the head cannot do everything alone and balancing that with some heart results in a better solution than the old, binary in-or-out.   In the case of insurance it means the intent of the wording is now as good as its technical specification.

But as in all partnerships, it takes effort from both sides.  So whilst you can fully expect to benefit from the Insurance Act there is an obligation upon you to disclose what you know, or ought to know, about your charity and its activities.  You should conduct a reasonable assessment of the risks and you must open your doors to insurers’ probing questions.  Provided you do that, then the two way process has been followed and both parties are in a better place to work together.  Both parties are also likely to have more accurate expectations too, and together they have created effective, fair protection which works for both.  And that’s a good thing as far as I can see.

Rachael Romasanta, Account Manager (charity insurance), Endsleigh Insurance Brokers Ltd

https://www.endsleigh.co.uk/media/1334059/Content-Disclaimer.pdf

Health, Safety and “Pokémon Go!”

Guest blog by Martin Crowther, Health, Safety and Quality Technician at Ellis Whitam.

Pokemon Go! has become a worldwide phenomenon in recent weeks, with people of all ages being attracted to the game. However, reports have appeared of gamers putting themselves in danger whilst playing the game or causing hazards for others. As the game shows no signs of going away soon, questions have been asked about how safe the game is, and what needs to be done to control the risks.

What is it?

Pokemon Go! is a free phone app from Nintendo. Users play by using their phone to catch various creatures from the Pokémon franchise, which are visible through the app and have been “placed” electronically in locations by the game. The game uses GPS tracking to plot the location of a user, and users go from location to location to hunt these creatures.

Whilst the game has been praised in some circles for getting users to exercise more, there have been incidents where users have wandered into restricted or dangerous areas in search of these creatures. Children have been reported trespassing on railway lines whilst playing the game, and outside the UK there have been reports of drivers playing whilst driving, pedestrians wandering into road tunnels and even players entering minefields whilst playing the game.

What do I need to do to protect my organisation?

Firstly, you can always ask for Nintendo to remove your premises from the locations that the game uses. That should prevent the majority of players from attempting to enter your premises in search of Pokémon, although some more persistent players may still wander on site whilst playing the game. These players are less likely to be aware of site hazards and be paying more attention to the game than to their surroundings, so it is difficult to anticipate what they may do. The easiest way to cover your responsibilities under health and safety law is take precautions as if they were any other kind of trespasser. Any measures you take to protect visitors (authorised or unauthorised) from site hazards should be sufficient to deal with any roaming players.

Your staff may also be distracted at work by the game, whether by playing when they should be working or just playing the game on their breaks. Just like members of the public who play the game, your staff may not be paying the appropriate amount of attention to site hazards if they play whilst on site. A simple reminder to only play the game in designated break areas may be sufficient if you already plan to remove your premises from the game, but if it becomes a particular problem then you may need to consider more authoritative action.

Alternatively you may view this game as an opportunity to drum up business, as some enterprising restaurants, coffee shops and other food outlets have done. Advertising your organisation premises as a location that the game uses can be a good way to bring in new visitors and potentially raise awareness of your organisation, but you should still risk assess and take precautions against visitors who may be more focussed on the game than the hazards around them.

 

However you choose to deal with this new phenomenon, it is becoming increasing difficult to ignore the game’s influence. Perhaps in years to come it will become little more than a curious relic in risk assessment records, but for now it is far better to be prepared.