When does 1 ≠ 1

There is a mathematical ‘proof’ that does the rounds every now and again which ‘proves’ that 1 = -1

It goes like this

Of course this is an incorrect proof. 1 ≠ -1

But in the world of charities and social enterprises 1 does not always equal 1

Money for a charity or social enterprise to achieve it’s purpose is always hard to find. Fundraising is a skill, a profession, and the people who do it, whether that's the CEO in a small charity or a dedicated fundraiser in a larger charity, are incredible. They work hard to get across the purpose of the organisation, to demonstrate it’s value, it’s impact, to convince someone to give them money to achieve their purpose.

All fundraising is hard. Some of the most difficult can be securing funds from government or the public sector. We’ve all heard the responses, “great project, but we just don’t have the money”. I’m writing this on a (blisteringly cold) Friday night in February. The night is unimportant, but the month actually has some relevance. Because at this time of year, public sector money doesn’t just trickle, sometimes it flows.

With the financial year ending, there is often a mad rush to get funds out, and at least some of this is directed towards charities and social enterprises.

Money for a charity to achieve it’s purpose is always hard to find, and yet every year, around this time either via National Government or Local Government, when repeatedly told for the previous 9 months that there is no money, there is a sudden influx of money. Great you may say, and yet, here is the kicker, it needs to be spent by the end of March.

All of it.

And monitored. And we want the outcomes you told us about 6 months ago…

So what to do. Turn it down? Take the money and figure it out?

You see this is where we get to it. This is where often 1 ≠ 1 because to deliver upon the funding could take a lot, and potentially leave the organisation and their beneficiaries in a worse position long term. Let’s think about what it takes to deliver upon some restricted funding, at a minimum

• Delivery staff
• Management
• Monitoring and evaluation
• Financial reporting

“Yes well these are costed in” I hear you say. Great, so they should be (along with a lot of other things I’d suggest) However for many small charities or social enterprises I would ask “ who has spare delivery staff, spare management, spare anything lying around?”

And this is the crux of the issue, they often don’t. And if they did, they’d be viewed as not efficient, or have too much in reserves.

Resilience — yes again

During my work on Resilience I’ve been using a simple approach to test whether something is supporting resilience, or getting in the way. It’s by no means perfect, however, it is based on 4 key words

Anticipate

Prepare

Respond

Adapt

So let’s run this through with some February funds

Anticipate - Could a charity/social enterprise have anticipated these funds would be available?

Well I’m writing about it happening every year, so maybe. But really. No

Prepare - Could a charity/social enterprise have prepared for this funding?

They could have carried extra capacity. Maybe run a deficit just in case. What’s that trustees? Oh. NO

Respond - Can they respond to this funding?

Probably. Charities are pretty responsive. But think about either the extra recruitment, administration, or pressure put upon the charity to do so because they care about the cause.

Adapt - Can they adapt to this funding?

Yes, probably. But what gets lost? What gets dropped? Who gets overworked? What happens if they have recruited when this funding ends? What happens to the beneficiaries?

Not all money is the same.

And so here we are. £1 ≠ £1 . The project that was costed out in May with a 3 month lead time does not cost the same as the one rushed through in February with 1 weeks notice.

Not all money is the same.

And if we want to build resilience we need to recognise this, as social purpose organisations and as funders and commissioners. None of this is easy. This isn’t about blame. The pressure on public sector budgets is real, the time lines and procurement rules unhelpful. But if we don’t work on this together, we will be forever in a dance that no-one knows the steps to, and in the end, we all suffer.