Restructuring common among small charities, study reveals

More than a third of small charities have restructured in the past 12 months to remain competitive, a major study has revealed.

The finding forms part of the Small Charity Leaders Insight Report, an analysis of the biggest challenges and commercial issues expected to face charities in 2020.

According to the paper, “change is prevalent” among small charities, with 37 per cent of organisations having restructured this year to remain viable.

Around half (51 per cent) of those who have undertaken to transform their business model say building partnerships with the commercial sector is the “most pressing skills requirement”.

Addressing diversity issues, meanwhile, is cited by 48 per cent of charity leaders, with a further 28 per cent saying they plan to do so in the near future.

The most common motivation, however, is to cut costs or build resilience. Mergers, for example, are effective among small charities who could benefit from combining major head office functions, such as finance and HR, to reduce overheads.

Whatever the incentive, it is important to engage with stakeholders and staff throughout the restructuring process. This is especially true when taking into account the legal elements of a restructuring plan, such as redundancy or the transfer of ownership.

Commenting on the report, lead author Philippa Charles, Director of Garfield Weston Foundation said: “The resilience of small charity leaders is remarkable and should be celebrated. Smaller charities tell us they struggle to find the time and money to invest in long-term strategy but they also fear the risks of failing to do so. That is why we are providing a package of leadership support and funding for ambitious charity leaders through these Awards to help them to help more people long into the future.”

Co-author Gillian Murray, Chief Executive of Pilotlight, added: “It’s incredibly tough for small charity leaders to find the time to plan for long-term improvements whilst dealing with day-to-day frontline challenges but there’s lots of evidence that doing so can transform a charity’s fortunes.”

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