We all benefit when we have a thriving and sustainable charities sector where New Zealanders understand, trust, and have confidence in charities. Now, more then ever, there may be a raft of important questions that your charitable organisation may be seeking answers to, such as:

• What does the disruption caused by COVID-19 mean for your charity?
• What should we prioritise in this post COVID-19 environment?
• How do events in the commercial world impact your charity?
• How do events in everyday life impact your charity?
• What are the critical decisions that the charity needs to make now? If any?
• What does your charity’s ‘new normal’ look like?

Only you will be able to answer those questions. So, if you haven’t already, get your board and stakeholders together and work through those questions to be able to move forward with focus.

Key factors

Charity recovery is dependent on four key factors:

• Planning, leadership and strategy
• Cashflow
• Tax (yes, tax)
• Collaboration

Looking at these four factors, what exactly should you do?

Planning, leadership and strategy

We know everyone is sick of hearing statements such as ‘pivot’, 'flexing your operations' and ‘exploring new opportunities’; however, now is the time to take those concepts seriously and focus on the longer term.

Ensure you engage in an effective planning process to help your charity clarify its vision and core values. Create a clear and concise plan for your charity and its future.

Set solid and realistic strategies and define specific goals for achieving them with a 90-day action plan. This should address the following:

• Ensure you review the charity’s strategic direction including its mission, objectives and charitable purpose
• Get clear on what has changed. Has the fundraising landscape changed post COVID-19? Or is it business as usual; for example, with gala dinners and concerts?
• Align goals among trustees and be  clear on what you seek to achieve or influence
• Ensure your outcomes are aligned with the purpose for which your charity was established
• Identify your key performance indicators and key success factors
• Identify critical challenges and opportunities in your charity and the actions required to resolve or maximise them
• Set time frames for achieving goals
• Identify what support and resources you will need to achieve your goals
• Ensure you have a clear reserves policy. Has the reserves policy been flexible enough to cope with the COVID-19 environment and the 'rainy day' when may have needed to access reserves?
• Ensure you understand any changes in the labour market, such as the increase in people now wanting to volunteer, and consider how this will impact your ability to deliver your outputs e.g. the number of people you can assist or number of meals you can prepare

Now is a great time to develop a charity plan and set direction to achieve success! As someone once said, ‘never let a good crisis go to waste’.

Cashflow

Ensure you set targets and monitor your actual cashflow against your forecast. This will enable you to respond to changes within your charity and outside.

Cashflow planning is best practice in any charity and critical to survival and growth, especially now. Cashflow forecasts should be prepared for at least 12 months in advance and include profiling around bank balances including term deposits. Gaining an understanding of cash and liquidity will enable you to make better, more informed decisions. Understanding the difference between profit and cash is essential for your charity to be viable in the long-term.

Tax and other assistance

The temporary tax changes announced at the end of April, combined with other government and lender support measures, have been significant but how do these impact your charity given your charity is likely to be exempt from income tax? The recent support measures include:

• Wage subsidies
• Mortgage ‘holidays’ that aren’t holidays
• Financial assistance packages

Wage subsidies and mortgage ‘holidays’ extending until later in the year may in some ways be kicking the can down the road. There may be creating a false reality in terms of cash within the system and assuming too much about people’s willingness to keep giving once government support ends.

Ensure your cashflow forecasts include different best-case and worst-case possibilities for the next 12 months and allow for potentially fewer positive outcomes or scenarios.

You may be eligible for NFP financial grants from community organisations in your area. Make sure you’re aware of what assistance your charity could be entitled to, and take the steps to access these.

Collaboration and engagement are key

Now is the time to remember that communities are more familiar with their needs and expectations than outsiders. Examine ways to engage with different stakeholders to strengthen your knowledge of the post- COVID-19 environment. Brainstorm your options identify all your stakeholders and look at the channels/tools you can use to communicate with them. Virtually, socially, via your traditional platforms, in person or via a completely new channel? Which option will provide the most useful information and enable you to communicate your plans?

Things aren’t the same as they were, so focus on emergency needs now, and consider whether longer-term projects need to be paused until funding levels grow or until there is greater certainty around future funding.

Examine new ways to achieve your charitable purpose given other funding streams have, and may continue to, decrease. Establish what is needed in terms of follow-up activities and communications to ensure that prior commitments can be achieved, and potential new opportunities are secured.

Do you need help?

Baker Tilly Staples Rodway works to create enduring success for our clients and works with a number of charities to build capability to effectively deliver on their charitable purposes. We share the common goal of ensuring that we have a thriving and sustainable charities sector where New Zealanders understand, trust, and have confidence in the charities they support.  Contact your Baker Tilly Staples Rodway advisor for assistance.