These are tough times for charities. Public spending cuts are kicking in, there is increased competition for private funding, and many charities are seeing growing demand for their services. Indeed, we expect to see the charity sector's income drop by between £3.2bn and £5.1bn as a result of cuts to government funding.
It is hardly surprising that charity leaders are feeling the heat. Acevo, the Association for the Chief Executives of Voluntary Organisations, recently reported that they have seen a huge increase in the number of calls to their Chief Executive in Crisis helpline over the last year. In many cases the crisis related not only to the chief executive, but to his or her relationship with the board. As Acevo's acting chief executive, Peter Kyle, noted, "The root cause of most of these calls was ultimately an issue with governance".
This highlights two important points. First, that charity chief executives face growing pressures and may need more support from their trustee boards. And second, that the relationship between the board and the chief executive is pivotal, so the breakdown of relations between the two can tip a charity into crisis.
How can trustees make sure they provide effective leadership and avert crises? Our new report, Stories from the Boardroom, looks at how trustees who attended recent seminars held by New Philanthropy Capital (NPC) and The Clothworkers' Company are rising to the challenge.
When a charity is going through a period of change, trustees may need to invest more time and energy in supporting it, while also being mindful of what one trustee described as "the fine line between governance and interference". Trustees need to be flexible and willing to respond rapidly to urgent issues, rather than waiting until the next board meeting. They must also make sure that they are up to speed with developments. This is no mean feat in a fast-changing funding environment and they will need to check that they are looking at the right level of information in board meetings. But the relationship between the chair and the chief executive is also critical, as that is likely to be the main channel of communication between the board and the executive.
Trustees at our seminars emphasised that when the news is bad, boards should step up and take responsibility. For instance, announcements about difficult cost-cutting decisions may be more palatable coming from trustees, as they are more distanced from day-to-day life at a charity.
Boards should be sensitive to the pressures executive teams are facing, but they also need to maintain their focus on the bigger picture. Part of the board's role is to ask challenging questions – or, as one speaker at our seminars put it, "to think the unthinkable". Like Tomorrow's People, many charities have had to review their priorities and ask questions like: which of our services are sustainable and which achieve the greatest impact for the people we support; can we find new funding or do we need to scale back our work; or could we maximise our impact by working with another organisation?
These questions are not easy, but they are crucial if charities are to survive and even emerge stronger. As one trustee commented, 'Be prepared to change' might be a good motto for the moment.
Clare Yeowart is a senior consultant at New Philanthropy Capital and the author of Stories from the Boardroom and two other publications for charity trustees
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