Meet our Expert
Laura joined NCVO in 2009 to manage the Sustainable Funding programme. She manages relationships with sector experts and private sector partners to create NCVO’s training and direct support on funding and finance, including specialist training on trading, tendering and marketing, and our popular Sustainable Funding Conference.
“Are there any quick wins for increasing our cash flow?”
Lots of charities ask about where to find funding, and how to access new income. But generating new income or finding new donors can be a very long process. If you need cash quickly, we’d always recommend that you start with looking at where you can save on what you’re doing already.
Here are some ‘quick wins’ for increasing your cash flow:
1. Understand your costs. Review your budget and make sure you know exactly what you need – is there anything that you don’t need to spend, or can spend less on? If you have a big grant or regular donations, it can be tempting to focus on spending rather than saving. So you may not know you have an underspend until late in the financial year, when there’s little time left to use the money wisely.
You should look at your budget at least once a week. Take a note of how much you have remaining, and how much time you have left to spend it. By regularly reforecasting your budget, you can plan ahead to use any spare cash.
2. Switch your utility suppliers. When was the last time you checked that you were getting the best deal on gas, electricity, phone lines or broadband? Try to do this at least once a year. Ask about discounts for loyal customers or for charities.
You should also check that you’re getting the most out of your bank account – are you benefitting from an interest free overdraft or in-credit interest? Contact specialist banks for the voluntary sector like CAF Bank, Triodos, Unity Trust and Charity Bank to find out what they can offer.
3. Take a resource raising approach. Think about what resources you could get in-kind or for free. Plan this resource-raising into your fundraising strategy, to lower your cash targets. For example, you might need new office furniture and equipment – use web groups like freecycle to find anything from furniture to paint to pot plants.
If you use an expensive accountant or lawyer, check whether of your staff, trustees or volunteers have contacts who could offer this pro-bono.
4. Tell people what you need. If you need new resources, equipment or space – use social media like Twitter, facebook and LinkedIn to get the message out there. A quick tweet asking if anyone has a spare training room may come up with nothing – but if the right person sees it you’ll save a few hundred pounds.
5. Try cloud computing. Cloud computing companies can offer ‘hosted desktops’, significantly reducing your IT costs by running your IT services remotely. Online tools like yammer and Google Docs can increase staff collaboration without the need for meeting rooms or phone calls.
6. Skype. Use Skype or other internet-based voice platforms to make phone calls and hold teleconferences. Video calling is free, and calling telephones is often cheaper than using a standard phone line. Reduce travel costs by ‘meeting’ online.
7. Keep on top of your financial management. Send invoices promptly and chase them up if they’re unpaid. Make sure you know what you’re owed, and get cash into your bank account as quickly as possible. Equally, pay your debts promptly and others will return the favour.
8. Share and swap. Could you offer a quick training session or unused equipment to your neighbours? Is there anything they could swap or lend to you? Use Timebanking UK or a local timebank to find out what you could swap in your area.
9. Reduce energy use. Turn off appliances overnight, recycle and reuse, and get hold of some energy saving light bulbs (you can often get these for free from the council or a local environmental initiative).
10. Get group discounts. Membership organisations like NCVO offer negotiated group discounts for services from pensions to printing – particularly useful if you’re a charity with branches or your own members.
Also check whether you can get group discounts on train or bus travel. Some networks also offer charity discounts if you open a business account.
11. Get out more. Find out if there are places in your area you can meet, collaborate or access Wi-Fi for free. This might include libraries, cafes, museums or parks – you might find you don’t need so much space in the office after all!
12. Find opportunities for joint working or sharing overheads. Do you have a partner that you could share office space with? Could you negotiate a group discount on payroll or IT services?
13. Get the most out of your board. Are your trustees giving you what you need? As well providing leadership and taking responsibility for governance, your trustees can be proactive in contributing skills and time to the charity. Do you need some with legal or financial expertise? Are you going through a restructure and need someone to help you with HR? Do your trustees know what non-cash resources you need?
If your board don’t know what you need, they can’t help you. Communicate with them and be specific about what skills and contacts they can contribute.
14. Get VAT smart. This is one of the most complex financial issues for charities, but often one where we lose most money, simply because it’s so mind-bendingly difficult to understand what you can claim back and what you need to pay. If you can afford to invest in some specialist support from a VAT accountant, you might find you save thousands in the long run.
Sayer Vincent offer some great introductory fact sheets and training on VAT for charities.
15. Don’t get ripped off on rent. When did you last review your lease? Is your landlord putting your rent up? Make sure you look at comparable rents in the area and challenge the rate rise if you think it not in keeping with local rates. Ask your landlord to justify costs. If you have a good relationship with them, they may be willing to keep you on at your current rate rather than risking new tenants.
Finally, don’t forget that if you want long-term financial sustainability, you need to plan ahead with a clear strategy that links to your mission and values. Quick wins might help you in the short term, but they won’t replace a robust, well-evidenced income strategy.
Find out more about sustainable funding at: www.ncvo-vol.org.uk/sfp