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Some simple and more challenging suggestions for cutting and controlling costs across your organisation. To ensure that you survive, you may need to make some big decisions. Here's how to look at your services and income to make significant changes.
This how-to guide is based on the Guardian Voluntary Sector Network's Q&A in June 2011.
Some small changes everyone could make:
Focus on sustaining services rather than keeping jobs. Consider stopping some services completely rather than reducing all, don't make preserving the shape of the organisation your greatest priority.
Evaluate which of your services are most effective and concentrate on these. Do this by understanding your impact and / or assessing your social return on investment.
Challenge finance staff to make cuts, this could include getting them to source more quotations and review accountancy practices.
Review your assets, especially property - are they costing too much, could any be sold?
Don't cut on quality, for example don't reduce the cost of your audit or legal advice if it means that you get the office junior instead of the senior partner that you have come to expect.
Focus the majority of your time on sourcing income not cutting costs. Cost control is important but many organisations spend too much time on it for diminishing returns. Use the 80-20 rule (or even 90-10): spend 80% of the planning time on where the income is going to come from, not where you will save the costs.
Get advice about how you can claim additional Gift Aid on your donations. Many organisations miss out on this income.
A recent ACEVO survey found that about 90% of those interviewed said that mergers have fulfilled their intended benefits, with the most common motivating factor being efficiency. Here are some examples of positive collaboration:
Have a strategy and a back-up - A lot of people are having difficulty planning ahead with so much change affecting them, but it's really important to maintain a vision of what you're trying to do and where you want to go. Putting together some different scenarios for different levels of income is really important - what would you keep if you had 25% less income than expected, or 40% less? It is difficult, but be prepared to cut in areas that aren't in-line with your strategy.
Be realistic about what you can achieve - Performance and an understanding of capacity are important - knowing what your staff can do and what your organisation's capacity is means you can be realistic about what you can achieve and at what cost.
You need a strategy for making cuts - Take everything back to strategy. If it's not a corporate priority for your charity and it costs money, don't do it.
Reproduced with kind permission of Guardian Voluntary Sector Network. See the full Q&A on cutting and controlling costs from 2011. The network ran another Q&A on cutting costs in May 2012. The best bits round-up includes advice on collaboration, property management, marketing and governance.
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