Steering a charity through financial challenges: reflections and learnings with Rebecca Young

At Ashby Jenkins Recruitment we have the pleasure of meeting with leaders from across the sector on a regular basis, these meetings and conversations are always a litmus test for how the sector is doing as a whole and 2024. Well, 2024 was tough. With the Centre for Social Justice citing over 900 charities closing in 2024, a rise in National Living Wage of 6.7% and Employer National Insurance Contributions rising to 15% from 1 April 2025 means continued pressure on charities to stay solvent.

As a specialist agency dedicated to the charity sector we always strive to share best practice and learnings from leaders. Through 2024 many people had to work through closing a charity. To explore strategies of steering a charity through financial trials, we sat down with Rebecca Young, a Strategy, Transformation and Governance Consultant and Interim Deputy CEO. Rebecca is helping charities to tackle some of the most common challenges and opportunities faced by the Third Sector. Having recently worked on a well-publicised closure of a vital service, she is currently engaging in transforming the remaining charity to ensure it can continue to meet the needs of its beneficiaries. She shares her key insights below.

Rebecca’s experience and insights

 

“In June 2024, the Charities Aid Foundation published the results of their annual survey, which revealed that 18% of charity leaders felt their charity might not exist in five years’ time.

Buffeted by the COVID-19 pandemic, the cost-of-living crisis, the shrinking of local government funding that began with austerity but accelerated post-pandemic, and the recent sharp decline in central government contracts, the charity sector has never faced greater challenges than it does today.

As the support provided by the state has shrunk, demand for charitable support has significantly increased. Faced with a real term decrease in funds from central government to deliver these contracts, many charities are ‘plugging the gap’ by subsidising public services. Which is risking their long-term sustainability by drawing from voluntary income and reserves.

The recent rise in National Insurance, from which the sector was not excluded, will only worsen this fragile situation.

I am all too familiar with the struggles and the difficult decisions that will face many charity leaders this year and, in the years to come. Last year, I was part of a senior leadership team which took the difficult decision to close a truly vital service after exhausting all options to save it. Why? The funding simply wasn’t there anymore.

I don’t envy anyone staring at their financial statements and wishing they looked different. Whilst closing our services wasn’t the kind of learning curve I wanted; it was certainly an education. It has fostered in me a real passion for supporting others to navigate their way through what often feels like an overwhelming quagmire of decisions, plans and risks.

Nobody tells you ‘how’ to close something. As charity leaders, we are relentlessly focused on surviving and thriving – until we need to pivot. My biggest take out is that unless you are calling in administrators from the start, it’s on you – the Executive team supported by the Board. Yes, you will need and seek external support, but no professional advisor will make the decisions for you or balance the many risks to come up with a plan, and they don’t know your charity like you do.”

Rebecca’s top 10 take aways:

 

  1. Engage excellent professional advice. Do not cut corners as the quality of your advisors are directly linked to delivering the best outcome you can in the circumstances.
  2. Enhance your governance arrangements. Meet more frequently so that the Board are kept abreast of the financial position as it evolves and can respond quickly as changes occur. Update them between meetings if you need to – don’t wait to meet.
  3. Understand your Articles of Association and charitable objects. Be clear not only what they permit the Directors to do in these circumstances, but also on the services you can deliver under the objects if you are considering changing the activities of the charity.
  4. Ensure you are clear that ‘Going Concern’ covers charities that are operating. It is possible to be a ‘Going Concern’ and be technically insolvent from a balance sheet perspective. Proper modelling of what would crystallise in a closure scenario is hugely important.
  5. Understand every liability including your contingent and prospective liabilities. Don’t assume they are all held in one place. Engage each business unit in sharing the details of agreements they have entered. Read every contract and pay attention to leases, particularly those that the charity may have held for some time. Seek advice where needed. Create a schedule and keep it up to date.
  6. Book values of assets are vital to your final outcome. Make sure they are current and entered on the right bases – i.e. open market, going concern. Market your assets early and well.
  7. It might sound obvious but taking the time to create a robust project plan is crucial. From a partial closure of services to a full wind up, the plan must be rigorously worked through and involve every relevant stakeholder and advisor. It is through your project plan that you will maximise the final outcome.
  8. Forecasting needs to be robust, especially if you are considering the charity’s solvency. The forecasting should consider all liabilities and your costs of closure or transition. You cannot determine solvency unless you marry cash flow forecasts with balance sheet liabilities.
  9. Communication can enhance or derail your plans in equal measure. Clear, regular and consistent communications need to be at the heart of everything you do. This starts with the Board and the Senior Leadership Team understanding and accepting the position of the organisation and agreeing the way forward. Write your internal communications in the knowledge that they could very easily become external communications against your will. Write your external communications so that they marry with your internal communications. Have a crisis comms strategy and stick to it.
  10. Control as much as you can but accept that some things will be out of your control. Beneficiaries may speak to the media. Absolutely everything cannot be known when you first make the decision. Build capacity into your plans. Be prepared to be flexible and don’t sweat the small stuff.

 

Summary

 

“And finally, it is tough and bruising but as a senior executive it is your responsibility to steer the charity to achieve the best outcome in the circumstances. Lean on trusted colleagues, rely on advisors, and be kind to yourself in the process.”

The overarching narrative from our conversation with Rebecca was the passion, accountability and dedication she had put into getting the best outcome possible in very difficult circumstances. We felt it was important to share Rebecca’s thoughtful and practical advice with others in leadership roles who may be navigating, or preparing to navigate, the challenging journey of closing a charity.”

If you’d like to contact Rebecca for more information or consultancy support you can reach out here.

At Ashby Jenkins Recruitment we aim to create content supporting the sector on various topics from closing a charity, ageism to recruitment best practice. Please check out our other posts to see the range of advice and support we cover.