NICVA's Recession Toolkit

Voluntary and community organisations face not only the same risks as others, but also a set of risks more specific to the sector. Therefore some organisations are already planning for reduced income and some are making decisions to cut staff and services.

Planning for what might lie ahead is vital if your organisation is to come through a recession and still be able to do its job effectively.

Risk management

In the current financial climate it is more important than ever that organisations develop risk management procedures. Managing risk is attempting to safeguard the organisation's assets and ensure that the organisation is effectively fulfilling its objectives. Risk management should help an organisation to identify risk and decide whether there are sufficient safeguards or controls in place to minimise the effects of the risks to the organisation, or whether such controls or safeguards need to be developed. Risk is not confined simply to the financial affairs of an organisation, or health and safety, if applies to all areas of the charity's operations.

Risk identification should be built into everything that the organisation does. To ensure that the organisation gets the most out of the process it should have a participative approach. Staff and volunteers should be involved in the process and all the organisation's activities should be assessed. [See NICVA Advice Note 13: Risk Assessment]

Risk by category

In order to help your organisation identify potential risks or areas which need attention, particulary now, we have divided the areas of risk into the following sections:

1. Governance risks
2. Operational risks
3. Financial risks
4. External risks
5. Compliance

Quick Tips

1. Ensure you are clear about which of your organisation's activities contribute most to your mission. If you have to defer or cut activity you have a clear basis for doing so.
2. Ensure your services are meeting your members' needs.
3. Analyse the demand for your services - bear in mind that the recession may put a different slant on demand.
4. Act quickly and decisively - good information systems are important alongside strong governance.
5. Consider ways to reduce costs - back office suppliers and bulk buying.
6. Diversify your income stream and consider mergers and collaboration.
7. Communicate with all stakeholders and remember this includes staff and members.
8. Retain and motivate your best staff - try not to cut your training budget.
9. Be realistic and optimistic about the increased demand on your services.

Download a copy of the 'Managing in a downturn' report (.pdf) from PricewaterhouseCoopers LLP (PwC), the Charity Finance Directors' Group (CFDG) and the Institute of Fundraising (IOF).

Other useful links:

Recession Resources, from navca.
Recession Support, from ACEVO.