Yoga Quota is a new charity. And a new business for that matter. So I am aware that as I learn from these other charity news items I am coming at it from a niave, fresh perspective... which will make me more idealistic.
Times spent at the 'old job' working on profit maximisation, efficiency and general cut throat business concepts have left a mark. They also sent me running to dedicating my life to spreading benefits of yoga as a charity!!! But I'm adamant that a charity doesn't have to be inefficient, just because it is not judged on profit. Doesn't have to be slow and wasteful just because it is not experienced in 'business'. Doesn't have to be 'bad' just because it is 'business-like'.
I sat on this post for a while, but here are the learnings I think all charities should take from the recent news.
(If you haven't seen the news I am referring to outsourced call centres targeting vulnerable people and Kids Company closing after just receiving millions in grants.)
I noticed already a big difference between my Cut Throat business experience at ‘The Old Job’ (efficiency consulting) where there is was all about increasing profit either by increasing revenue or decreasing cost. Easy because all costs are in one bucket, and all profit just goes to shareholders. Done. Easy. Sucess.
The same principles go for the charity- increase revenue (yes still need to do this) decrease costs (yes still need to do this...for the overhead costs and the enablers) but the difference is that all the 'profits' should be spent on the charity's purpose. But hey- where is the incentive then to spend them efficiently!!! And I think that that is what is difficult for charities to drive. Charities need to watch like a hawk the ratio of costs that are overheads or enablers to the costs that are directly charity's purpose. But if a staff member is an amazing deal broker, and gets all the food say for a homeless shelter for free (direct costs of the purpose = £0) then this should still be rewarded.
So, I am adjusting my accounts when reporting to the board to report on the ratio- driving spend on the charity purposes up, still efficiently and driving the enabler costs down. My trustees are brilliant and are driving me to run YQ as a business- which will make it as efficient as I can.
Meeting your purpose and Scope it!
It was reported that the lady in charge of Kids Company closed the charity doors but they couldn’t even pay the staff 3 months wages even after just getting a large grant from the government. Confusing.
It seems mad that 7 days before closing the charity in question had a million or more in a grant. Where on earth could the money have gone? Obviously to liabilities and debts, too much marketing? Some girl was interviewed saying they would just hand out cash to every kid….every one who asked- not those necessarily in need. Cynical people will ask how much the CEO got paid. We can find out on the charities commission. What about the rest of her staff (nothing after being made redundant) Sounds like a big black hole of cash going in and nothing measurable coming out. Worrying.
On the one hand a civil servant on Radio 4 said that he was disappointed in the management of her charity. If asked for Key Performance Indications of how well the charity fulfilled its purpose- he didn’t get anything tangible reported to him. Where was the money being spent? So he suggested stopping grants. Then the next day the CEO of the charity was on Radio 4. She did not convince me of her financial management, only of her passion for her cause. She asked for even more money. She said that the demand for the services was too high. She blamed the government. She said it was a smear campaign. I thought the interviewer had a good point about living in your means and accepting the kids you can afford to help. If she had done this scoping rather than an open door policy- some one would still be getting benefit from the charity- not everyone but someone. I bet she was just doing her best and not saying no to anything....
So learning from this:
1) Measure the impact you are making- especially if you are claiming an impact - to justify donations if you get them.
2) Scope your services – so don’t offer services to everyone, in an unsustainable way do what you can
For Yoga Quota, our purpose is to get new people to try yoga. I’m not claiming it will solve people’s lives (although I know that it can help people, and I keep little anecdotes of the success stories) If people can suggest better ways to measure the impact then please let me know.
But we have fallen foul of over stretching Yoga Quota too. I set up fortnightly classes in perpetuity for The Porch and Restore- but if I strictly made the quota every time for these charities then all the quotas would be about these two charities, which I think would bore people at the studio. So, actually, I just do the classes rather than do a quota every time and do additional quotas for more different charities. This means that we are actually doing more than the quotas suggest, which is fine, but could easily overstretch Yoga Quota. Too much heart and it is so hard to say no. I’ve actually stopped the fortnightly classes for now but for maternity leave rather than anything else.
RESPONSIBLE fundraising and a value exchange
This was a concerning news item. Big charities and small use cold calling to get donations from people. They outsource this to people who are incentivised to get as much money as possible (of course). Big charities like Oxfam, back it up with strict procedures and limitations to protect vulnerable people from getting these calls (like your granny with alzeimhers) BUT some of the smaller ones don’t have that maturity and evidently haven't put in these restrictions. This has resulted in people getting tonnes and tonnes of calls who do not have the financial ability to pay, and are vulnerable decision makers. Not good.
The whole scrabble for donations sits uncomfortably with me. Although (radio 4 again sorry!) had an interviewee on there backing up this rather duplicated market with lots of similar charities overlapping in cause. He quite rightly pointed out the ones that don't get donations will fail- in a good market situation. (Except of course when you add grants to the picture).
Anyway in response to this news, other than NEVER setting off a company to fund-raise for YQ without proper checks and balances, I want to always have a value exchange with the revenue. I suppose our model is more of a social enterprise one. People pay for a service (yoga classes) and the profit goes to the charities’ purposes. Social enterprises only put 50% of their profits to the charitable aim. The service itself is promoting the charities purposes too. I think this exchange is good, so you don’t need the cold calling element or the 'begging' element. The other income is from yoga teachers who donate a nominal sum to get the Yoga Quota Badge and their minimum quota of charity classes organised for them (by me). Again, although this is a membership of the charity, it is not cold calling vulnerable people.
Charities like Oxfam don't always have this value exchange clarity. But for these the value exchange is in the proof that the beneficiaries are getting benefit.... back to my previous point of MEASURING THE IMPACT!!!
Thank you news for helping me reflect on how to run Yoga Quota.....
To be more 'business' without being 'bad'...