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- What Comes Next : your exit strategy or sustainability plan are important to prospective funders. What are they looking for? How can you look beyond the next 3 years?

We considered some challenging Exit situations, with a common feature that all were now in a crisis situation.  This presents major challenges, as the closure of a project is rarely of interest to funders. 

The major lesson is, of course, that the planning of project closure or continuance must form part of the initial planning.  At the outset we need to consider who might, should or could fund our project, and, where possible, involve them in the initial planning for the project.  Engaging statutory funders at this early stage can pay great dividends : at the very least, they will not be surprised when you ask them to fund the project in years to come! 

We must accept that many situations defy the logic of the strategic planning textbook!  Projects with Asylum Seekers are prime examples, where the pattern of need over recent years has been highly volatile, dependent as it is on circumstances in far-flung parts of the world, as well as our own political and economic situation. 

In such situations, there are a number of avenues which can be explored. 

Ø      Revenue Generation – are there assets within the organisation that can be exploited?  It may be possible, for instance, to sell premises or assets prior to the closure of the project, with an agreement to retain their use for the closing months. 

Ø      Partnership – organisations with similar interests may be able to subsume the balance of the project, ensuring a degree of continuity for the client group.  

Ø      General Appeals – an appeal to the community for a finite amount of money for a specific purpose may work, especially if there is a constituency which has an interest in the project – maybe a church or community group, or ex-clients, who know the value of what is being done.

Ø      Legacies – a valuable source of income, but a long game for fundraisers.  An effective legacy campaign takes 7 years to take effect!  It also requires a body of support to whom you can market the campaign. 

However, these situations are far from ideal, and the fundraising options should always be considered at the inception of a project. 

The obvious targets for revenue fundraising are : 

Ø      Statutory funding – health, social services, education or community budgets may often include capacity to engage with Third Sector bodies in the delivery of services.

Ø      Service-based revenue – fees from clients may be appropriate for some projects.  In other cases there may be products or services which can be sold in tandem with the project, to raise revenue.

Ø      Community sources – individual donors or community groups with common interests in the project

 For each of these sources, early planning is important, and may require that the fundraising starts when the project opens up (or even earlier) – none of them can be started when the project is closing down! 

There are only two reasons for a Charity to engage in any activity – to further their objects, or to raise funds to support those objects.   We must always ensure that, where goods or services are sold, the proper price is paid.  We have an obligation to maximize our assets, and this includes ensuring that the right price is paid by statutory authorities purchasing our services under contract. 

The disciplines of Full Cost Recovery are crucial to sustainability.  The notion of “Core Costs” is a dangerous one – it gives credence to the concept that “administration” is an additional and unnecessary burden on our organisations, whereas effective management and administration are vital to healthy organisations. 
 
There are no hard and fast rules to FCR – all costs must be real and justifiable, rather than simple percentages plucked from the ether.  The majority of funders now respect the principles, and will accept properly calculated costs for the infrastructure demands of projects.

We must be strong in the face of cost-cutting agendas – we may see competitors offering cheaper services, but we need to emphasise the strengths of the service we provide.  We are motivated by the needs of our clients, and if somebody thinks they can do it cheaper, they probably have to compromise the service.  We should argue for our clients and the level of service they need, and not be distracted by apparently cheaper alternatives.  We cannot afford to run projects at a loss – it is better to walk away, and allow the organization to concentrate on properly funded activity.
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