Charity Closures causing irresponsible impact on staff

Can we be clear that charities that close without paying their staff final salaries should not be pitied. Things went seriously wrong before they shut the doors for good. 

Someone took the decision to spend reserves in excess of liabilities. 

Someone took the decision not to restructure downwards when their fundraisers forecasts were not optimistic. 

Boards took decisions knowing the financial position and did nothing. 

These situations are not unusual in fact I have now seen 4 charities in as many months close under the same circumstances. One even hired a CEO into a charity that was bankrupt and didn't tell them. 

I am going to be stern here. If you are sitting on a diminishing pot of resource and a huge wage bill don't run the charity until it runs out of money. Halve the staff team and run it for twice as long to give you a LEAD time for turning around the financial situation. Know your redundancy liability and lead times at any one time. Do not run the charity into this reserve, it is there to pay wage liabilities not your lack of financial planning. Always have wind up costs in reserves. Always. No excuses. 

Next. Never be dependent on one funder for over 30% of your income. Diversify. It is like spreading risk. Focus. Don't start trying to diversify into long term gains like legacy work or major donors if they are new. Focus on short term gains- trading, trusts and foundations, gov grants, community fundraising. Remember returns are proportional to the investment ratio. 

Finally, do the maths. Always do the maths. Know your outgoings and creditors at any time, CHASE creditors from the day they are late paying. Always keep an eye on profit and loss and the balance sheet and cashflow forecast. Weekly if need be. 

 Seriously though, stop making a mockery of staff who give up their time, by running charities into the ground whilst not paying their salaries. Letting them go on to other work is much kinder. Soapbox speech over.

I coach charity finance for CEOs as part of our charity CEO coaching. Holler if you need help. Don't suffer in silence. We also have many expert coaches in our team who help with restructuring, specialists in charity finance and even interim leadership teams.