Incisive Financial Understanding

CHARITY 'H' LTD

Charity H ran services for the families of prisoners - including visitors' centres at prisons. These had been seriously under-funded by the Prison Service. The effect was that 60% of each Centre Manager's time was spent fund raising. This compromised the level and quality of service the centres were able to provide. This picture of chronic under-funding was mirrored in other services the charity ran. At the point of taking over responsibility for the charity, cash reserves were projected to last just 3 months.

First steps were to re-work budget plans to include all costs and outgoings and negotiate an overdraft to fund essential changes. Discussions with the Prison Service led to better funded contracts (based on full costs) and improved service levels from the Centres.

The immediate impact was that staff Managers and staff could nopw focus entirely on service delivery, free of the uncertainties that had been ever present in the past. Central costs (such as strategy and leadership) were met in full to secure the future of an activity the Prison Service now found valuable.

Within 12 months the charity was free of the overdraft facility and able to meet its financial commitments including its reserves-target in line with Charity Commission guidelines.

What does this case demonstrate?

Even in what appears a hopeless situation with a funder seemingly unwilling and unable to increase their financial commitment, the turnaround of long-standing financial problems can be achieved to meet service delivery needs.