Guest blog by haysmacintyre, an award winning firm of chartered accountants and tax advisers, with 35 partners and over 300 staff, providing advice to entrepreneurs, fast-growing and owner-managed businesses, charities and not for profit organisations across the UK and internationally. As haysmacintyre are one of our Platinum Sponsors of this year’s memcom conference, we appreciate this relevant and pertinent advice.
Managing Financial Resilience
One of the biggest issues facing membership organisations is how to manage their financial resilience and sustainability. With the COVID-19 pandemic, this only brings financial planning and sustainability to the forefront of discussions. Membership organisations will be facing the challenges of office closures, cancellation of events and conferences, perhaps delays to exam sitting and their own membership having financial and work struggles.
There may be some positives of office closures and event cancellations, such as travel costs lowered and a reduction in the carbon footprint, as organisations are forced to push ahead with technology solutions; having virtual trustee / council meetings and hosting Continued Professional Development (CPD) and other events as webinars. However, it is clear that ‘business as usual’ may mean something very different in three to six months time.
Innovation and Planning Ahead
Financial planning will be key to membership organisations overcoming the challenges that lie ahead in 2020 and perhaps beyond. Planning not only concerns income generation but also their activities, achievements and reserves – i.e. is their strategy fit for purpose and how can they continue to deliver against it.
As Councils start to look at their financial strategy and whether this needs to change, they need to be sure that they understand their financial risk profile, the ongoing and changing needs of their members and how they can build financial resilience into their organisation. They will need to consider where their current income sources come from, how predictable and reliable these are and how these may be impacted going forward by global events such as COVID-19. Membership organisations will need to consider innovation in their thinking, be prepared to change their working practices and take on new opportunities.
Income diversification is always a hot topic for membership organisations, but this is not just about increasing income sources to as many income streams as possible, but about generating more sustainable and resilient income streams. This could involve generating income from partnerships and collaborations, trading or using volunteers to help deliver services.
However, before you start any journey of change, Councils need to understand their membership body’s current position, what opportunities may be available and assess which opportunities should be focused on. Protecting and growing the organisation’s reputation is equally as important in the current climate where news spreads quickly and can be devastating to an organisation.
Important Questions to Consider
With news spreading and there being many concerns at present regarding losing sponsorship, falling membership numbers and loss of events income, Council members’ need to ensure they can answer the following questions:
- What is our susceptibility to financial loss?
- How could this occur?
- Do we have a financially sustainable business model?
- How do we ensure it is operating effectively?
- Are we financially strong enough to continue to provide services for our members?
- What is our policy on reserves?
- What is the effect of the current economic climate having on our organisation and activities?
- Have we reviewed our contractual commitments?
- Is our current model, systems and controls fit for purpose?
- How do we receive information to assess the above?
- How do we test the information we are given?
- Do we have adequate safeguards in place to prevent fraud?
- Have we considered collaborations or partnerships to be more effective?
- Are we making the best use of our property?
- How we reviewed our investment strategy and performance?
By answering these questions, it will help ensure that you manage financial resilience and sustainability not only during these testing times but beyond.
If you wish to discuss financial resilience and sustainability for membership organisations please contact Kathryn Burton, partner and head of professional institutes and membership bodies at haysmacintyre, by emailing firstname.lastname@example.org or phone 020 7969 5515.
haysmacintyre have also set up a dedicated web page on the range of financial, tax and accounting measures being introduced to combat COVID19 together with related thoughts/insights on helping businesses. haysmacintyre.com/covid-19