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How to build financial resilience for small charities

  • Guest Blog
  • Jun 26
  • 4 min read

Cranfield Trust offers free consultancy and practical support for small charities. Get in touch for a no-obligation chat.


Small charities are under pressure. Fundraising is tough, costs are rising and demand keeps growing. Nearly half (48%) of the 5,471 charity leaders we’ve spoken to in the last 18 months said fundraising is their biggest challenge.


Financial resilience matters. It starts with strong foundations:

  • Clear purpose and planning

  • Financial stability

  • Strong leadership

  • A healthy working culture

  • Effective operations.


Keep your cash flow forecast up to date


Cash is vital, especially in uncertain times. A clear forecast shows how long your current funds will last and when you need to take action.


Update your cashflow every month. This helps you see:

  • how much time you have to raise new income

  • when you’ll need to make cost-saving decisions

  • whether you’re at risk of breaching your reserves policy.


Start with a ‘base case’, a forecast using only your secured income. Then, layer on other scenarios, such as income you’re likely or less likely to secure. Forecast at least 12-18 months ahead, not just to the end of your financial year.


This gives you time to make informed decisions, rather than reacting in a panic.



Forecast your income

Use a red-amber-green system to assess your expected income by likelihood. Track decision dates for each source. This makes it easier to plan ahead and manage your risk.


Try to bring your team into this process, too. Fundraisers and service leads can add valuable insight.


 

Review your fundraising pipeline

Review all the active bids and relationships in your pipeline.


Look at your past success rates. Do you have enough in progress to hit your targets? Do you need to step up your activity?


If you know your typical success rate is one in four, you’ll need at least four good opportunities in play for every one you need to land.


Regular reviews help you stay realistic and spot gaps early. You can also use your pipeline to adjust workload or refocus your efforts if things start to slip.

 

Compare year-on-year performance

Track your income at this point in the year against the same period last year. Are you on track? Ahead? Behind? Strip out one-off income so you’re comparing like with like.


If your patterns are changing, it might be time to review your targets or shift your approach.

 

Make sure everyone understands the finances

Clear, regular management accounts help trustees and staff understand your position and act quickly. They support better decisions and improve transparency across your team.


Keep your format simple and consistent. A one-page dashboard can be powerful.


 

Know your costs

Think beyond basic delivery costs. Include overheads, communications and staff support. Be clear about what it really takes to run your services.


Check your unit costs regularly, especially if your user needs or delivery model have changed.


You can only recover costs you understand.

 

Prepare a strong Plan B

It’s hard to make tough calls, but trimming around the edges often isn’t enough. A realistic Plan B gives you clarity and protects your core work.


Use your forecast to decide what you would stop, pause or reduce if needed. Build in trigger points so you act early, not when it’s too late.

 

Focus your fundraising

Be selective. Focus on funders or donors most likely to respond. Tailored, well-researched approaches nearly always outperform scattergun applications.


Spend time getting close to your funders: understand their priorities and look for the right fit.


 

Diversify your income

Relying on one or two income streams makes you vulnerable. Try to build a mix of grants, contracts, donations, trading, and social investment where possible.


This won’t happen overnight. Start small and track what works. Build gradually over time.


 

Factor in opportunity cost

Some fundraising activities take more time than they’re worth. Events, for example, can be labour intensive for low return.


Be honest about the true cost of income generation. Sometimes, walking away is the best option.

 

Bonus tip: write a business plan

A good business plan aligns your goals, finances and activities. It helps you focus, work better with your trustees and make a stronger case to funders.


It doesn’t need to be long. The key is clarity: where you’re going, how you’ll get there and what it will cost.




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