Impetus-PEF has called for collaboration between charities and Government to raise standards in the wake of recent charity closures.
The venture philanthropy charity said charities should work with Government to “raise the bar” on management and governance. Impetus-PEF urged charities to ask how accountable their leadership teams are and how open they are to learning and development.
“The leadership team needs to be open to and focused on doing what it takes to ensure that their programme is delivering meaningful, sustained outcomes for its beneficiaries,” the charity said in a statement.
Questions need to be answered around the cohesiveness of a charity’s governance, systems, controls and management, Impetus-PEF said. Organisations were also urged to examine the robustness of their financial reserves, with a view to balancing immediate service demands with long-term sustainability.
Impetus-PEF warned against an over reliance on one stream of funding, due to the risk of financial instability arising where this funding is suddenly withdrawn.
The charity made the comments in the wake of the closures of Kids Company and British Association for Adoption and Fostering in recent weeks. The charities closed under different circumstances but financial difficulties were cited in both cases.
Impetus-PEF chief executive Julia Grant she was saddened to see the closure of two charities which shared common goals with the organisation she leads, and the sector needs to learn from the charities’ stories.
Grant said the “dual pressures” of growing demand for services and a tougher environment for raising funds and obtaining grants mean high-growth charities can become victims of early success, through failing to build in the impact disciplines and funding streams to sustain and finance high quality service.
Impetus-PEF helps charities and social enterprises become stronger and more effective organisations to deliver better outcomes for young people, and Grant said the model it has developed could help the sector.
“Our funding model and methodology ensures our partner charities move carefully and purposefully through different stages of their growth and development, and we put specific emphasis on continuously improving a charity’s strategy and planning, resource management and governance, to ensure greater impact,” she said. “Our funding decisions are based around key investment criteria, which we firmly believe could be a benchmark guide for any philanthropic donations by Government, grant-making organisations and private individuals.”