Free financial consultancy for homelessness services
This is an article written by LHF Executive Chairman Don Wood and first published in 24Housing in October 2013.
It is probably true to say that not many of us came into the homelessness industry because we were motivated by money.
If you looked at the drivers behind most people in the sector – individuals and organisations – you would almost certainly find altruism, the desire to make a difference, a philosophical commitment to housing for all. We all wanted to help end rough sleeping; to help people who for whatever reason end up on the streets to move on, to put their lives back together.
Having said that, we need to get the money right. If we don’t have enough money to live, we are of no use to anyone. And if organisations do not manage the finances well, then they can make little difference to homeless people – no matter how motivated and earnest they are, no matter how good their ideas.
So a few years ago, the London Housing Foundation started collecting financial information from across the sector to see the state of play on financial management.
We trawled through annual reports, and even read the bits that, let’s face it, most people skip over. We wanted to understand the true nature of the finances in these crucial organisations. How robust were they? What level of reserves did they have? How efficient were they? What was their staff to client ratio? In short, did they look good from a financial perspective, and would they thrive, or sink.
Every year we collated all of this information into an industry wide report, setting out the overall financial health of the homelessness sector. We called it the Navigator, because we wanted it to help set a course for the sector. We wanted best practice to be a beacon to others. We didn’t name and shame – that was not the point – but we wanted to show people what excellent looked like, so they could steer towards it.
It also allowed us to draw some conclusions. So last year for example, we were able to say that the sector was doing fairly well considering the economic climate. Reserves were up, costs were down and turnover was up by 16%. Efficient and growing – a good sign.
But recently the LHF board decided to discontinue the Navigator. This is not because we no longer think it is useful or feel that financial analysis such as this is the right thing to do. It has been a very positive exercise, and one that attracted a lot of good feedback.
Instead, we decided that after years of analysis, we now want to move to action. Interpretation was one thing, practical support was another altogether. So now, instead of simply collecting, analysing and publishing financial information, we want to target our support at homelessness organisations that may be in financially difficult times, or need some additional financial help.
As in any industry, there are organisations that are struggling. Maybe they are looking to merge, or they have lost a key income stream Or perhaps they simply need more expertise than they can afford.
This is not about grants. We are a grant making body and have distributed millions of pounds in the last few years and will continue to do so. But this initiative is about advice and expertise. At the LHF we have access to financial experts; people who really understand the sector’s finances. We offer consultancy services, free of charge, to agencies that need some short term, expert analysis and help to manage or understand their financial position and their options.
This advice is aimed at smaller organisations that are facing significant financial change such as loss of a contract, or reduced grant revenue. We hope that this will take our Navigator work on to the next stage. Not just a satnav, more of a breakdown and repair service.
If you are interested in talking to us about this, please email email@example.com with a short explanation of your needs, and we will respond quickly.
Don Wood, Executive Chairman, London Housing Foundation