Over half of interim charity managers that responded to a recent survey say future leaders of the charity sector will come from the business or corporate sector, and a third said current charity chief executives are not coping well with financial pressures.

Russam GMS, a recruitment firm for charity interim managers, quizzed 1,000 interim managers on working in the charity sector and received 100 responses. It found they faced a number of challenges.

Some 72 per cent said charity income would decrease this year and 80 per cent believed that chief executives needed to become more commercial to steer their charities through these testing times.

But, a third of the interims (33 per cent) felt charity chief executives were not coping well will the current financial pressures. Some commented that the chief executives they have worked with lack business knowhow and are not prepared to ‘face the new normal’. Others said that CEOs were inexperienced at working in hard times and had limited understanding of finance and business.

New sector leaders from business sector

When asked where future leaders would come from, over half of the interims (56 per cent) that took part said they would come from the corporate or business sector, with just a quarter saying leaders would be developed within the sector. However, respondents also felt that corporate chief executives might be put off working in the sector because of lower salary rates and the pressures of having to work with a board of trustees.

Some 67 per cent of respondents believed the sector isn’t doing enough to develop its leaders and 40 per cent said that CEOs weren’t given enough support by their boards. Many commented that more commercially-savvy trustees are needed who are experienced in strategic planning and understand the commercial pressures facing charities. They also said leaders needed commercial coaching and leadership development.

The research found that almost half of the respondents (47 per cent) said the charities they worked for are making changes at board level, with a third recruiting new trustees and 14 per cent hiring a new CEO.

Investment in fundraising

In response to the challenging times, the research found that 73 per cent of charity leaders were tightly monitoring their cashflow, over half had restructured their organisation and an equal number had stepped up fundraising activities. Leaders have also put many activities on hold to save money including recruitment, IT projects and strategic business projects. One respondent claimed that "everything is on hold – there is just a sense of panic".

Over half of the interims reported that they were being recruited to lead restructuring and change-management programmes, for fundraising, project and financial management roles as well as contract negotiation and tendering.

Ian Joseph, managing director charities and not-for-profit at Russam GMS commented: “This research paints a grim picture of the impact the financial crisis is having on UK charity leaders. It highlights a skills crisis at leadership level and that CEOs must be more commercially savvy to cope with the new realities.

“Sadly, some CEOs are not coping well and they need support from their boards at this time.”

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