CXK: funding must always meet funded project costs

INSIGHTS CHARITY SECTOR SPECIAL
15 May 2020: Pauline Smith is the chief executive officer of CXK, a charity that delivers a range of services that support individuals to improve life choices. Funding is central and, currently, that is tough but the response has underlined the value of third sector organisations.

CXK’s mission is to inspire people to thrive by providing support centred on their needs, tackling their challenges and maximising their potential. Over the last year, it has supported more than 50,000 individuals across the South East with career guidance, support and training.

“Often the focus is on those with complex and vulnerable lifestyles,” says Smith “We empower and support young people and adults within their own communities and in custodial prison settings.”

An already difficult and highly pressured service has been made so much more complex by the COVID-19 pandemic. Smith is balancing extreme and increasing need with existing obligations and furloughing decisions in a period of uncertainty and no clear precedent. 

Until the end of February 2020, Smith knew exactly where she was as CEO and where the charity was going. “When COVID-19 hit, we were in good shape financially,” she says. “Our year-end figures were good; we had even made a small surplus which we were planning to reinvest into our services.”

The charity has an annual turnover of £7m and, says Smith: “COVID-19 has made financial sustainability a priority. We have to run the charity with a strong, positive business focus.”

The charity’s commissioning organisations are largely central government, local authorities, the Ministry of Justice (for prison programmes) and other smaller organisations, such as schools, that use CXK’s careers and training programmes. The aim is always to deliver services to meet areas of need. 

Smith says: “We have to make sure we attract the right funding, and make sure the funding is adequate to meet funded project costs.” Ultimately, the aim for all charities is not only to meet their charitable purposes but also to continue, and that is difficult under pandemic conditions. “You can only continue if you make the right business decisions,” she says, adding that saying “no” to funding that does not meet full project costs is key to this equation.

Covid-19 brought about a new conundrum for the charity: how should it deliver services when most of the charity’s services are delivered face-to-face? That question was quickly put to rest by the charity staff’s swift mobilisation to home-working and their own innovation in delivering virtual support.

Then came the question: how will this affect funded projects, especially those funded by results? CXK delivers the National Careers Services (a case in point) on behalf of the government, throughout the South East. “We all had to accept numbers would initially reduce,” she says. “Negotiations with funders and commissioners were very transparent and we had to revisit the contracts to ensure that support was in place to assist individuals and businesses.”

Contracts were salvaged, targets were tweaked, furloughing discussed, staff had to adapt, and new groups of individuals were identified for support. “We had to move fast, we do not always have answers and sometimes things are simply unclear,” she concedes, “but this pandemic has played to our strengths and we have the ability now to reach out positively to support so many individuals affected by Covid-19.”

Out of nearly 150 staff, around 30 have been furloughed. Furloughing was used where the charity could not guarantee income to deliver specific services and pay the associated salaries. Smith is emphatic that the decision to furlough was not related to need – that made this difficult decision so heartbreaking.

“The furlough scheme has been useful, but it is a worry,” she says. “Those beneficiaries that were vulnerable in February will be even more vulnerable now.” Signposting to alternative services is all that can be done where some of CXK’s own services are suspended – in this limited way – for the time being.

“We are going to see demand shoot up,” Smith predicts. Gatwick Airport and the airlines based there are on CXK’s patch. Those and many other sectors so badly affected are going to need our support in weeks to come.

This is a complicated time for the third sector as its value has become screamingly obvious to all. And yet its financials are stretched beyond anything it has seen before. Not only that, it is now evident just how well the third sector has been delivering these services and at what great value.

“Commissioning organisations truly understand the extra something that comes from the third sector – you would not get this level of expertise elsewhere and it would be much more expensive,” Smith says. “That is why so many of these services are commissioned out.”

Most of the decisions Smith had make would floor many a seasoned large business leader. In the end, she says it comes down to having honest conversations, and challenging where challenge is needed. What happens after June and the end of initial furlough is on everyone’s minds, charity or otherwise. Smith and CXK will adapt.