Case Study - A Local Charity

Our Client

A local charity which owns and manages a supported housing development in Hampshire. When I got involved the charity was administered by a well-meaning but financially naïve board of trustees.

Their Challenges

The charity had been operating for 50+ years and, in early 2008, had decided to borrow £750,000 to expand their development by building an adjacent, but separate, property.  When the credit crunch hit, the bottom fell out of the property market, and the occupancy rate of the new building was hovering around 33%.

As a result, their ability to service their debt burden was, to say the least, challenging.  The incumbent treasurer had left, and the trustees approached me to help put them back on a sound financial footing. I have been working with them ever since.

Our Solutions and Results

Increasing the charity’s debt burden

The terms of the original loan were unbeatable, but having two separate buildings made the development less attractive to prospective residents than linked properties would be. Bearing this in mind, I was able to negotiate an additional loan at a reasonable interest rate which, coupled with increased occupancy, would reduce the charity’s overall outgoings and give us much needed breathing space. We could then afford to link the charity’s two adjoining buildings together making the whole development a much more attractive proposition for potential residents. Not an obvious solution but by far the best.

Improve the efficiency of the internal staff

On my recommendation, the board of trustees approved an internal management review to assess the complex’s staff, capabilities and management structures. It quickly became apparent that the house team who looked after the residents were highly skilled but poorly managed. We this knowledge, we parted company with our General Manager and hired a new one, much better suited to our needs. We also implemented a comprehensive staff training programme to clarify their roles and responsibilities. The result was a massive improvement in overall efficiency and service levels.

In Summary

The changes above led to a steady improvement in occupancy rates from 33% to 85% which in turn put the charity back on an even keel. We were, therefore, able to roll over the borrowings for the link building, again at a very reasonable rate.

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