Economic and Financial Management: Charity Performance Analysis Report

This report provides a comprehensive analysis of the economic and financial management of Cancer Research UK (CRUK), a leading UK charity. The report begins with an executive summary and introduction, outlining the key macro and microeconomic factors impacting CRUK's performance. A PESTLE analysis examines the political, economic, social, technological, legal, and environmental factors affecting the charity. Subsequently, a SWOT analysis evaluates CRUK's internal strengths, weaknesses, opportunities, and threats. The report then analyzes the impact of these factors, particularly focusing on the decline in voluntary donations due to economic uncertainty and the COVID-19 pandemic. The analysis highlights CRUK's strong brand image, corporate partnerships, and volunteer support as strengths, while identifying its dependence on donations and vulnerability to economic changes as weaknesses. Opportunities include leveraging its brand for fundraising and partnerships, and threats include competition from other charities and unstable funding sources. The report concludes with recommendations for CRUK to mitigate financial issues, including diversifying fundraising methods, targeting donors through big data analysis, and engaging in brand campaigns. The report underscores the importance of financial management for non-profit organizations and their societal welfare, and it offers actionable insights for CRUK to navigate its challenges and maintain its operations. This report is a valuable resource for students seeking to understand economic and financial management in a real-world context.

Economic and Financial
Management
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Executive Summary
This report is aimed at assessment of micro-economic and macro-economic factors that
impacts a charity organisation. Cancer Research UK has been chosen for assessment in this
report. It is one of the leading cancer research organisation in UK and has a stable brand image
but of lately, due to financial uncertainty and pandemic, it is facing loss in voluntary donations
which is creating financial issues for it. This report first focuses on finding impact of macro-
economic factors and therefore, PESTLE analysis has been performed. It was observed that
external environment has significant impact and it is very important to analyse those impacts so
that charity organisation can make according changes in its financial management. Further, it
focuses of finding impact of micro-economic factors and therefore, SWOT analysis has been
observed. Strengths and weaknesses of its resources has been determined so that company can
develop necessary amendments in its financial process which has been primary cause of
development of financial issues in it. Lastly, conclusion and recommendations has been made
which can be adopted by organisation to mitigate issues arising in front of it.
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Table of Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................4
Environmental Analysis...................................................................................................................4
Analysis of Macro environmental factors that impacted Cancer Research UK(CRUK)............4
Analysis of Micro environmental factors and their impacts on Cancer Research UK...............5
Recommendation and Conclusion...................................................................................................7
References........................................................................................................................................8
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Introduction
Charity organisation in England and Wales has been defined as an organisation which has
been incorporated exclusively for charitable purpose and which is regulated by the High Court's
charity law jurisdiction (Legal structures for community groups and not-for-profit organisations,
2020). This report is aimed at assessing and analysing micro and macro-economic factors that
impacts the performance of such charity organisations. For this report, Cancer Research UK has
been chosen as charity to be assessed. It was formed in 2002 and has a focus on researching on
cancer prevention, diagnosis and treatment. It also works to spread awareness about the diseases.
It raises money through voluntary donations, fund raising events, corporate partnership and due
to COVID-19 is experiencing slow in the funds making it difficult to operate on its actual scale.
Key factors that impact the charity are global economy, market conditions, politics,
technological changes, social impact, volunteers, partners groups, etc.
Environmental Analysis
Analysis of Macro environmental factors that impacted Cancer Research UK(CRUK)
Macro environment factors are those factors which are present in the general environment
in which the organisation works and has an impact over the working of the organisation
(Mitchell, 2017). PESTLE analysis of organisation would enable identifying and assessing the
impact of various macro-economical factors over the performance of the charity organisation:
Political – Every government has its policies towards the charities like supporting their
activities, making contributions, taking their advice while framing public policies, etc. CRUK
works with government to provide advice over developing such public policies that are aimed at
reducing chances of cancer among people. For example, it has once worked with government
about bringing smoking ban in England and lobbying to get access to new cancer medicines on
subsidised rates. Government policies affect income trends which are represented in personal
disposable income that makes difference in donations to charities.
Economic – It includes economic factors that are capable of impacting CRUK such as
changes in taxes level, stage of economic market cycle, etc. Increase and decrease in taxation is
capable of affecting contribution of donors as well as budgetary management and program
planning of the organisation (Bendell, 2017). UK has been long facing economic uncertainty
since global recession and Brexit mishandling, which has been compromising the voluntary
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donation amount. Adding to the woes, Covid19 led to bigger slump in economy and CRUK
believes that it will lose about 120m GBP of donate income over the next 12 months
(Coronavirus leaves one in 10 UK charities facing bankruptcy this year, 2020).
Social – Charity organisations work to serve society and gets volunteers from society as
well. Every major change in society impacts them somehow. CRUK aims at improving health of
the society and such sociological changes which negatively affects it such as unhealthy lifestyle,
unhealthy food practice, increased unemployment, uncontrolled population growth, etc. directly
and indirectly increases stress over the organisation. Unhealthy practices increase numbers of
vulnerable people while factors like unemployment rates impacts the number of donors (Finkler,
Smith and Calabrese, 2018).
Technological – CRUK makes good use of technological advancement both in the
research and for creating awareness. It partners with universities, hospitals and institutes across
UK to work on latest technology machines and other equipment that can help in developing
better ways to treat cancer and reduce chances of having cancer. It has a good brand image and
can make use of technology to raise funds so that it can avoid complete failure. For example,
using Facebook Charity feature, organisation can request people globally to donate to it so that it
can continue researching to cure cancer and organising events to raise awareness about it.
Legal – Charities are subjected to many legal restrictions both in raising funds as well as
usage of their funds. CRUK works on researches and is subjected to copyright, trademark
infringement, data protection law, etc. It is also subjected to other laws when dealing with
partner institutions and volunteers. Legal guidelines not only impact working of the organisation
but also donor individuals and institutions which affect their wealth trends, saving and spending
rates etc. (O'Dwyer and Boomsma, 2015)
Environmental – Environmental factors play a very important role in working of CRUK
as it encourages people to live in coherence with nature and practice environment friendly
practises so that they can have cleaner water to drink and air to breathe. These practices reduces
chances of having cancer which is the welfare aim of the charity. Charity is expected to adopt
eco-friendly approaches while practising research on technological advancements.
Analysis of Micro environmental factors and their impacts on Cancer Research UK
Micro environmental factors are those factors which helps an organisation in assessing
the environment in which it is currently working. SWOT analysis of an organisation can be
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performed to understand strength and weaknesses in its internal environment. Knowledge of this
can be used to explore the opportunities that are available to them and avoid threats that are
capable of restricting charity organisation from improving its performance or maintaining the
current level of its working. SWOT analysis of the organisation has been performed below to
identify micro-environmental factors impacting its performance:
Strengths – It includes those factors which add to the efficiency and effectiveness of the
charity organisation (Schaltegger and Wagner, 2017). One of the prime strengths of the charity is
its strong brand image which has potential of keeping it going even under difficult circumstances
like financial issues as it is facing now. It also has support of corporate partnership and political
networking. Its volunteers also stands as its strength as they provide it experience and expertise.
They provide it digital expertise as well which is also capable of generating new fundraising and
investment medium for it.
Weaknesses – It includes those factors which act as hurdles or obstructions to the
efficient performance of the charity organisation. Cancer Research UK is dependent on
donations and corporate support for performing its activities and therefore, is vulnerable to
economic changes and finds it difficult to research and organise awareness events when
economic conditions are not favourable and voluntary support is low such as during pandemic
time. It works with the help of volunteers and other staff and often faces staff retention issues
due to unpaid internships. It also has developed intangible concept of research which incurs more
expenses than the benefits generated out of it.
Opportunities – It includes those chances that are in front of the charity organisation and
can help it performing its welfare objectives in a better sense (Suárez and Gugerty, 2016).
Charity is though facing down time due to unfavourable economic environment but its strong
brand connect in the market can help it gain new partners, volunteers and fundraising options
such as crowdfunding, mobile fundraising, etc. It can use big data to target better solicitations
and leverage political and corporate support to aim better partnership.
Threats – It includes those chances that can restrict organisation from supporting and
maintaining its welfare activities. There are many charity organisations working in the market
which distributes donations among various purposes and various charities and due to economic
slow down, fund generation has become more difficult. Not having stable funding source has
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been proved a threat for the organisation. Data protection legislation, ageing donor profile,
unpaid internship, etc. all bring to it negative light and acts a threat to it.
Recommendation and Conclusion
Conclusion
In the above report, analysis of micro and macro environmental factors impacting Charity
Research UK has been made. It can be concluded that while success of profitable organisation is
defined from the quantum of profitability it makes against its cost structures while for non-profit
organisation, it is defined for the societal welfare they produce against the fund they raise. Their
profit is known as surplus and is required to be used for the cause the organisation is committed
to. It is affected by various factors in general environment which not only impacts upon its
functioning and operations in internal factors but externally as well by influencing its donors
profile. It can be also be concluded above that it must make use of its strengths to avail
opportunities coming its ways and counter its threats so that weaknesses cannot be exploited
against it.
Recommendation
Charity is doing good work in its chosen welfare cause and is only facing issues due to
loss in quantum of donation and number of donors which is making it difficult for CRUK to
perform its operations. Organisation must take it seriously as it is capable of giving it a fatal
blow. It should first of all make its big data analysis to find out profile of donors and their
respective impact level. Accordingly, it must invest in new and diversified fundraising
opportunities like mobile fundraising. It should use social media and other sources of digital
media to improve it mobile fundraising and corporate partnerships. At the moment, it should
invest in only core income activities like legacy marketing to reach old donors and digital
appeasing to counter ageing donor profile by attracting younger audiences. It must also engage in
other activities like benchmarking against key stakeholder relationships of competitors and
organise brand campaigns to maintain engagement amongst existing supporters.
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References
Books and Journal
Bendell, J. ed., 2017. Terms for endearment: Business, NGOs and sustainable development.
Routledge.
Finkler, S.A., Smith, D.L. and Calabrese, T.D., 2018. Financial management for public, health,
and not-for-profit organizations. CQ Press..
Mitchell, G.E., 2017. Fiscal leanness and fiscal responsiveness: Exploring the normative limits
of strategic nonprofit financial management. Administration & Society. 49(9). pp.1272-
1296.
O'Dwyer, B. and Boomsma, R., 2015. The co-construction of NGO accountability. Accounting,
Auditing & Accountability Journal.
Schaltegger, S. and Wagner, M. eds., 2017. Managing the business case for sustainability: The
integration of social, environmental and economic performance. Routledge.
Suárez, D. and Gugerty, M.K., 2016. Funding civil society? Bilateral government support for
development NGOs. VOLUNTAS: International Journal of Voluntary and Nonprofit
Organizations. 27(6). pp.2617-2640.
Online
Coronavirus leaves one in 10 UK charities facing bankruptcy this year. 2020. [Online].
Available through:<https://www.theguardian.com/world/2020/jun/09/coronavirus-
leaves-one-in-10-uk-charities-facing-bankruptcy-this-year>
Legal structures for community groups and not-for-profit organisations. 2020. [Online].
Available through:<https://www.resourcecentre.org.uk/information/legal-structures-for-
community-and-voluntary-groups/>
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