Further Education Funding Crisis

Further Education is suffering!

What does that really mean? Yes funding has been cut and FE Colleges are struggling because of the way they have managed their funds over the years.

Are the Independent Sector sector in the smae crisis? Yes however for a very different reason. The potential income they generate is subject to real competitive process and very stringent monitoring.

Rogues In the System

In 1991 the aim focused on occupying time and ensuring that everyone in the system was “doing something useful”.

The move to vocational qualifications had begun and the independent sector really came into its own. Providing specialist and technical training that cost the colleges too much to invest in. Or FE Colleges used to tell us at meetings and events that it wasn’t real education.

From that point something really daft happened, the sector grew without the control required. Funding focused on numbers, so there were courses where learners turned up once and left got £10 and never completed anything but the funding flowed.

This simple fraud was replaced by some staff being forced to sign documents on behalf of their learners or organisations claiming to fictional learners at bogus addresses.

The majority played by the rules, however, that minority created longterm sector problems. The sector began to attract bad publicity and it hasn’t disappeared.

Apprenticeships

Oh what a sad event the move to purposeless training for 16 to 24 year olds. Some great learning opportunities but sadly a system that would failed the qualified young person.

Some great project managed into nonexistence by the Skills Funding Agency when they took projects over from other departments.

The systemic issues begin with the Apprenticeship programme. FE Providers aren’t the right people to provide an apprenticeship, the guilds of professional bodies are. FE Colleges should provide some education within the package but they should never be responsible for the whole package.

The employer is challenged to provide some funding or support. In a system that states it is free why should an employer invest?

A Simple Adjustment

There are too many bodies, departments, colleges, agencies and monitoring bodies involved in the system. In this time of increased technology there isn’t the administrative need in most of these establishments.

Learning tracking can be done daily using well designed apps and software, money released to approved training organisations based on the tracking tools.

OfSted and OFQUAL plus the ESFA and the Department for Education, the repetition in this system is wasteful. Then add into the mix the all the awarding bodies. The system of qualifications accreditation can be simplified and one qualification custodian created for the integrity of learning. Cutting millions from the administrative capacity of the system.

All learners use the unique reference numbers they already have for tracking NI or Tax but don’t over complicate a simple process.

Or just scrap the whole funding process and encourage the FE sector to compete. Most Colleges will fold in months and something new, dynamic and lean will rise from the ashes. The sector needs to embrace the change and quit moaning.

The 21st Century learning is repeating the failures of of the previous 30 years.

Conclusion

Having worked in and outside the sector for over 30 years it is clear that the system is broken. Learners and tutors suffer, there is sufficient money in the system and excess capacity.

So let the competition streamline the sector. Force the FE Colleges to compete for every £, no ring fencing and remove the failed Charters.

Education has become a pool for stagnation, HE is all about the money and schools are being squeezed by the funding structure.

It is probably time to think again. We don’t need massive buildings to teach subjects that induviduals don’t want to learn. Close the FE buildings and open up high street learning shops. Put the financial value in the hands of the learner.

Subsidise qualifications if necessary but only as the learner walks through the door.

Technology has the capacity to achieve all of this.

FE Colleges are dinosaurs in a modern learning environment.

Debates and questions in the house present politicians with an opportunity to say the sector needs more money but really it needs to change.

Fundraising Tips #2 – Credibility

Credibility requires openness, evidence and engagement.

The successful “Ask” needs supporting information. To “Ask” without credible evidence is high risk for low return.

Credibility Example

“Give me £10?”

“Who are you?” or “Why should I?” or “What do you want it for?” are reasonable questions when someone asks for money. The last question emphasises that even if I know you I can ask for more detail.

People ask this of friends, family and colleagues, so we rightly expect them to ask strangers and fundraisers. We should expect to provide:

  • A reason and objective
  • Logical evidence to support claims
  • justification of request
  • Impact and benefit

Reason and Objective

Giving is a personal action. Therefore it requires a good reason. Philanthropy is still an exercise in free will and choice, therefore, be specific (give a reason), direct attention to the need or cause (objective) and ask for financial support.

Evidence

Crossing the street when we see graphic images of cruelty or stravation remains a common reaction, people turn the sound down for the television appeals. This style of evidence immmediately sifts the potential donors. Understand how the evidence you use will impact your target donor.

The decision about what constitutes effective evidence is improtant. It needs to aid understanding, therefore stirring an emotional reflex that becomes a call to action.

Justification

Just because I think its a “Good Cause” isn’t justification.

Rational thinking underpins giving, so we need to isolate the specific reasons individuals will give to this appeal and then provide the justification. This needs to be set in context, local, regional, national, gender specific, sector of society or the international concern.

The closer to the individual the more likely they are to give.

For example:

A local park had an outline planning application for development. Local residents were outraged and a public meeting was called. Hundreds turned up.

Good for organisers because they wanted to mount a compaign to stop the development, however, only 10 local properties were affected, three of them businesses. The land in the park was not used and therefore the interest raised by the campaigners quickly wained. The reason, the campaigners had presented justification for the meeting but it didn’t stand up to scrutiny of the rational thinking residents. 

The evidence also failed although it appeared compelling when presented. Zero income became the outcome of the appeal.

   Justification should stand up to external scrutiny. Test your evidence and reasoning one random individuals before launching an appeal.

Impact and Benefit

“Your £10 achieves this!” This approach works because the donor understands that their funding makes a difference (impact) at a personal level. Also when they percieve the changes in individual circumstances this automatically builds the sense of legacy (benefit). That is why so many TV appeals use the approach. Remember in a couple of minutes a great deal can be conveyed.

Script the impact and benefit statements, support it with written information and ensure that it requires the potential donor to act immediately, (Yes or No).

Conclusion

Fundraisers know a successful credible well prepared and well presented appeal needs effective planning. Every successful fundraiser  presents a credible reason for asking.

Contact us for more Tips and support.

Fundraising Tips – #1

Funding Cloud Fundraising is the greatest challenge all not for profit, voluntary and charity organisations daily. We hear the stories of great projects and support programmes losing funding and closing their doors. The simple reason is there are so many good causes and not enough funds to go around. 

I began working on all types of fundraising activities in my teenage years. Quite by accident – I had an idea, the event organiser said “Yes – if you can find a sponsor”. Everyone said it would be difficult but it wasn’t, I just asked business owners to help. I ended up with more money than I needed and it went to the organiser.

From that point forward, I was hooked.

Tip #1 – Ask

Luke FitzHerbet (former Director DSC – deceased) frequently explained that the Ask is critical. 

Three points in creating the “Ask”:

  1. Make it clear you are asking
  2. Tell the whole truth – why the money is needed now!
  3. Explain how they will see the impact

Learning ask effectively is important. It is worth practicing! The Fundraising workshops we run focus on the practical elements of preparing to ask, asking and reptition. There aren’t specific rules in the face to face encounter, however, it is important that you know how the money is going to be used.

When approached in the street or at the door I always ask the fundraiser to explain how my donation is divided up. They are often paid, so how much of my donation goes to the company that is paying them? Who are the other recipients before the final beneficiary? This often presents a problem! Coming unprepared means they leave with nothing.

Fundraising Event – Asking  

The bucket gets passed around and everyone is expected to drop money in for the charitable cause. Consequently, guests are intimidated into giving. However, the cause may not be mentioned but it should be clear to everyone where the funds are going.

The Event Ask requires greater transparency. So again make it clear that you are asking not demanding, not looking to embarrass them into giving. Treat the donors with the dignity and respect you want the beneficiaries to be shown. 

Conclusion

Fundraising can be fun. Therefore, it should be productive and it must be fully accountable.

Getting the Ask right is a simple step to fundraising success. 

Bid and Trust  based fundraising requires the same approach to Asking. Contact the Tender Management team for more details of our training workshops, fundraising support and event management services.  

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Factoring and Tenders

Factoring affects the financial credibility of a small business.

What is Factoring?

Investopedia describes Factoring as:

What is a ‘Factor’

A factor is a financial intermediary that purchases receivables from a company. A factor is essentially a funding source that agrees to pay the company the value of the invoice less a discount for commission and fees. The factor advances most of the invoiced amount to the company immediately and the balance upon receipt of funds from the invoiced party.

Read more: Factor

Harsh measure
                    How it works

Businesses that need to resort to Factoring Agents immediately inform the buyer that cashflow is an issue. Isn’t it confidential? No! When a business collaborates with an agency the paperwork includes a “charge” against the business. So the first credit check or compliance audit shows the priority charge against the business.

Money for Invoices

Sounds great on the face of it. The Factoring Agent rates of payment of your invoice then the balance less fees when the account is settled, it can’t be a bad thing, can it?

Factoring as a first stop demonstrates a lack of confidence in customer relationships or satisfaction, it is also evidence of poor risk management, because too few Small Businesses understand how their marketplace works, they arrive with the invoice, its part paid but what impact does this have on the longterm cashflow?

I have an example for you to ponder on.

A Home Care Support provider has a contract for 300 hours a week. Great news!

The terms are non-negotiable; payment within 14 days of invoice – subject to authorisation and satisfaction.

To win the contract they looked at the competition, the common pricing structure and decided to undercut the hour rate by 10%.

They have the staff, care package and the start date.

Knowing the cost of an overdraft the decision to factor seems reasonable.

Invoice for 1st weeks hours is sent in knowing it will be paid in 14 days subject to satisfactory terms met; so they factor the invoice and receive 75% of the value immediately. They repeat this every week for 6 weeks. What is the cumilative impact on the business? Great they can pay staff wages but suddenly they are aware that the balance is critical and they are under pressure to meet increasing demands.

What if one invoice is challenged? How does that impact on the business?

Its not all negative, businesses survive and come through this but there is a valuable lesson in this for all business owners.

Playing catch-up on cashflow as a new business is a struggle because the gap is always widening is an unnecessary burden, Plan Strategically and work into the contract, no one wants to see the business struggle, so work with the goodwill.

Is Factoring wrong?  

Not at all but for a new start up with a limited customer base it is very dangerous. A single disputed invoice can break the bank.

Understanding the risk should create an awareness to exhaust all the other solutions.

The primary way to avoid the issue in the first place remains know the real costs of your operational activity, breakeven point, profit and investment calculations before you take on a contract, then  you know the impact of undercutting that price.

In the case to ponder above after three months a business was already losing 7%, it stripped out the profit, the Directors could not pay themselves, ending with another charge on the business for a mortgage..

1st Principle of Bidding

Understand how much you can afford to charge and what that unit cost or hourly rate covers.

Working with KKS Management clients we calculate three figures:

  1. The minimum you can afford to charge
  2. The clear contingency and reinvestment sum
  3. A real profit margin

Winning new business is difficult, invest well in the process and understand the financial needs of your business and factoring becomes a measured response to slow paying loyal clients that you can afford to carry.Essential Tender Quality mark

Grow carefully and sustainably! Looking to grab loads contracts at the lowest price is an unsustainable approach. Competitive Tendering requires more investment, knowledge and planning, this is the primary investment strategy every business needs.

Anyone can set up in Business but not everyone can make a success of it. Improve your odds by getting sound advice