Posted: 11th November 2014

Looking through a telescope we are immediately drawn to the brightest star in the sky.  Of course we’ll pan across the heavens marvelling at other constellations but the brightest make us look longer and closer.  The same goes for applications for funding, investment and loan finance.  

This was the overriding message from Deloitte and CharityBank at the “Business Planning for Social Investment or Loan Finance Masterclass” held in partnership with The Cranfield Trust.  Speakers agreed that business plans and applications for finance have to be geared to the reader, and to sparkle and engage attention.  

To shine with confidence, putting together a strong investor-related business plan is critical.  Collating and structuring information strongly, confidently and credibly is vital in communicating the investment opportunity.  Ben Davies and Tom Welchman from Deloitte outlined a winning structure for good business planning, starting with a short one to two page executive summary which can be tailored to different readers, but which communicates the key messages succinctly.

Business Plan Structure

  • Executive Summary
  • Background and History
  • Market and competitive environment
  • Offering
  • Customer strategy
  • Financial information
  • Social impact
  • Management, governance and personnel
  • Potential risks
  • Milestones and timescales; measuring success
  • Appendices

The plan has to include financial reports, variances and measures of risk – if you don’t think carefully about risks and how to mitigate them your plan won’t be credible.  Many non profits are not used to thinking in terms of markets and competitors – but competition for funding and finance is tough, and the Deloitte team pointed out that competition can also come from changes in policy moving interest and support away from your services.  

On the financials, Ben and Tom emphasised that ‘cash is king’ and cashflow forecasting is essential – not just to year end but at least as long as the funding requirement.  That is, if you’re applying for 3 year funding your cashflow must be at least 3 years.  Other useful tips for financial presentation were to use ‘call outs’ to spotlight key numbers in financial tables, and graphs to present numbers simply.  They underlined the importance of pointing out the assumptions behind your plan – you will be making them, so make them clear to readers.

Another good tip from Ben and Tom was to use stories to explain risk and need, with pictures to get information across strongly and fast.  Pictures and quotes can also support information about impact, but won’t do the whole job.

Articulating impact is tough for everyone, but Leonie Kelly from Deloitte approached the subject with keen enthusiasm and a smart process which emphasised that the best shouldn’t be the enemy of the good – working on measuring impact is valuable, even if your impact processes aren’t perfect yet.  Leonie’s presentation put forward a large number of useful ideas, but summarised them as:


Indicators – clearly defined parameters
Measurement – metrics are required to be quantifiable
Positive Outcomes – must be beneficial to society
Attribution – outcomes need to be attributable to the service provider
Cashability – cash savings to the commissioner
Transparency – clear visibility of results and savings throughout the process is critical

Armed with your plan, you’re ready to go to market.  Tom, Ben and Leonie handed over to Paul Davis from CharityBank, who talked through how to win the confidence of investors and lenders.  The elevator pitch is key in starting a conversation with a potential funding partner, and opening the door to more detailed discussions.  It’s essential to invest time with your team to get it right and to make sure you build trust and credibility from the start.  A great elevator pitch will capture attention and focus attention on your story, your people and the social and financial returns you provide.

For Paul, people and skills came out very strongly as factor in making a decision to lend, they’re an important indicator of ability to deliver.  He suggested that an ideal Trustee Board mix for a small/medium size charity, from a lender’s point of view, would include a solicitor, local councillor, banker/accountant, HR specialist and people that are good at what you do, for example, doctors, teachers, therapists.  Including CVs of your board members and senior management team strengthens your business plan and gives credibility.  It may be a surprise for some but good Linkedin profiles are powerful, especially when looking to see whether trustees are well connected and respected.  Take note, Fund Managers look at Linked in!  They also check out the Charity Commission details to see whether a Board member holds other trusteeships.  If they’re on the board of another well respected charity it’s a big positive.

The Story – the performance of the business to date, the consistency and viability of its plans
The Return – the social and financial risk/reward of the investment
The People – who are the people that are going to deliver the promises

Dragons’ from The Cranfield Trust, CharityBank and Deloitte made up a panel for delegate charities to practice their pitches.  The presenters were knowledgeable and compelling, and the dragons’ advice helped them to hone their pitches further, focusing on the most compelling parts of their stories.  The top tips were 

  • Do your research: find out about who you’re presenting to and what they need to know about you and your proposal – tick their boxes
  • Put your strong points up front – win attention from the start with the key facts relevant to your proposal
  • Make a few important points slowly and clearly; what’s coming in, what’s going out and who you are
  • Why do you need the investment and what is it for?
  • Your organisation’s story is a chance to show how you’ve learned from past experience
  • Make sure you have done your competitor analysis and can describe your market
  • Be aware of any assumptions you’re making in your plans, and highlight them in your presentation
  • It’s about relationships!

Adding sparkle to your business plan and preparations for raising funds adds value to your organisation through the process of planning and working with lenders, funders and investors.  The bright stars of the masterclass will shine for real in delivering their work funded through social investment or loan finance – building on the great advice from the stargazers from Deloitte, CharityBank and The Cranfield Trust.