Understanding risk and resilience across the third sector

Stephen Miller, Director of Impact & Learning, Power to Change

When the pandemic struck in early 2020, many charities, social enterprises and community businesses found that, while a hole in the roof is ok when the sun is shining, it becomes a problem when the weather turns. Overnight, organisations that had been putting off reviewing and improving their business models realized they could put it off no longer. Meanwhile, many funders found themselves having to do something they’d rarely done before – get money out the door fast.

This was our experience at Power to Change. But the detailed data we had access to helped us understand which community businesses were most at risk, and allowed us to target our support quickly. It also highlighted there was a need for more data, to better understand the levels of risk and resilience across the entire third sector, not just within our portfolio.

We have been supporting MyCake, who specialise in financial benchmarking for the third sector, to develop standardised metrics and algorithms to identify risk and resilience. We welcome three papers from MyCake which provide an excellent overview of why an innovative approach like this is needed, how it was developed, and how it can be used. This is groundbreaking stuff. This has rarely been tried before, and certainly not at this scale. And it is important. Maybe never more important than now. As we move towards recovery, we cannot take the problems of old into the new world with us. The hole in the roof needs to be ­fixed once and for all, which means third sector organisations and their funders using data like this to better understand risk and improve resilience.

You can read the papers on MyCake’s website:

  • Paper I sets out MyCake’s research to develop the approach
  • Paper II covers the work programme & methods in more detail
  • Paper III outlines some worked examples to identify how the approach can be used

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