Stability for the Organisation
The survival and adaptation of our partner charities over centuries demonstrate their organisational stability. Growth can increase the charity’s stability with new partnerships and increased income from charges paid by residents. Demolishing and replacing outdated almshouses on the same site and building new almshouses on new sites can provide opportunities to increase and improve the charity’s housing stock to meet current and future standards, including for climate change: see Energy for further discussion. Some partners were also expanding by acquiring additional almshouses from other charities in their locality.
For existing almshouses, upgrading to meet current and future needs will provide better housing for residents and increased income from charges. For example, many almshouses were originally bedsits which are no longer suitable, especially for older people with disabilities or long-term health conditions: see Architecture and Adaptation. Unless they have been converted to larger dwellings, they no longer meet modern standards. If almshouses are hard to let and remain empty, the loss of income from charges paid by residents can impact the stability of the charity.
Stability requires sound financial management by trustees and staff, to enable the charities to survive and thrive, and to maintain and improve their almshouses. The level of their charges to residents can be crucial. As one trustee explained:
“… our income like most almshouses, unless they’ve got a very strong legacy income, is primarily taxpayers’ money through Housing Benefit. And that, as you know, is under strain”
(Governance 13)
Weekly Maintenance Contributions (WMCs) for almshouse residents are similar to rent but different in law, because almshouse residents are not tenants. They occupy their accommodation under a licence because they are ‘beneficiaries’ of an almshouse charity. The status of almshouse residents is discussed in Charity Governance. Our partner charities set their Weekly Maintenance Contributions at a level eligible for Housing Benefit, enabling them to build up reserves for future repairs and maintenance. Access to benefits advice internally or externally is very important for resilience and stability, both for their residents and for the stability of the charity. Partner charities tended to provide benefits advice in-house or via links with external agencies.
Local Housing Allowance (LHA) is set by each local authority under central government rules for Housing Benefit claims. LHA is based on a percentage of local market rents across a broad area for private lets: wealthier areas may have higher LHAs than disadvantaged localities, but as an interviewee reminds us:
“they have similar costs, their utilities are the same, their contractors probably charge not far off the same. So they’ve got more rise in costs but possibly lower income”
(Governance 23)
Even if charities in areas with lower LHAs charge up to LHA levels, there may be less opportunity to build up reserves. Amongst the small charities supported by our partners, there were examples where charges had not been increased over time, leading to both a lack of financial stability and a risk of failure before some of our partner charities became involved.
Some almshouse charities also have other functions: our partners included charities with care homes, and some made grants to local organisations. If a charity has other functions as well as its almshouses, the balance between different functions can impact the overall stability of the charity. However, other functions can sometimes increase stability. For example, one partner’s well-reputed care home and another partner’s grant-making helped them to develop links with a wider range of local third sector voluntary organisations. Such networks can be beneficial for stability in many ways, discussed in Building Community outside the Organisation.
There can be particular challenges in planning ahead at times of economic, political or social uncertainty. This creates delays, uncertainty and cost increases for charities, especially those with building projects. Financial planning is more complex for charities with significant endowments: this can include investments, land or buildings left to them by founders and benefactors. Depending on type and location, the value of endowments can change over time:
“The land around [location] which we’ve owned for 400 years has hugely increased in value in the last 10 and 15…[leading to our] very professional grant giving programme. “
Governance 20
This also means that some charities have been able to build new almshouses using their own resources, with little or no external grant funding.
Effective risk management is essential to ensure stability, including updating risk registers, and taking account of reputational risks for both their own charities and for the wider almshouse movement. A senior staff member explained why it is essential to investigate before taking on other almshouse charities, because even after investigations including surveys, there can be significant future problems and reputational risk:
“We need to do due diligence, because what we don’t want to do is take on a complete nightmare that drags our reputation into the frame. … we might do a survey but surveys only go so far. Five years down the line … suddenly a big hole opens up in the middle of the floor”
Governance 17
Other examples of risks can include hard-to-let properties because of low demand, and increasing arrears of Weekly Maintenance Contributions. These risks can be mitigated by selling properties or redeveloping sites, and by effective monitoring and sensitive management of arrears alongside welfare benefits advice.
