A Passion for your charity isn’t enough
Clearly a passion for your charity isn’t enough as austerity measures show no sign of abating. A focussed business-like approach to running your charity is essential. Some local authorities in 2015-16, having saved costs in prior years by stripping out layers of management, are now having to extend cost cutting by reducing funding to some service areas that seem to have been protected in the past, e.g. children and the elderly.
You might find the following helpful:
- Basic financial controls should always be implemented: regular bank reconciliations, authorisation of expenditure at appropriate levels; monitoring actual performance against budget etc.
- Employment contracts for staff should match the period for which the related funding is received and the staff are aware of this when appointed.
- Creating good close working relations with funding decision makers from local authorities and government quangos need to be worked at.
- A fundraiser who has been successful elsewhere can be worth their weight in gold. Let some other organisation take the risk of employing someone who has no fundraising experience.
- Funders often don’t like to fund core costs. Be creative with your funding applications, ensuring project funding applications cover as large a proportion of your overheads as is reasonable.
- Present your balance sheet to funders in the best possible light. Reduce your free reserves if excessive by designating funds for new projects for which you have no funding.
- If you need a bank loan or overdraft in the future, plan your funding needs and put in an application early. Bankers are only human. Last minute applications send a message of poor planning and poor management and make bankers nervous.
- Plan a cautious budget. It is always better to outperform the budget at the end of the year. Your trustees will then be happy.
In conclusion run your charity as a business. A charity is just a business with charitable objectives.
For more information contact Laura Masheder
Garbutt + Elliott Charity Accountants in York and in Leeds