A future-proof charity

AS MANY charities are feeling t h e p i n c h o f cuts in government f unding and with t he media reporting on potential changes in fundraising regulations, robust planning is essential to future-proof your charity.

PLAN TO SUCCEED, BUT BE PREPARED FOR FAILURE

The time required to develop and maintain a business plan can be significant and some would consider it a waste of charitable resources. However, the process of writing the document provides the perfect opportunity to address the risks the charity may face when striving to meet its objectives. In addition, the final document will act as a focus for the charity, by ensuring the board of trustees and the management are working toward common goals.

If the risks identified do come to fruition, the fallout can lead to a barrage of negative publicity. While planning for such a situation is difficult, it is important for charities to develop a crisis plan, setting guidelines for not only dealing with the media but also managing the day-to-day affairs of the organisation, reducing adverse impact on beneficiaries.

BALANCING THE BOOKS

The Charity Commission states that it is the responsibility of the trustees to ensure the charity remains solvent. To do this it is necessary to undertake regular reviews of management accounts and ensure systems are in place to monitor and restrict overspending. Such procedures do use vital resources but they are a must for all charities.

The shocking collapse of a highprofile charity has left us all wondering: “How could this happen?” While there are obviously several factors contributing to the charity’s demise, the media speculated that a lack of financial control might have had an effect.

THE FUTURE IS TRANSPARENT

The credibility of the sector took a hit after reports that Olive Cooke, 92, sadly took her own life after being inundated with fundraising letters. Although her family denied this was a factor in her suicide, it shone a light on the fundraising practices of UK charities.

The media continues to report that fund-raisers are targeting vulnerable people and to call for more regula- tion. The Fundraising Standards Board issued an interim report on June 9 detailing its main recommendations. These included setting a maximum number of times a charity can contact a donor per year and considering how communication methods could be adapted for vulnerable people.

Implementing the above guidelines could result in a hefty overhaul for some charities, who will need to educate fundraisers to ensure that they are not placing undue pressure on donors. If the guidelines are brought into force it may be easier for donors to make claims of negligence against a charity, increasing the risk of negative exposure and financial penalties. These changes may be necessary to protect the donating public but they will create further training costs and professional fees for already struggling organisations. HW Fisher & Company is a top-30 firm of chartered accountants and its charities group is one of the leading professional advisers to the voluntary sector working with more than 300 charities and notfor-profit organisations. Michelle White is a manager within the charities group, specialising in dealing with the challenges of this sector. For information or for specific advice, call Michelle on 020 7874 1196, mwhite@hwfisher.co.uk

Writing a business plan can help charities to minimise financial risks