Your time needn’t be numbered!

In the recent past the need to reconsider, re-imagine and reflect on the ways we have financed our charities has been underlined as we dealt with the perfect storm of rising demand and shattered income as a result of a global pandemic, cost of living crisis and global political, economic and social uncertainty.  

Life has thrust its proverbial hand under the tray of our income and expenditure models, sending all the pieces flying into the air. Understanding the numbers is critical to running effective social change organisations. But many feel excluded by the numbers, are fearful of and view finance as, a dark art. It’s not as inaccessible as many would have you believe. I have worked with and for charities and community organisations of all sizes and what I have picked up along the way has shown me that great financial management is essential for all well-performing social change organisations.  

How do you get it right?  

Make sure you have the right skills available to your charity 

Too frequently I see charities trying to squeeze a lot into one role or assuming they can only get their finance needs met in house. But the reality is that a well-managed finance function is made up of different elements from the processing of numbers to understanding how that data can transform your fortunes. These different elements require different knowledge, skills and experience. If you try to pack it all into an individual then you may find yourself with a senior (and costly) resource that is ill equipped for the basics or a bookkeeper who feels unable to give strategic direction. Conversely if you understand your needs and are open to a blend of different roles, paid and or voluntary you can place financial leadership at the heart of effective decision making. 

Know when to engage and what questions to ask 

Do you find yourself saying ‘ah yes, but we have an accountant/treasurer, so I don’t need to worry about the numbers’ or ‘I’m a cause, not a numbers, person’ and stepping back from the financial content? Whether you are one of the ‘why have a dog and bark yourself?’ brigade or the ‘I don’t need to know’ tribe, please recognise that numbers are important to us all. I have heard it put beautifully that you cannot change the world unless you can balance the books!  

Remember: Money may not be the end in itself but without it the charity’s achievements can be limited 

Charities are not here to generate a profit to return to shareholders of course but if you can generate the right level of resources, if you can understand your business model, if you can get to grips with the numbers, you stand a greater chance of getting ahead of risks and problems – ultimately leading to a more sustainable charity. There is also another side – the level of responsibility that comes with a variety of roles – rarely will ‘not knowing’ or ‘not asking’ provide protection if the proverbial hits the fan. 

Today, we are facing more pressure on our income and expenditure than ever before as money gets stretched thinly by increasing demand and rising costs. Taking time to understand the finances is time well spent – it will help you make better decisions, provide you with more confidence that you are alert to the true health of your charity and help you explore solutions to ensure you keep serving the causes close to your heart.    

About the author 

Caron Bradshaw OBE joined CFG in 2010 from the ICAEW where she was Head of the Charity and Voluntary Sector. In addition to supporting a number of small charities and community organisations Caron has been a member of the NCVO’s National Assembly and the Charities SORP Committee, has sat on a number of government working parties, is a member of the Church of England Pension Board’s Audit and Risk Committee, and former Chair of the Board of the Directory of Social Change.

Caron will be running a session at DSC’s Good Governance Matters conference called ‘A Trustees Responsibility in Understanding Finance’.

Find out more and book your tickets to Good Governance Matters, on Tuesday 31 October, here now.