As trustees, and the people responsible for running your charity, it’s important that you regularly review your charity’s effectiveness. What challenges are you facing? Is the charity’s structure effective? What changes are you considering implementing?
It’s especially important to review how your charity operates in changing or uncertain economic climates. No charity is immune to financial problems and sadly there are occasions when, despite the best efforts of the trustees and staff, a charity encounters problems so serious that it has to close.
One such example is The BeatBullying Group, which went into liquidation in November 2014 after experiencing serious grant funding problems. Our operational compliance report explains why we got involved and what happened.
Many charities face similar financial problems. It’s not easy to maintain a charity’s secure financial future, particularly in a difficult and competitive economic climate. That’s why it’s so important you and the other trustees ask yourselves tough questions from the outset and regularly consider how your plans are going.
One way you can do this is to refer to our checklist of 15 key questions whenever you meet as trustees to make decisions about the way your charity operates.
Part of our ‘Big Board Talk’ series on trustee decision-making, the checklist covers all stages of the financial cycle. It’s designed to help you respond appropriately to change by developing plans and timetables for action. It supports general good practice as well as how to deal with situations like the one BeatBullying faced.
Even if things seem to be going well, don’t become complacent – make sure you regularly consider your charity’s financial resilience. For example, your business plan should set out how you will manage identified risks like an over-reliance on grants or a lack of reserves.
You can also read our financial guidance:
- Charity financial reserves explains how to set a reserves policy for your charity and work towards a point where you are able to put money aside
- Financial difficulties in charities advises how to deal with tough situations if they arise
- Managing charity assets and resources gives an overview of how to manage volunteers, investments, cash and staff