It’s not exactly news that the charity and not-for-profit sectors are facing stresses and strains at the moment. Even before the Oxfam scandal broke earlier this year, charities were facing challenges; raising income; and maintaining their support base. The reasons for this are many-fold, but a major factor is a rise in the number of charities combined with reductions in public and government funding.
Historically charity mergers have been few and far between. In the year to March 2017 it was reported that only 70 mergers involving 142 charities had taken place. Charity Times recently reported new research revealing a list of charities that chief executives from across the sector think should merge to form “mega charities”. The research, published by Firetail, highlights the fact that despite extensive talk among the sector, there is a growing lack of mergers, despite there being clear benefits. Earlier this month the UK’s largest breast cancer charities announced their plans to merge to create “one comprehensive offer” which will “increase their campaigning voice”. If this is the case why aren’t more charities considering merging?
For many charities this is the time of year when the budget process is in full swing. You have produced the first version of the budget, but it will not be the last. The figures need to be verified, challenged and be subject to sensitivity analyst. What happens if income drops by a further 5% or pension rates increase more than expected, or the new project gets delayed for 6 months?
Aside from the challenge of funding cuts, increased demand on services and ever-increasing regulatory requirements, a number of charities continue to struggle with the recruitment of Trustees. On almost a weekly basis we hear from clients and contacts that are seeking new Trustees, quite often those with financial expertise. So what is it that's making recruitment so difficult?
Charities are generally good at conducting Trustee reviews on a Board basis, ensuring they are functioning well and acting in the best interest of the charity, identifying if there are any skills gaps and if the board is structured in a way which allows effective decision-making. Assessing Trustees on an individual level is when it becomes more difficult for charities though. As the title asks, what makes a good Trustee?
In research published by the Charity Commission in November 2017 it was identified that boards are not reflective of the communities that their charities serve, with men outnumbering women two to one. Following this report, there were a number of articles, perhaps harshly, commenting on the pale, stale and male make-up of Trustees boards. The Charity Commission, rather than enforcing action, has simply continued to encourage charities to ensure their boards reflect the communities that they serve. So a year on from the research has there been any progress towards increased diversity?
So often articles and guidance discuss what Trustees and Boards can do to support their charity and focus on what makes good governance. Our own charity page features numerous articles around this subject. But with so much of what a charity achieves relying on its Trustees and their support, what can the charity do to support its board? After all, it's expected that a charity would look after its staff and volunteers, so shouldn't Trustees be included in this too?
The Chancellor spoke for over an hour but it is difficult to see any direct help for the charity sector. There are a few points in the detail that are welcome but will result more in administrative savings rather than great impact.
Fraud costs the third sector £2.3bn annually. This is equivalent to 22% of the £10.3bn people in the UK donated to (UK) charities in 2017, making it one of the most significant expenses facing charities today.