News

Missing the point

Finance | 1 Apr 2005

The sad plight of the National Missing Persons Helpline and its battle against insolvency has been much publicised. It estimates that it now needs £4.1 million a year to run its helpline, far in excess of its reported income of £1.7 million that comes from private trusts, companies, individual donations, events and grantmaking bodies. A statement was issued by the charity last month saying that unless it received an immediate injection of £300,000 government funding it would be forced to close at the end of March. It blamed the fact that fundraising has always been a struggle, especially as people think it is a government agency or something to do with the police. In reality the government has never provided more than 15 per cent of its total income and only ever project funding.

NMPH duly received the money and was always confident of doing so. If it ceased to exist it would have far reaching cost implications for government departments, local authorities and the police who would have to take over its work.

But is there an argument for saying that the government should not have helped out? If the sector is to be taken seriously, it needs to be run professionally. Things do not always go to plan but perhaps a charity running a deficit in five of the last six financial years, including nearly £200,000 in 2003-04, should have been aware of these difficulties sooner, especially as it admits that in the last three years several large fundraising events were either cancelled or postponed leaving a hole in projected budgets.

Yes, the work that NMPH does is vital and is a great example of a charity being set up to do something that nobody else was doing. But will bailing out them give the wrong message? Could other charities doing equally vital work take a less than rigorous approach to budgeting and finances if they think there is always going to be a government safety net? The sector�s need to lose its amateur, woolly image, and be seen as comprising well run organisations making a difference independent of government control is not helped by stories such as this. Put harshly but simply, charities cannot have it both ways.

Banking on a change

This year�s banking survey once again provides an in-depth look at the service charities receive from their banks. However, it seems that some of the messages coming out are little changed from four years ago. The relationship a charity has with its bank is surely as important as that with any of its professional advisers. Aside from the financial advantages of paying low fees and securing attractive interest rates on cash deposits, an efficient, reliable service from a bank that understands the needs of both the individual charity and the sector as a whole is vital to a well run organisation. And as our survey respondents indicate this year, charities are aware of this. As they have been for a number of years.

But despite the growth of specialist banking teams and products over the last few years to address this, there continues to be great inertia and resistance to changing bank.

The reasons for this mirror the reasons why most of us never get round to changing our personal bank accounts despite much whingeing � it�s just too much hassle. Although the banks claim that systems in place now cut down the  disruption to charities, especially in areas such as changing direct debits, the sector remains unconvinced. Charities also point to a difficulty in obtaining useful comparative information especially on transaction fees.

Whatever the reality, there is clearly an onus on banks with sound propositions to get the message across about the benefits of switching, and to make it as easy as possible. And there is certainly a duty upon charities to ensure they are getting the best service much the same as they would with auditors and fund managers.

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