Charities risking complacency on financial governance, CFG warns

14 Nov 2017 News

The Charity Finance Group has raised concerns about the standard of financial governance in the sector, warning that “complacency is not an option”.

CFG has partnered with MHA MacIntyre Hudson to produce a report on this issue, saying that there is “plenty of evidence (anecdotal and otherwise) that concerns exist”.

The report backs this up with a survey of 120 charities, finding that while respondents were relatively confident about their financial governance, there was a low level of appraisal of charity boards. 

For example, while only 12 per cent of respondents felt they had a poor or inadequate understanding of financial governance, 47 per cent “never” or only “occasionally” assess the effectiveness of their financial governance. 

Furthermore, 59 per cent said their charity does not budget for trustee training, and less than one in five respondents said they have “the complete skills and knowledge required to fulfil their responsibilities”. 

Just 49 per cent said they had used the Charity Commission’s latest guidance on charity finance. 

Speaking about the findings, Andrew O’Brien, director of policy and engagement at CFG, said: “This report is an important wake-up call for the charity trustees and executive teams. 

“Every charity should be regularly assessing its skills and understanding at board level to ensure that it has the ability to govern itself financially. 

“There are lots of resources out there, but charities need to make a commitment to using them. Complacency is simply not an option.”

Sudhir Singh, partner and head of not for profit at MHA MacIntyre Hudson, added: “Strong financial governance is a major contributor to successful and effective charities, so while we don’t want to be overly critical of the good intentions of most trustees and charities, it is difficult to escape the very clear conclusion that many people just need to do better.”

 

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