Charity finance teams were called on to lead the sector’s response to the coronavirus crisis, according to a survey.
One finance director said that their team helped colleagues deal with a “changing situation week by week” as it handled fluctuating budget projections and unstable investments.
Finance experts in the survey, conducted ahead of Charity Finance Week, which starts today, were almost unanimous that their teams had been at the heart of charities’ work to adapt to the pandemic.
Very busy months
One finance professional explained that they had been asked to attend regular senior management meetings during the early months of crisis because “financial sustainability was at the heart of what we needed to preserve”.
With the impact of lockdown, and sharp falls in income across the sector, charities were forced to reopen budgets and reorganise their cash-flow plans. There was “lots of [financial] modelling going on in the first couple of months”, said one charity finance professional.
A finance director at a medium-sized culture charity said: “I was involved in all of the decisions made by the senior leadership team and the board: preparing regular reforecasts and projections, and flexing budgets to take account of the changing situation week by week.”
Planning for uncertainty
At one very large health charity, the finance team said it was undertaking “more detailed cash-flow modelling, with a detailed 12-week rolling forecast”. This was in addition to “regular reforecasting across all areas of the business, and a more detailed 24-month forecast to scenario plan and stress-test assumptions more rigorously”.
One finance director at a medium-sized hospice charity admitted that, amid the turmoil caused by the pandemic, their charity has “abandoned the budget and instead [we] constantly refresh our forecast”.
The annual budget is “a live document, pretty much”, said one culture charity.
Adapting to government schemes
Finance leaders said that they also had to cope with a number of complex new government policies and schemes, which were often announced and altered at short notice.
The chief financial officer at a medium-sized heritage charity said: “We applied for the Business Interruption Loan [which] required a very high detail in forecasting.
“The calculation and administration of the Job Retention Scheme has been a nightmare, and we increased the number of grant applications, made which are very information-intense.”
The full survey data is discussed in November’s Charity Finance magazine.