Trustees have a legal duty to look after their charity’s money and other assets. They need to understand and keep track of their charity’s income and spending to spot any issues as early as possible to prevent them from affecting the charity’s success.
Here are some key tips from the Charity Commission’s wide ranging guidance on financial issues.
• be able to recognise at an early stage when the charity is no longer viable and plan for what will happen to beneficiaries, staff and assets
• develop a policy on reserves which establishes a level of reserves that is right for the charity and clearly explains to its stakeholders why holding these reserves is necessary
• recruit trustees with time and the right skills and experience to understand their finances and plan strategically for the future
• hold regular trustee meetings to keep track of income and spending
• put internal financial controls in place to make sure all spending is properly authorised
• review sources of income – are there any new opportunities?
• regularly review planned and proposed expenditure – can they do anything better or stop doing something altogether?
• regularly review their risk and risk management policy