Additional management

Being a good charity manager includes being a good people manager, as the articles below show.

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Writing a business plan for your charity

Running a charity is a rewarding experience, but it's also something that requires a great deal of foresight and planning when it comes to ensuring that it functions successfully. Charities need a good business plan to ensure they meet their aims. For existing charities, a business plan is an opportunity to look forward in a structured way.

As soon as a charity launches, it's important to have a business plan in place. This is because an interested party may ask to see the plan, and if somebody makes a sizeable donation, the funds can be used to fulfil specific aims.

Writing a business plan will be beneficial for your charity in many ways and it means you will be able to use it to refer to and help you in the future. You should revisit the plan each month so you can make sure your charity is on track and you have met your goals.

Why a business plan

It's important for you to consider the reasons why you're writing a business plan, and you need to know who is going to use it and who will be in charge of implementing your ideas. Charities use business plans to help with their strategy, and they are also used to improve management.

It's common for charities to create business plans they can use internally to manage their work in a more sustainable way. It's also worth pointing out that charities will often share their business plan with potential donors. Whether you're looking to improve your management, secure funding or are looking at your long term goals, a business plan is a vital document.

As a charity, it's unlikely you'll be writing a business plan to apply for loans, but it's a good way for you to get your key staff to understand your vision and goals as well as what your plans are for the charity. A business plan enables you to focus on what is important and how you will finance this in a sustainable way.

A business plan is a personal document and even after you've written it, you can adapt it so that it reflects your current circumstances. Business plans are considered as fluid documents that can always be amended.

Assessing your charity’s role

Existing or potential charities should undertake an analysis of their current or intended role - they ought to research what the specific focus of their work should be. As part of this process, they should often find out if the intended (or current) market is in need (still) of a charity like the one they're hoping to launch (or continue with).

Established charities would undoubtedly benefit from this process and it may allow you to consider if your charity is achieving your aims in the best possible way. It's important to consider what impact your current plans and activities have had.

When undertaking a role assessment, it's important to research other charities in the area which are targeting the specific market you are targeting. Doing this allows you to make sure the service you will offer is effective and you aren't doing something that is similar to other organisations.

When it comes to planning a new charity, it's important for you to get as much information as you can before launching so that you are confident what you're proposing will be a success. Businesses undertake market research during their plan and it's advised that charities do the same.

When writing a business plan for your charity, it's important for you to remember that your activities will evolve and the document is just the beginning. It needs to be used in your ongoing development.

What you should include

EXECUTIVE SUMMARY. An executive summary is the first section of your plan that people will read, and it acts as an overview of what is included in the plan itself. It should give a snapshot of your vision.

When writing an executive summary you need to think about the bigger picture and summarise key information by making it clear who you are, what you want to achieve and how you're planning on meeting your targets. Many people may only read this section of your business plan so you need to make sure that you include the most important information.

INFORMATION ABOUT YOUR CHARITY. This information should expand on some of the details given in the executive summary. It should include information about who you are and what you do. You should discuss what your vision is, where the idea for your charity came from, what shape it is in, the legal standing of your charity and what products and services you offer.

As part of your business plan you need to discuss some of the finer details of your charity. Think about how important your charity is. If the service you're providing helps to save lives, shapes the local community or has a global impact, you need to explain how your charity is doing these things.

Offer plenty of details when covering this section because you can write about what you’re currently doing as part of your work but also what you'd like to achieve in the future. It allows you to discuss what worked well in the past, and what your current successes are.

UNDERSTANDING YOUR MARKET. Being able to show that you understand the market is important and you need to make sure that you include information about any stakeholders involved, as well as customers and donors.

It's also important for you to analyse the market by undertaking relevant research. Market research is a part of the planning phase so it's important for you to outline what you've done so far that has informed your decision-making process.

In this section you should also include what your marketing strategy is and what your plans are going forward. Marketing is an important part of any charity as it allows you to reach your intended audience, and by implementing a strategy, you have a greater chance of success.

Undertaking a SWOT (strengths, weaknesses, opportunities and threats) analysis is also a good idea, as it will give you an understanding of where your charity sits in the current market. It allows you to show that you have considered your position, and there are opportunities for your charity to grow.

Adopting an operational perspective

PLANNING FOR DAY TO DAY OPERATIONS. Your business plan should outline how your charity functions. Consider including information about what resources you need to ensure your charity runs smoothly, as well as people and other organisations you may work with.

As with any charity, it's important for you to have dedicated premises that you use for your day-to-day operations and the necessary equipment to undertake the CORE function of your charity. As part of this section, you should also address any legal obligations you may have.

YOUR CHARITY’S KEY PEOPLE. Provide information about the key people for your charity and address any changes as part of your plan. You may wish to include biographies for management personnel, trustees and details of any planned changes to your staffing structure. You may outline any skills gap you have at present and what plans you have in place to address this.

YOUR CHARITY’S SOCIAL IMPACT. Your business plan should show what social impact you think your charity will have in the future. Social impact refers to the way you make a difference to the people and communities that your charity will serve. This section needs to be clear and you should describe what impact your charity is currently having on these communities.

You should include information about what social change you want to make in the future, how you're going to measure this and how you'll use the things that you learn to develop further.

SUMMARISE YOUR FINANCES. You need to include a summary of your finances, which should outline your costs and expenditure, what your main source of income is and any pricing strategy you use for products and services. You should also use this section to include forecasts as they play an important role in a business plan.

Risks you face

Consider what risks you have when it comes to the various aspects of your charity. You may include any relevant external, regulatory, financial and operational risks.

You should take time to explain what the likelihood of each risk is and how you plan to manage each risk, ensuring that you give details of how these risks may impact your charity.

Ultimately, a business plan is an important document for your charity because it allows you to make sure that your plans are clearly set out and that you have a strategy in place to achieve your goals. For both potential and existing charities, a business plan is a document for the future.

PPS’s Sally Holland – charities use business plans to help with their strategy, and they are also used to improve management.;
"Being able to show that you understand the market is important and you need to make sure you include information about any stakeholders involved…"

Avoiding making bad charity appointments

The costs of making bad appointments at a senior level are massive and can be particularly damaging for charities with finite resources.

The Recruitment and Employment Confederation estimates that hiring mistakes cost UK business billions each year in wasted salary, loss of productivity, training and staff turnover costs. In addition to monetary losses, having the wrong person in place, particularly at a senior level can have a huge and negative impact on an organisation’s reputation and staff morale.

This wider negative impact of poor recruitment is likely to be felt more keenly in the charity sector which attracts staff who are concerned with working for causes they believe in. Poor leadership or “the wrong fit” and a sense of the charity losing momentum or taking a backward step can have a widely felt impact on staff. It can result in an increase in absenteeism, a loss in productivity and staff retention and, ultimately, a poorer service for the charity’s beneficiaries.

Precious reputation

The reputation of any charity is incredibly precious. It relies on this to attract funders and, as we have seen in a number of high profile cases in recent months, when it is damaged the consequences can be disastrous. A CEO or other senior team member plays a significant role in the outside perception of a charity. A person with the wrong attitude or someone who doesn’t appear to be up to the job will soon be noticed by peers throughout the sector and potential funders.

Leading a charity is challenging. Each charity is different and will require leaders with specific skills in order to keep employees motivated and happy. Recruitment is not an exact science and mistakes can be easily made. The following tips present some options on how to maximise the chances of getting it right:

THINK THROUGH WHAT YOU REALLY WANT. Take time in advance of the process to consider who you’re looking for. It can be dangerous to fixate too much on the predecessor in making appointments. If you try to fill the shoes of a high performer, you may forget that they left as someone more polished and developed than when they came in.

Similarly there can be dangers in swinging the pendulum aggressively away from what you had in the past. Think as objectively as possible about what it is you really need.

CONSULT WITH STAKEHOLDERS. Speak to your funders, beneficiaries and junior staff about what they’d like to see in a leader and take their opinions on board. You may choose to invite representatives from these groups to be on interview panels or to take part in assessment days. You may want to be clear that it is not a democratic process, but including others, and seeking to triangulate you own perceptions, can be very important.

Different contexts

TAKE TIME TO GET TO KNOW YOUR CANDIDATES. One or two short interviews will not give you an accurate and rounded impression of your potential recruit. Narcissists often perform well in a single interview but could be a disaster for your team. Aim to meet your candidates several times in different contexts including informal and more formal settings, small and larger groups. and one on one meetings.

GATHER INFORMAL INFORMATION. Use your networks to find out more about the reputation of your candidates. Seek out examples of their work in previous organisations and evidence of public speaking and media relations work to gauge their suitability as a spokesperson for your charity.

AVOID GROUP THINK. Interview panels should be diverse and each member should have an equal chance to voice their opinions. To encourage different perspectives, consider using separate sub-panels to undertake short, focused discussions with the candidates about targeted areas of the role.

CONSIDER USING PSYCHOMETRIC TESTING TO ASSESS ABILITIES FOR SPECIFIC SKILLS. Behavioural traits and personality can be hard to gauge during interviews and, while testing of this kind isn’t particularly helpful in isolation, triangulating data as part of the whole recruitment process can give you a much better all-round view of a candidate's suitability.

GUARD AGAINST UNCONSCIOUS BIAS. Unconscious racism, ageism and sexism can have a problematic effect on judgment. Take steps to avoid it by ensuring panel members have taken unconscious bias training and by selecting a diverse panel. This might include having external advisers present.

Using referees

CONSIDER REFERENCES CAREFULLY. Rather than using the reference process as a tick box exercise for HR purposes, consider each one before making your appointment. Informally approach referees who, if possible, are outside the names suggested by the shortlisted candidates if possible, but only at a very late stage of the process.

DON’T RUSH. Build time into the process from the beginning for extra checks and consultations so you don’t feel pressured to make a quick decision.

DON’T MAKE AN APPOINTMENT IF IT DOESN’T FEEL RIGHT. The consequences of recruiting the wrong person can take a long time to resolve. It’s better to go out to market again than make a decision you’re not sure about.

Planned process

The negative impact of making a recruitment error is clear, but a well planned process will not only help you avoid costly mistakes but also increase the reputation of your charity as a thorough and well respected employer and a professional organisation. In an increasingly competitive market for charities these high standards are well worth investing in.

Minerva’s Ben Tucker – if you try to fill the shoes of a high performer, you may forget that they left as someone more polished and developed than when they came in.
"Interview panels should be diverse and each member should have an equal chance to voice their opinions."
Deloitte advert

Engaging with employee benefits information

For many charities, salaries can often be more restricted than in the private sector. However, that being said, the charity sector is also arguably made up of people who want to make a difference, and salary isn’t always the driving force for many working in this space. In fact research suggests that a person working for a private company would have to earn another £27,000 per year to be as happy as their not for charity counterparts.

These sorts of statistics already stand you in good stead; however, charities still need to make every effort to compete against the private sector. A robust employee benefits package can be a great way to do this as it offers a perfect opportunity to offer additional, cost effective rewards, particularly when budgets are tight.

It is also widely recognised and well documented that a good benefits package helps employers of all kinds with attracting and retaining talent, and sets you apart from your competitors. Good communication and the benefits you offer can be a great way to showcase a charity’s values and engage staff in the overall mission.

Difficult challenge

This is particularly important in a world where attracting and retaining top talent is becoming an increasingly difficult challenge for employers, as we move away from the typical ‘career for life’ and see people moving jobs far more frequently. Benefits give employees confidence that they are valuable to your charity and that you have their best interests in mind.

It is also a great way to demonstrate to your charity’s staff that you care about them, their families and their welfare. I believe that the more we can engage staff with their benefits, the greater their wellbeing and productivity, and the better connected they’ll feel towards the charity in question. However, to be successful it’s vital that this is effectively communicated to employees and that you have fully understood what they want and need from such a package.

After all, you can offer all of the benefits in the world, but unless you understand your people and what they want, you risk your employees not valuing them.

So, how do you make sure you engage your employees with their benefits; how do you help them understand their value, providing a return on investment for you, and make sure you continue to have happy employees?

COMMUNICATION IS KEY. There is little point in offering a good benefits package, unless you take the time to tell your employees about it. But what constitutes effective communication will vary according to each charity. The points below are what I believe to be the key ingredients when communicating for increased employee engagement:

  • Authentic tone, honesty and openness.
  • Consistent, concise and clear messaging that communicates the goals, purpose/direction of the charity and how the employee can help achieve it.
  • Transparency with evaluation and accountability.

HOW YOU SHOULD BE COMMUNICATING. There’s no right or wrong way here, and there certainly won’t be a one size fits all solution. We know that time and budget constraints are often factors in determining how we communicate and I’m sure this will play a part in your own communication activities. However, there are some considerations that can be applied when it comes to communication and engagement.

Clear understanding

DEVELOP A COMMUNICATION STRATEGY. It’s important that you know and understand what you want to communicate before you set about telling your employees. Clear and easy to understand communication is probably the most important part of any successful strategy. Unless you have a clear understanding about the message you want to get across, you can’t expect your employees to understand either.

As well as more obvious milestones such as the recruitment and onboarding stage, there are a number of other checkpoints or timings that you could think about pegging a strategy to. For example, you may wish to plan your benefits communication strategy around renewal dates, or perhaps highlight a different benefit each quarter.

CONSIDER YOUR COMMUNICATION FREQUENCY. How often you choose to communicate your benefits will be determined in part by the communications strategy you develop in your charity. With regular communication activities you are more likely to reach your audience and see them taking action, as what they weren’t interested in first time around may be applicable to them now. For example, if you promote a cycle to work scheme just once a year, take-up may not be as high as if perhaps you promote the scheme at the start of the year and again in the summer months.

MULTI-CHANNEL COMMUNICATION. Where possible, I would always suggest that a multi-channel communication approach is best. There are so many ways that we can get our messages across; email, printed material, face-to-face, online, digital, so we shouldn’t rely on just one method. Of course, you may not be able to use all of the methods mentioned, but even just a couple of different communication methods will make a difference to the engagement you get.

Easy access

I’m a firm believer in allowing employees easy access to their benefits information, all the time. I suggested earlier that when you initially communicate a benefit, it may not be of interest to all of your employees, or the right time for everyone to take action. By making benefits information easily available, your employees can access this information when it’s relevant to them. And, if you have everything held in one place, on an online benefits portal for example, you can regularly drive your employees here.

Communication is the cornerstone of an engaged workforce in the charity sector. Integrating these best practices will help your charity connect better with the people who work for you and create a more engaged workforce that contributes to successful outcomes.

Secondsight’s Ian Bird – a good benefits package is a great way to demonstrate to your charity’s staff that you care about them, their families and their welfare.
"Being able to show that you understand the market is important and you need to make sure you include information about any stakeholders involved…"
Deloitte advert

Recruiting, managing and retaining trustees

Intense competition, commissioning practices, questions around fundraising methods, and the high profile governance issues of recent years are great examples of the challenges many charities continue to wrestle with.

Competent and knowledgeable trustees are therefore more essential to a charity’s health than ever before. Indeed, regardless of size and profile, all charities rely on trustees to have overall control of essential management functions, ranging from fundraising to recruitment.

However, the growing competition (there are nearly 167,000 charities registered in England and Wales alone), has led to increasingly difficult retention and recruitment issues for charities trying to appoint the most effective trustees.

Responsibilities of a charity trustee

Whether referred to as board members, directors or management committee members, the responsibilities of charity trustees are consistent and significant. It is therefore imperative a charity’s trustees are fully aware of their role and the responsibilities they have undertaken.

Ultimately, trustees must ensure their charity is operating responsibly and fulfilling the function for which it was established. This sounds straightforward enough; however, it requires a broad understanding of all the organisation’s activities, with a continual focus on ensuring the charity is working for the public benefit. Trustees should understand the charity’s purpose, and communicate what it wants to achieve and how its activities are supporting this aim and benefitting the public.

While formal qualifications are not required, and in many cases such qualifications do not necessarily deliver greater charitable outcomes, an understanding of charity law is essential. This extends to an awareness of the additional laws relevant to the fundamental aims of the charity, and internal governance documents. New appointees should always undergo appropriate training to ensure they are up to speed in this continually evolving field.

Trustee responsibilities also extend to managing resources responsibly, and ensuring the charity is accountable. This requires financial prudence and not exposing the charity to unnecessary risk through investments, borrowing or any other inappropriate resource allocation. It is also continually worth bearing in mind that it is trustees who need to demonstrate compliance to relevant regulators.

Overall however, the most high profile responsibility bestowed on trustees is to always act with reasonable care and skill and, crucially, in the charity’s best interests. Recent media coverage has highlighted that poor recruitment of trustees hasn’t always led to this being the case. Trustees need to devote the necessary amount of time to their roles (including, but not limited, to attending trustee meetings), and using skills appropriately and taking advice where necessary.

Recruiting the best charity trustees

To ensure these responsibilities are fulfilled effectively, charities first need to recruit effective and enthusiastic trustees. While there is intense competition for the best, there are several ways a charity can maximise their chances of success.

Firstly, develop a recruitment policy and establish a recruitment panel. Recruiting effectively requires good planning and a policy can ensure consistency and save time. A common mistake when appointing trustees is failing to devote the necessary time and resources to getting it right. Equally there can be the temptation to opt for a well-known name or recognisable public figure over someone who may be less well-known but better on paper.

As with any senior appointment, establishing a dedicated recruitment taskforce, backed up by a standardised policy, can make sure the appointment is the right one.

Before looking to appoint, always undertake the necessary groundwork to determine what skills your charity needs. Regular skills audits can maintain a strong mix of trustees and help charities understand what competencies, knowledge and experience are required from candidates. Similarly, it is essential that job roles and descriptions are clearly defined. All trustees need to be pulling in the same direction.

Thinking about where the role is advertised can make a significant difference to the overall calibre of applicants. Whether through social media or volunteer events, effective recruiting requires the best candidates to hear about the role. There are a number of portals identified by the Small Charities Coalition which will be an effective starting point for advertising positions.

Particularly as it’s often not the most difficult subject to broach, it is essential to consider conflicts of interest before finalising a trustee’s appointment. Any business interests which conflict, or even appear to conflict, with the work of the charity can call into question the impartiality of your trustees – leading to further questions about governance more broadly. At this stage of recruitment, work to identify, record, and prevent any potential clashes.

This vetting process becomes even more important when considering well-known appointees. Conflicts of interest or potentially damaging revelations for a charity can extend to previously unnoticed social media posts or past interactions with the public that these potential trustees may have had.

Keeping hold of the best trustees

Once an ideal candidate has been found, it is important to invest the time and effort necessary to retain them. A strong board requires consistency and continued development, which stem from the retention of board members.

Reviewing the board on a regular basis is key. As well as making sure any skill gaps are identified and filled, reviewing the board makes sure trustees stay motivated and continue to develop and perform.

Provide ongoing training where necessary. This does not have to break the bank. There are a number of organisations providing free or low cost training to charity trustees. The Small Charities Coalition provides useful advice about the various organisations able to provide trustee training.

Encourage trustee participation in local forums and networks. Networking with fellow trustees at events like Trustees’ Week can be a great way of developing and sharing skills.

Regular performance appraisals for trustees ensure the board continues to develop and can make trustees feel valued for the work they put in.

With these measures implemented, charities can feel safe in the knowledge that they have the best and most effective trustees in place.

Zurich Municipal’s Gordon Wilmott – before looking to appoint, always undertake the necessary groundwork to determine what skills your charity needs.
"One of the challenges or pre-hospital emergency medicine…is that normally there is no formal mechanism for maintaining a dialogue with patients and relatives."
RAF advert

Linking improved governance to innovation

Air Ambulance Kent Surrey Sussex (AAKSS) is a helicopter emergency medical service which operates out of Redhill, Surrey and Rochester, Kent. We serve a population of 4.7m people plus those who travel through the area. Our crews of pilots/co-pilots operate three helicopters and fly 2,500 missions a year with on-board medical assistance provided by doctors and paramedics. Of the more than £11m needed to sustain the service each year, 92% is raised by public donation and fundraising with the remaining 8% provided by the NHS.

As an independent charity delivering pre-hospital emergency medicine, AAKSS is accountable to five principal regulators including the Charity Commission, Care Quality Commission and, perhaps less predictably, the Gambling Commission. A successful lottery accounts for over 50% of our income and a CQC inspection conducted last year provides a glowing account of outstanding patient care.

A governance review could appear – and perhaps has appeared - as an attempt to fix what isn’t broken given that we are considered a leader in our field and have benefited from a relatively secure financial position. However, for the current board of trustees, the imperative to diversify our income streams and standardise safeguarding across the charity has become increasingly urgent, not only from the perspective of risk but also of values.

Caring is one of our core values and a considered approach to what this means in the context of pre-hospital emergency medicine raises some important ethical and organisational implications.

Potential income

Our staff care deeply about patient outcomes. However, the clinical involvement of doctors and paramedics with the patient is an intense and relatively brief one and often they will never know what happened following handover at the receiving hospital. It is clear that a significant number of patients want to express gratitude to the people and organisation that, in their view, saved their lives. This gratitude represents considerable potential income.

Strong evidence from the United States suggests that, when appropriately stewarded, this expression is beneficial to both the patient and to those who provide care. Sadly, not all patients survive and bereaved relatives care that all that could have been done was done, and some feel the need to meet those present in their deceased relative’s final moments.

One of the challenges of pre-hospital emergency medicine delivered by a charity such as AAKSS is that normally there is no formal mechanism for maintaining a dialogue with patients and relatives. A relatively small proportion find their way back to us and the “base visits” which feature prominently on our website tell moving stories of patient and crew reunions. In light of the evidence of the emotional benefits of maintaining this connection, our digital strategy including our website design, will optimise opportunities for former patients and relatives to get in touch.

A newly created patient liaison role is intended to provide specialist expertise to manage these important relationships. It takes into consideration both the nature of care in this context and the nature of risk, and reinforces the need for specialist skills and for a holistic approach. This extends to the safeguarding and care for our own staff in relating to people who have experienced major trauma, including life changing injuries, and bereavement.

Emotional reunions

Reunions with former patients or relatives can be emotional for the crews and, given that they take place at an airfield where the helicopters are based rather than in a hospital, appropriate boundaries and safeguards need to be in place. As one highly experienced paramedic pointed out, the reunion can close a loop for them too and reunite them with people they feared would not survive.

The patients themselves may be unconscious but the crew members are acutely aware of what have often been harrowing events. They need to make judgments about how much they should share and how involved they want to be in a visit, if at all.

In a culture of continuous improvement in which our teams take enormous pride in delivering outstanding patient care, the creation of the patient liaison role represents an incremental step in further developing the nature of care provided. In this we have taken notice of the approach of our peers, notably the London Air Ambulance, in not limiting the caring relationship to the pre hospital period but to think much more holistically about what it means.

This could include signposting former patients to other services or establishing peer relationships with others who have experienced major trauma.

Of primary concern in all of this is our commitment to ensuring the physical and emotional safety of people who have been through a major trauma and may have suffered life changing injuries or bereavement. Given that our crews are treating the most sick and seriously injured people, patients themselves often have no recollection of events but may feel a need to know what happened.

Meaningful way

Significantly, the patient liaison role needs to respect their desire to give back to the charity in a meaningful way and to ensure a sense of belonging, assuming that it is part of our duty of care to do so. Many people are unaware that air ambulance services are delivered by charities and a very common response is a strongly felt desire to raise money, both by donating directly but also by using networks to achieve greater effect.

Over the years many of our volunteers have come forward because they have been touched personally by the charity and are given roles within our offices, helping with the administration of our fundraising or going out into the community to give talks.

However, the increased scrutiny of fundraising practices within the charity sector with safeguarding as its dominant theme has necessitated a hard look at freedoms that, in the past, have been taken for granted.

Our safeguarding review of fundraising has resulted in much tighter recruitment processes for volunteers including consideration of DBS checks and placing restrictions on public facing roles which may include entering schools. It has also prompted consideration of how we create meaningful engagement for former patients and relatives who may not necessarily fit existing volunteer role profiles.

Two important additions to our board of trustees are providing further enlightenment for our considerations of the relationship of care. In an open recruitment process, one of them began his application with the words “this charity saved my life”. Once recovered he insisted on paying for the cost of the mission that saved him and took the opportunity to join the board as soon as it became available.

Patient advocacy

The other new trustee is a very senior clinician who has been a leader in the Surviving Sepsis campaign and has first hand knowledge of the power of patient advocacy following trauma, as well as a strong commitment to ensuring emotional safety in acute medical situations.

These improvements to our governance and consequent organisational changes have required balance and real thought about what it means to be caring. Recognition of the need of former patients and relatives to express gratitude takes into account the concern of staff not to appear to be “ambulance chasing” or to take advantage of people at a time of vulnerability.

Care for their emotional safety needs to be balanced against the welfare and emotions of our staff, including of course the clinical and operational crews. Current anxieties about safeguarding in the charity sector need to be balanced against the good will and trust that former patients and relatives feel for our charity and that we wish to honour in return. It is not always an easy balance to achieve but our governance review has produced new opportunities for meaningful engagement and for philanthropy.

Air Ambulance Kent Surrey Sussex’s Helen Bowcock – improvements to the charity’s governance and consequent organisational changes have required balance and real thought about what it means to be caring.
The interface between AAKSS’s pre-hospital medical team and the patient now goes beyond the initial emergency response – requiring a newly created patient liaison role to provide specialist expertise to manage the further contact.
"One of the challenges or pre-hospital emergency medicine…is that normally there is no formal mechanism for maintaining a dialogue with patients and relatives."
Deloitte advert

Why charities need to further embrace digitisation

Digitisation has transformed many charities over the past decade, changing how they approach fundraising, communication, marketing and engagement with their volunteers, supporters and donors. Charities of all sizes and sectors have utilised digital technology to varying degrees, but despite this there is a curious imbalance in the areas in which most charities are using digital tools.

Fundraising in particular has shown enormous advances in the use of technology, yet other areas remain resolutely locked in an analogue era, unable or unwilling to update their practices according to market forces. This is usually to be found in a charity’s internal operations, how it organises its volunteers, conducts meetings and compiles governance reports to name just three areas. What is behind this discrepancy, and how should charities approach a more thorough use of digital tools?

A digital revolution

If one looks at how many charities conduct their fundraising now compared to only 10 years ago, it is considerably different. With no need for a physical signature now, monthly donors can be recruited via telephone and digital marketing, while over the past few years there has been a sharp upturn in the use of SMS donations.

In fact, mobile is arguably the greatest advance in how charities use technology. The ubiquity of smartphones and the ability of charities to reach their audience almost immediately, combined with the ease of contactless payments for donations, mean the potential for charities within mobile is huge. When you also consider the rise of online fundraising platforms such as JustGiving, it is clear just how much technology has changed the nature of fundraising.

Social media has also played a big part in this. In 2014, Social Misfits Media conducted research with charities and social enterprises that revealed 94% of them had a Facebook page. Three years on, this is surely now even closer to 100% as charities note the impact a social media presence can have for them. The advent of Facebook campaigns is also important, with many charities using targeted adverts asking for donations.

A recent report published by the House of Lords Select Committee on Charities outlined the role digital technology can play in the future success of charities. Stronger charities for a stronger society devotes a chapter to the use of digital technology, stating that the integration of such technologies into people’s lives has significantly changed the environment charities operate within. In the areas of a charity outlined above, there truly has been a digital revolution.

Analogue internal processes

However, despite this digital development, if you look behind the curtains at the day to day running and operations of many charities – especially the small to medium sized ones – there is a more analogue approach to much of what goes on. This was highlighted by the Lloyds Bank UK Business Digital Index, which in 2016 found that 49% of charities were digitally immature and had no digital skills whatsoever, no confidence and no awareness. This compared to 38% of small businesses.

The main areas of concern are to be found in some of the mechanics of operations. A good example is meetings. A charity’s board must meet regularly throughout the year – it’s an essential yet time consuming element of the role. But digitisation is yet to trouble the meeting process in many charities, where meetings still follow pretty much the same process they have always done.

Meetings can take too long, they frequently lack focus, attendees don’t always have the required information with them, no one can remember the action points from the previous meeting…the list of faults could go on and on.

Research was conducted in 2016 that revealed on average, office workers spend around nine hours each week preparing for and attending meetings. This is an unnecessary drain on the time of administrators and senior management alike within any charity and is something that could be easily addressed by digitisation.

Getting started with digitisation

It’s unrealistic, however, for many charities to embark on a comprehensive digital transformation journey. This is both time consuming and costly, and a lot of charities lack the confidence and wherewithal to even consider such a task. Smaller charities especially face a difficult choice, wanting to innovate and approach tasks in a smarter and more efficient way, but struggling to find the resources to do so.

Risk aversion is also a factor. There is an element of people sticking to the tried and tested within charities, and burying their head in the sand when it comes to new approaches. That’s why involving younger staff members can be productive, or ensuring that your charity has at least one digitally savvy trustee on the board, who can help bring others up to speed.

The average age of many board members means that generally, they are less confident with technology than younger colleagues. So including a "digital trustee" with more understanding of technology can help bring others into the digital age. It can also be productive to look to your peers and see how they are deploying digital technology

But what’s of the upmost importance is to try and approach digitisation on a gradual basis. Doing too much, too soon will put people off and could stop a digital project in its tracks before it has had much of a chance to progress. Identify one particular area of inefficiency within the charity that would really benefit the most from a digital approach, and begin there.

21st century meetings

Returning to the previous example of meetings, this is an area primed for digitisation. No one needs reams of paper, so any meeting materials should all be accessible via an employee’s tablet or smartphone, so people can read through in advance more easily, rather than carrying sheets of paper everywhere with them. Almost everyone uses such a device and it is a straightforward process to add an application that will facilitate such an approach.

Printing out agendas and meeting materials is not only costly, but it takes valuable time for support staff to prepare and print everything, especially for a meeting with lots of attendees. There is also a sustainability issue at play here too – why waste paper when there is no real need to do so?

The 2016 research also showed that around half of UK office workers said they often find their mind wandering onto other topics when in meetings, which makes it clear that meetings need to be more focused. Keeping the agenda on a white board can help, as can online meeting tools that allow the meeting chair to control what attendees see, keeping the focus on what is being discussed at that moment.

Online meeting tools allow attendees to collaborate and annotate documents during the meeting itself - a really valuable function particularly for a charity board meeting, which has so many papers. Furthermore, actions can be easily agreed and captured so you don’t have to rely on an attendee’s faulty memory to refer to what was discussed. This means users can be more transparent in all elements of meeting administration and remain on top of any governance requirements.

Searchable audit trail

Crucially, using digital tools for meetings leaves an easily searchable audit trail. This means there is no brushing under the carpet anymore, so charities and their boards simply have to be accountable and it makes good governance a far simpler process.

But this is just one example of where charities have lagged behind in their use of digital tools – there are many others which could be just as impactful should a charity embrace a digital approach to that part of operations. Of course, the charity sector varies considerably in its use of digital tools, but in a sector where the pressure to do more with less is perhaps greater than in any other, charities and the causes they are seeking to help can only benefit from increased digitisation.

The impact of digitisation has already been seen in fundraising, and it is high time that similar benefits were enjoyed in other areas of a charity.

eShare's Alister Esam - despite digital development, if you look behind the curtains at the day to day running and operations of many charities there is a more analogue approach to much of what goes on.
" is arguably the greatest advance in how charities use technology."
"...on average, office workers spend around nine hours each week preparing for and attending meetings."
Samten Advert

Being able to achieve successful hiring

Every charity has the same priorities when making new hires – ensuring productivity, an optimal service and shared team values by finding, securing and retaining the best people. And while a positive reputation is critical to every organisation, it is perhaps more important to the charity sector than any other, given a reliance on public funding and dealings with vulnerable individuals.

In a sector that employs more than a million people, hiring success is arguably also more important for charities, in light of the often sensitive nature of the challenges being tackled. Finding the right people is not just vital for growth but also to ensure that all work is of a consistently high standard.

While there’s no guaranteed route to hiring success, there are steps you can take to ensure your charity is as well-placed as possible. Here are just a few:

STRENGTHEN YOUR NETWORK. Most people have a contact list overflowing with people who offer a varying degree of professional support and advice. While there’s value in having fingers in many pies, there’s also a lot to be said for a focused group of likeminded contacts, who face the same challenges and are looking for similar solutions and opportunities. This is particularly true in the charity sector, where recruitment challenges are sometimes heightened due to smaller budgets.

Greater good

The sector is also unique in that every charity is in some way fighting for the greater good. So, although competition for a small talent pool is high, still ensuring the right person is in the right role is ultimately the mutual goal. Having contacts within the industry who can share details of potential hires is beneficial in supporting this shared objective.

CENTRALISE YOUR RECRUITMENT PROCESS. The charity sector is certainly not the only one guilty of operating a decentralised recruitment service, but this can definitely add to the already challenging process. Having staff from various teams or departments handling recruitment processes - including those who would otherwise be focused on other critical tasks, such as developing watertight employment contracts or overseeing staff delivery of care - should be a major cause of concern.

A decentralised team can also, more generally, have a detrimental impact on the efficiency of your overall recruitment process, as multiple members of the same team pay to advertise for similar roles, and end up screening the same people, wasting both time and money.

PUT SECURITY FIRST. The Charity Commission estimates that only 23% of charities carry out checks on prospective trustees. Your first priority when building a recruitment process should be the security it offers you in the decisions you make. Do you really know your candidates and - in particular - are their referees genuine and reliable? Could you provide evidence of due diligence should it be requested by auditors or regulators at a later date?

Referees sometimes lie

Recent research of the UK recruitment sector showed that 21% of those applying for roles have actively encouraged referees to lie on their behalf. A bad hire can not only be reputationally damaging, but also put the people or communities you are trying to help at risk. Given the very human nature of the service often offered by a charity, you can only ever be as good and reputable as the people you hire.

INVESTING IN YOUR CURRENT STAFF. While it’s a key requirement for every HR team, it’s particularly important for charities to plan for the future and establish a pipeline of potential talent. But that’s not to say you should always just be on the lookout for new hires. With all the work that goes into getting new recruits on board, many charities fail to dedicate the right amount of time to also ensuring they retain existing talent.

Real risk

The consequence of this is the very real risk that your best staff are lost to a competitor, because your HR efforts were spent looking for the next best thing. It’s just as important to continually invest in your existing staff’s development and enhance their skillset, adding to the growth potential of your charity.

DON'T BE AFRAID TO DO THINGS DIFFERENTLY. Just because something’s always been done a certain way, that doesn’t mean it’s right or the most effective approach. Often this is the problem HR teams face as they continue to stick to the status quo. Old, traditional methods must make way for new, more efficient ways of doing things. Whether that means adopting new technologies, or simply a new way of looking at a problem, all HR departments will reap the rewards of a recruitment process and practice audit.

Ultimately, every charity is different. While there are commonalities that one can draw on, really understanding your own organisation along with the wider sector and talent pool is critical to identifying, attracting and retaining the best people.

THE FUTURE LIES IN TECH. What is consistent for the entire charity sector is the need for efficiency, validity and accuracy. Exploring the use of tech based, secure solutions to overcome the risks and downfalls of tired, old business processes will ensure charities not only survive but thrive into the future. As the world of tech continues to evolve at a formidable rate, it delivers huge opportunity for the charity sector to enhance its recruitment processes and make valuable savings.

Technology solutions

Luckily for those working in the field of recruitment, a wealth of technology solutions have emerged, all designed to make their roles more efficient and effective. In fact, most, if not all, bases are covered when it comes to technology supporting each step in the recruitment process. Thus it is possible, for example, to make the usually drawn out and admin-heavy process of reference checking wonderfully simple. An automated, online solution can deliver data-driven candidate insights and remove the need for an often frustrating and time consuming follow up process.

Add into the available mix the means to "rate" the positive, negative and neutral sentiment of feedback from referees - which can deliver accuracy, higher than that typically achieved by humans when checking references - and you have both unparalleled efficiency and accuracy.

Software can facilitate automated video interviewing, whereby the interviewer sets the questions in advance and the candidate reads and records their answers in an online interview environment that replicates and replaces the need for a Skype interview. Technology such as this unlocks substantial time and cost efficiencies for charities with high volume recruitment requirements.

Another piece in the jigsaw puzzle is staff selection software that uses algorithms to pinpoint applicants with the right skills, attitudes and general fit for your organisation. This type of tool enables quick, easy and automated filtering of applications, leaving you and your team more time to focus on parts of the process where human interaction and emotional intelligence are necessarily paramount.

General technology

In addition to specialist HR technology, it’s important for recruiters to understand how they can tap into more general technology solutions, such as Google Drive, which allows them to share, edit, save and manage documents in real time and across different geographies if necessary.

Equally, embracing social media profiles such as LinkedIn and Facebook as a way of streamlining the application process not only makes it quicker for applicants to apply but also adds efficiencies at the recruiter’s end, enabling them to access and extrapolate data more efficiently.

Finally, as global mobile usage increases exponentially and mobile tech continues to advance, optimising the mobile application experience is a must. Whether that be the creation of native apps, tapping into mobile functionality available via software, or merely optimising websites and CV uploading for mobile, staying on top of the curve will not only improve your internal efficiencies but also your chances of getting access to the top candidates for your charity.

Xref's David Haines - having staff from various teams or departments in a charity handling recruitment processes should be a major cause of concern.
"With all the work that goes into getting new recruits on board, many charities fail to dedicate the right amount of time to also ensuring they retain existing talent."
"While there are commonalities that one can draw on, really understanding your own organisation along with the wider sector and talent pool is critical to identifying, attracting and retaining the best people."
Deloitte advert

The skills challenges of the digital revolution

The digital revolution has transformed the lives of people and organisations around the world. The incorporation of technology into business models has enabled organisations to move from purely analogue space, to being able to connect and engage with stakeholders in ways previous generations could never have imagined.

Unsurprisingly there are different approaches to the digital revolution – it can be an opportunity to develop talent and equip employees with vital skills which will deliver value in the long term – an approach that many organisations are already investing billions in, to ensure their workforce is equipped to overcome any challenges.

The charity sector has not been immune to this revolution, and many charities have embraced the opportunity to change the way they interact with their stakeholders and donors, but many charities are still missing out on some of the key benefits of this digital sea-change.

The Charity Digital Skills Report by Skills Platform revealed that despite embracing digital, half of charities still don’t have a dedicated digital strategy. This is at a time when most charities believe that digital processes will change the industry beyond recognition, An idea that is reflected by the Government, which has also recognised the importance of digital skills, having launched its own "digital strategy" earlier this year.

This ad hoc approach to digital comes with a series of challenges including the protection of sensitive information, skills shortages and an understanding of how best to implement digital within organisations.

Overcoming barriers to digital

With over half (57%) of charities stating that a skills shortage is the biggest barrier to getting more out of digital, the need to invest in skills is clear. Despite the investment in training employees and equipping them with digital skills, there is still a clear shortage of resources, skills and understanding of the latest developments.

The report also revealed that many charities are struggling to integrate digital skills into their operations, and suggests that this could seriously threaten the future of the sector. The report also revealed that a lack of skills is a barrier to charities engaging in more digital endeavours – something the report’s authors pointed out as a terrible irony, and one that needs to be addressed to get the most out of the digital sphere.

Charities are also threatened by a lack of funding to their operation. More than two thirds (67%) of charities cite a lack of resources as a threat, and a further 53% state that their IT infrastructure needs to be improved. For one, the failure to engage digitally also means that two thirds (66%) of charities are worried that they will miss out on opportunities for digital fundraising.

Moreover, without appropriate digital skills in data management, processes and protection, charities will be left vulnerable to cyber-attacks and reputational damage. This is viewed as a barrier by almost half (45%) of charities, and it is this concern that that needs to be considered when looking at the digital revolution and the challenges small charities face.

Charities can effectively prepare for the challenges that digital poses to the sector by taking the time to build up a thorough understanding of the charity's strengths and weaknesses, adopting a strategic approach and preparing for potential risks. Measures to address the digital skills gap have been taken by charities themselves and by the Government through its Digital Strategy, where it has pledged to invest in digital skills training, including within the charitable sector.

It will take time for these measures to cut through, however, and in the short term the lack of digital skills within the sector means charities may be more prone to accidental data breaches, or vulnerable to more deliberate cyber attacks. Unfortunately, both types of incident do happen. Data might get lost or stolen, and hackers might compromise security systems. As we have seen recently across other sectors these incidents can strike at any time.

Best practice from other sectors

Despite these challenges, there are some straightforward steps charities can take to maximise potential benefits from the digital revolution, whilst simultaneously managing the associated risks.

Working together with other organisations both in the public and private sector, and learning from best practice is an excellent way to understand how other organisations are setting new digital standards in their own sector by adopting digital techniques to drive their innovation.

Studying these examples also provides charities with the opportunity to understand what works, and what doesn’t, and apply it to challenges specific to their sector. An example mentioned within the Charity Digital Skills Report noted the power of online fundraising platforms as both an awareness tool and medium to raise funds for causes.

An obvious benefit from the digital revolution are new ways of promoting charity campaigns. Previously a great campaign would have likely relied on a media partner to help build awareness. Now, the developments in social media and the growth of crowd funding platforms have made it easier to both reach out to donors and for them to donate. Indeed, the data analytics behind JustGiving or GoFundMe allow charities valuable understanding of a donor's route to specific pages, for example.

Managing digital risk

It is prudent for charities to have a crisis plan in place should something go wrong in their digital operations. This should comprise of a set of response guidelines that are clearly understood and freely available to all staff.

Whilst cyber insurance is not a replacement for robust IT security, data protection and a response plan, it can act as a safety net. A comprehensive cyber insurance policy for a charity acts as a first response and protects it from the moment a cyber or data breach occurs. Such an insurance policy would cover overall liability as well as legal, IT security and regulatory costs that may occur to contain a breach before a claim arises.

The digital revolution clearly offers charities the opportunity to embrace and evolve as organisations. It also allows access to tools that can strengthen charities and enable them to reach out to audiences and stakeholders they may previously have not been engaged with. It also comes with risks – but being aware of these risks, being ready to learn best practice from other sectors, and equipping staff with the latest training and tools are vital steps for charities to consider as this revolution gathers pace.

Zurich Municipal's Gordon Wilmott - with over half of charities stating that a skills shortage is the biggest barrier to getting more out of digital, the need to invest in skills is clear.
"An obvious benefit from the digital revolution are the new ways of promoting charity campaigns."
Samten Advert

Avoiding media attention by having better governance

A story about an underperforming charity is nectar to a journalist; it usually has everything needed to promote the newspaper. A touch of righteous indignation about the expenditure of public money and errors of the charity goes a long way to obscuring many of the real issues faced by a charity leading to both loud headlines and adverse social media trending.

A trawl for positive charity stories reveals such items as:

  • Charity rankings in the annual Stonewall list of the best LGBT+ employers.
  • Inclusion in the best UK charities to work for in The Times annual list.
  • Centrepoint’s helpline for the young homeless.

However, the negative stories outweigh the positive in column inches.

A common factor in all media stories is that they can often be tracked back to management or governance issues. Taking a rather sweeping look, the main negative stories of the last three years are the fundraising scandal, charity data protection financial penalties and the failure of Kids Company. All have at their roots massive management and governance failures.

Notwithstanding the media, the vast majority of charities trundle along without making national headlines, achieving their objects and making a considerable difference in their communities. Is this because they are lucky or because they have established an effective management regime?

Ultimate responsibility

Whilst effective charity management is usually a matter for the chief executive, ultimate responsibility for the charity resides with the trustees. It is the duty of the trustees to ensure effective governance, and one strand of this is effective management.

Being a charity trustee is not easy. As charities get larger, reduced trustee involvement in delivery and an increased number of staff means a balance must be achieved between trustee duties such as ensuring effective governance and not overstepping their bounds and getting involved in day to day operations delegated to the management team.

Setting controls can be complex and whilst most trustees are excellent at delegating financial controls and ensuring that there are limits on financial decisions which can be delegated, this is not the sole area where controls should be set. Where trustees have not been as effective is the delegation of the approval of risk across the organisation. Risks have to be actively managed and many charities have not properly undertaken this task.

Following the tragic death of Olive Cooke, a fundraiser of many years’ experience, it became clear that many charities had entered into a wide variety of arrangements, including data sales and contracts with professional fundraisers, where risk was not effectively managed. The risks which had been ignored were wide ranging including items such as a lack of contractual supervision, a failure to obtain legal commitments to comply with codes of practice, poor control of personal data and reputational vulnerability.

In the aftermath it became clear that trustees had delegated the power to sign contracts with considerable risks to operational managers within the charity without properly managing those risks. This was not only a wake-up call for trustees at many charities, but resulted in a change in governance throughout the sector.

The main lesson that was learned throughout this process was that delegation is acceptable, but only when this is accompanied by follow-up, examination and audit. Trustees in many charities have now changed procedures to ensure that they are much more involved in setting policy at all levels of the organisation and also building reporting, review and audit elements into their procedures. However, this only goes so far and really to achieve effective management, trustees also need to ensure they do take action when this is required.

Implementing good governance

Trustees have ultimate responsibility for all activities of a charity, and good governance is not only setting policies and parameters, it is making sure that these are properly followed. A trustee’s role is not simply to attend meetings, but amongst other activities, to set strategy, ensure the correct governance structure is in place and to make sure that this is being carried out effectively.

A trustee's role is not an easy one, as they must balance their control with not interfering unduly in the day to day operations of a charity. They are there to oversee and to protect the assets and reputation of the charity and set the overarching aims, whilst not to get too involved in the minutiae of running the charity.

A trustee's role gets harder when the trustees are elected by the membership as often competing pressures make achieving balance harder. This can also be compounded by not achieving a skills balance on the board and a lack of governance experience. This can result in disputes between the board and the CEO. Often these can be managed appropriately by professional advice and resolution achieved. However, this is not always possible and the issues can become public, the most recent example being the breakdown between the CEO and board at the RSPCA.

The Charity Commission

The overriding issue within a charity is that the trustees, who may not be following good practice, are responsible for ensuring good practice and making the changes necessary to bring the charity back in line. The Charity Commission is not permitted to make decisions in place of the trustees. Therefore, whilst the Commission can advise, it can only take action when the issues become serious and its advice has been ignored. Only if the charity is not capable of running its own affairs can the Commission remove trustees or appoint a charity manager to run the charity.

Where a trustee has been removed, the Commission may ban that individual from being a trustee of any charity in the future, permanently or for a specific period. Where a charity manager has been appointed their role will be to bring the charity back into line before appointing a new board to continue operations or to wind up the charity, transferring its activities to another charity.

Help for trustees

Good governance in charities is important for the overall health of the sector. A number of bodies are in place to achieve this aim. Assistance for charity chairmen is available through the Association of Chairs and assistance for Chief Executives is available through ACEVO. Both of these organisations have been working on a Charity Governance Code which has recently been published by the Good Governance Steering Group.

The code describes itself as not being a legal or regulatory requirement. It draws upon, but is fundamentally different from, the Commission’s guidance. It sets the principles and recommended practice for good governance and is deliberately aspirational. It was created with the assistance of over 200 charities and the Commission was an observer at meetings of the group that developed the code.

By far the majority of charities are run well. The fact that they have not attracted unwelcome media attention, is due to the commitment of trustees and not luck. Using the resources which are available to charities along with appropriate legal and governance advisers, charities and trustees will continue to go from strength to strength. The most important thing is not to leave governance and management on the back-burner, always review, challenge yourselves and your teams to be the best version of the charity that it is possible to be.

We have one of the most vibrant and ethical charity sectors in the world and should continue to develop these skills into new and innovative management structures.

McCarthy Denning's Benjamin James - it is the duty of the trustees to ensure effective governance, and one strand of this is effective management.
"A trustee's role is not an easy one, as they must balance their control with not interfering unduly in the day to day operations of a charity."
Deloitte advert

Safeguard your charity from fraud

The long term ramifications of being a victim of fraud can be devastating for charities – especially as a damaged reputation can discourage donors from making future contributions. Therefore it’s paramount for trustees to make themselves aware of the evolving risks - what the latest scams are and the preventive solutions now available, so that the opportunity for fraud is managed and minimised at every level.

Charities of all shapes and sizes face increasingly sophisticated, targeted, fraud that can be categorised into two types - internal and external. External fraud involves an outside body attempting to extract money from a charity. For example, this could include issuing and receiving payment from a false invoice, unauthorised fundraising under the charity’s name and phishing emails.

Internal fraud examples

Internal fraud is committed by a connected party – it could be an employee in a senior position within the charity, or any person who has access to the financial systems or assets. Scenario examples could include a CEO or finance director siphoning away or running off with significant funds, the capture of donations by an employee, wrongful access to finance systems and distribution of funds, or staff claiming false expenses.

However, there should be a clear distinction between fraud and poor internal controls that may give the appearance of fraud - but actually turn out to be either a compliance issue or a procedural policy not being followed.

All charities are expected to have finance policies in place to minimise the risk of fraud and ensure that relevant controls are implemented to stop it from occurring. However, typically these controls are only tested retrospectively, so the potential for fraud is still high. Proactively countering the scope for fraud is a much more effective option than retrospective testing.

The responsibility of trustees

Ultimately it’s the responsibility and legal obligation of the charity trustees to safeguard their charity’s finances and drive any system or process changes to counter the dangers of fraud. The trustees need to have absolute confidence that internal and external fraud is guarded against and therefore ensure that accountability measures are introduced at every management level.

Increasingly, more charities and their trustees are turning to sophisticated, multi-featured, finance systems to help them fulfil organisation-wide requirements. These systems can help you put in place and enforce highly effective measures and financial controls to deter fraudsters.

To ensure the robustness of a charity’s financial controls, finance systems should enforce three key areas: staff access being limited to their authorised duties, segregation of duties and control over any changes to master records. If an employee has access to all aspects of a charity’s financial data, the potential for fraud is greatly increased. Controlling access security to particular processes or modules within your finance system helps align system needs with the prescribed tasks across the job roles throughout your finance team.

Implementing a segregation of duties control ensures that one finance team member can’t complete all stages of a particular process - whether it’s a payment or receipt, so at least two team members become responsible for this action.

Examples include: staff entering purchase orders cannot enter purchase invoices or authorise purchase ledger payments, and staff who raise sales invoices do not record or collect the money received. Another could be that all cheques above a certain amount should require at least the signature of the chairman of trustees and such expenditure should be reported at trustees' meetings.

Workflow management system

To achieve this, you must choose a financial management system with a workflow management engine to restrict staff completing the combination of actions required to make a payment or transaction. A workflow management engine allows bespoke business processes to be modelled.

With higher level finance systems, workflows can be initiated from a number of different places within your finance system, on an event trigger, an accounting rule or an action. Therefore approval scenarios can be created and predetermined actions performed, to make your financial processes secure - with a full audit trail.

For example, if a bank transfer is made over a prearranged limit, email alerts and approval requests are sent to the designated recipients - so staff cannot bypass the organisational chain of approval.

A workflow engine also protects charities’ master records. Using a comprehensive financial management solution, charities can limit the number of users who can access and edit master records – eliminating any unauthorised access. On top of this, many charities will design a system workflow to ensure that all changes are verified by at least one administrator.

A good finance system will also provide secure password encryption and regular forced password changing as a standard, reducing any unauthorised access to the system – internally and externally.

Monitor and detect

Proactively analysing financial data and identifying anomalies holds huge importance when it comes to detecting fraud. Active monitoring helps deter fraudsters while at the same time charities gain better control of their finances.

With a modern, integrated finance system, charities can gain real-time insight on financial information through one source, enabling senior staff members to dig deeper into data to prevent and detect fraud.

Budget checking is made a lot easier and efficient too. Budget holders can self-serve and obtain specific reports, receive email alerts regarding budget notifications - enabling them to discover anomalies far quicker than the norm. Thus swift, preventative action can be taken.

Key actions checklist

Here is a checklist to make your charity safer:

  • Implement access security – ensure that staff members can only access areas of the system that they need. Don't have a blanket "one size fits all" approach.
  • Implement system authorisation or multi-staff process for changes to master records, e.g. supplier/staff bank details.
  • Verification processes must be adhered to when changes are made to master records, e.g. independently contact supplier/staff, and request written confirmation for changes.
  • Segregate duties – staff members must be restricted so that they are unable to complete all stages of a particular finance process. If this is not possible due to staffing structures, data sourcing authorisation and review is vital.
  • Regularly review processes for potential loopholes and have random spot checking of audit trails to ensure compliance.
  • Reassure staff that these controls are in place to protect them and the charity rather than reflecting any doubt of their integrity.

PS Financials' Mat Smith - sophisticated, multi-featured finance systems can help charities put in place and enforce highly effective measures and financial controls to deter fraudsters.
"Implementing a segregation of duties control ensures that one finance team member can't complete all sections of a particular process..."
"A good finance system will...provide secure password encryption and regular forced password changing as a standard..."
Deloitte advert

Giving priority to charity employees' mental health

Recently, I have visited a number of organisations to discuss their healthcare insurances and when I’ve raised the topical issue of mental health, the response has been along the lines of “We’re all mad here!” It always draws a smile but there is a serious side to employee wellbeing and the stresses of work and home life. Unfortunately, it is a subject that many employers chose to ignore or do not fully understand.

This is very unfortunate, particularly in the charity sector. So many people in the sector, especially those in the frontline of provision of care, advice and treatment of people with demanding situations, face stress and other mental health pressures themselves in an environment of increased workloads, diminishing adequacy of resources and adverse pressures on morale.

In many charities where there are field workers there exist trends of having these workers operate more on their own, with a reduction in personal physical contact with a central, regional or district office. While undoubtedly saving on premises and travel costs, and often being more convenient for field workers, operating from home can lead to them feeling more pressurised - with more responsibility and less physical contact with managers and support staff.

Still big factor

Evidence suggests that there has been a decline in general work absence from stress over the last decade, which is very encouraging. However, statistics still demonstrate that this is one of the largest single factors for sick days, accounting for 37% of work related ill health and 45% of days lost in 2015/16 alone. Put into perspective, this represents 11.7m days per year (2015/16) in the United Kingdom. 

The charity sector has a particular problem in that the demand for so many of its services is increasing in the face of pressures on its ability to deliver those services. This doesn't just affect field workers but also, for instance, contact centre staff, who will have the psychological pressures of not only a more intense work day but also the worry of knowing that the ultimate level of service may not be satisfactory.

Then, of course, there are the pressures of working under time limited contracts with third parties to deliver services and meet targets in conditions which may well have changed, with the worry that such contracts will not be renewed - followed by staff reduction within the charity.

So overall, no wonder stress and other mental health issues are inevitable issues of concern for charity managers - as long as they see them as such. It can be too tempting just to plough on regardless intently focused on the needs of the people the charity is trying to help, rather than thinking also of one's own employees.

The wider issue

Absenteeism and reduced levels of productivity have great financial and organisational consequences for any charity. Ignoring mental health and the reservations that surround the issue is ignoring a vast and damaging effect to our society – exacerbating the notion that mental health is different from or less of a priority than physical illnesses. With so many charities trying to change attitudes towards certain matters, the sector must stop itself falling into an attitude which needs to be changed.

Stiff upper lip

Close to a third of UK workers say they are not able to talk openly with their line manger if they are stressed and just 45% of those that have been diagnosed had told their employer.

After being diagnosed, 40% of individuals admitted they wouldn’t convey it to their colleagues because they don’t want to be treated differently. The stigma surrounding mental health and the consequent marginalisation of mentally ill people within society means that employers have “typically neglected to address it and still struggle to see mental health in the same way they see physical health.” (Simply Health – "The importance of addressing mental health issues in the workplace".)

Are we beginning to see a change in the way we deal with this issue? Certainly the right noises are beginning to be made and there have been some valuable initiatives. Following the launch of the Business in the Community Mental Health Toolkit last year, Dr Justin Varney, national lead for adult health and wellbeing at Public Health England, said: “All employers have a responsibility to support the health and wellbeing of their staff.”

Attitudes are changing across the UK and we are hearing more stories about how organisations are developing a workplace culture and prioritising the mental health of employees. It may seem burdensome to some employers who are under pressure to get the day job done and remain efficient. However, certainly for charities, healthy and productive employees are crucial to an organisation’s success.

Employees (and volunteers) are the biggest asset and make a charity what it is. It functions better when its people feel valued and comfortable by being supported financially, professionally and personally by their employer. This can only ease the situation, reduce absenteeism, increase productivity and motivation.

The role of insurance

There are insurance related solutions operated on a group basis which can be utilised by charity employers where facilities are provided for addressing health problems before they lead to significant or permanent absence from the workplace. Stress and more serious mental health issues, particularly when they are caused or exacerbated by work, should be addressed by charity employers as soon as they arise.

Resort to medically related insurance solutions can be tailored to a charity employer's circumstances and facilities should be in place as early as possible as part of the general risk management programme. Their availability to help employees, including those suffering from stress, should be properly publicised within the charity.

Many organisation benefit schemes are not used to their full capacity. Up and down the country information about Employee Assistance Programmes are pinned to a canteen noticeboard only to be covered over by staff driven miscellanea. These organisation paid facilities could be the difference between someone having a bad day or four weeks off where they have bottled up their anxieties.

Most group private medical insurance policies will have a 24 hour "healthline" available to their members. If you have one or are considering implementing one, income protection insurers encourage early intervention and have the tools and staff available to intervene before the situation becomes more difficult to look after.

Committing to good mental health

Here are some easy steps for your charity to follow about addressing the problem of mental health:

  • Consider whether any mental health stigma exists within your charity and question why.
  • Train line managers and senior management so they are comfortable to talk openly about the subject.
  • Improve the awareness of the issues: conduct staff surveys, launch awareness campaigns and champion non-judgmental attitudes.
  • Utilise existing or introduce a group private medical policy, health cash plan and/or employee assistance programme to offer a number of wellbeing benefits to your staff. This includes counselling, debt management, legal advice and information on eldercare or emotional and work-life issues.

Sutton Winson's Chris Hickey - mental health is a subject that even many charity employees choose to ignore or do not fully understand.
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