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Why are so many charity trustees clueless about finances?

Updated: Apr 23, 2023

Seven suggestions to help your board to understand the figures - and run a tighter ship

Why do most trustees look the other way when it’s time to discuss the finances at a board meeting?

“I’m not a numbers person.”

“I’ll leave this in Bob’s capable hands.”

(Or just silence as someone checks their phone, looks into space and picks their teeth while the long-suffering treasurer explains the budget.)

Society’s nonchalance about being rubbish at maths is spilling into charity board rooms.

Trustees boast about their lack of skill with numbers, but wouldn’t dream of excusing themselves from engaging with the rest of the board papers because they’re “terrible with letters”.

But trustees can’t delegate their financial responsibility. Whether they like it or not, every trustee has responsibility for the charity’s finances.

And let’s talk about poor Bob, an unlucky avatar for downtrodden treasurers everywhere. It’s a rum deal for treasurers to feel that they have the weight of the charity’s financial health on their shoulders.

How can we help trustees embrace the finances?

1. Provide finance training for all trustees.

Set the expectation from the start that not all trustees need to be number whizzes, but all should expect to receive basic finance training.

2. Make sure that the finances have a clear narrative, showing how they link with the charity’s activities.

Why is this costing more than budgeted? Does the balance of our expenditure feel in line with our strategic aims? Do we have our eggs in enough baskets in terms of income sources? How does this compare to previous years? Is this activity worth an investment in the short term for a longer-term goal? These fundamental questions don’t need an accountancy-level understanding of the management accounts.

3. Be imaginative in how the finances are presented: use graphs, pictures, diagrams, words.

Trustees, if you’re bamboozled by spreadsheets, be demanding about what would help you really get under the skin of the numbers.

4. Model a culture of all trustees interrogating the finances, whatever their backgrounds.

Trustees, we need to get over our nervousness about saying something stupid. I am told repeatedly by charity finance professionals that the best finance questions often come from non-finance trustees. I love these questions suggested by the Charity Commission that trustees might ask about finances. And finance trustees and chief executives, try not to present the finances as “fact”, with no room for discussion or challenge. Even better, get into the habit of coming to meetings with questions for your fellow trustees.

5. Treasurers: make sure you’re not indispensable.

It’s nice to feel useful, but a more important legacy might be to ensure that your fellow trustees can interrogate the finances.

6. Support your treasurer or equivalent to join a network of other treasurers for support and development.

7. Finally, if you are one of those trustees who feels nervous about the finances (and you are very much not alone), don’t be scared to ask for clarification.

Jump in, be brave and start to ask questions. If it’s not obvious to you, you’re almost certainly not the only one. Most treasurers would be over the moon that someone actually cares.

Support for treasurers and non-finance trustees, as well as support for recruiting finance trustees, is available from organisations including Charterpath, Charity Finance Group, The Honorary Treasurers Forum, Embrace Finance, the ICAEW and Reach Volunteering.

Penny Wilson is chief executive of Getting On Board. We offer oodles of free trustee training including the excellent To infinity and beyond; an introduction to charity finance for trustees

This article was originally published in Third Sector. Image by fauxels: for Pexels


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