The Charity Commission has published new guidance on managing financial difficulties in your charity arising from cost of living pressures.
Many charities are facing difficult circumstances resulting from rapidly increasing costs, with pressures on staff and energy costs particularly prominent at present. The concern is two-fold; the charity’s own cash flow but also the concern for those they serve and the cost of living pressures their own staff are facing.
A particular challenge awaits charities facing an increased demand on their services. And of course some donors may be tightening their belts and giving less if their own net free income has fallen.
The Commission’s guidance is written for trustees, especially trustees of smaller charities, who may need help when facing difficult decisions about their charity’s financial position. Indeed the separate CC27 It's your decision: charity trustees and decision making guidance is a recommended read for all trustees.
Trustees have an obligation to always act in their charity’s best interests, and the 15 questions trustees should ask guidance is an excellent place to start which will help any board of trustees focus.
More than ever trustees are facing the difficult juggling act of reducing costs now, in order to be able to preserve funds to support beneficiaries in the future, and meeting the immediate needs of the charity’s present beneficiaries, with the possibility that in the future the charity will have to reduce its services or close entirely.
The next step
For further questions please contact Allan Hickie, or your usual UHY adviser.
