Charities and Other Not-For-Profit Organisations
The Charity and ‘Not-For-Profit’ sector is variously referred to under different terms, including:
- Third Sector
- Voluntary Sector
- Community Sector
- Non-profit Sector
- Civic Sector
This is a huge, and growing, sector of the economy. Statistics issued by the Charity Commission for 2016-17 include:
|Charities on the Charity Commission Register:
|Charity income regulated by the Commission:
|Number of Trustees:
|Applications for registration:
This sector is driven by an altruistic desire to make lives better, often for those who are in some way vulnerable or disadvantaged, and the good intentions of those running these organisations cannot be underestimated.
But these organisations, and indeed the people running them, have been subject to high levels of public scrutiny over recent years, in particular over issues such as unacceptable fundraising practices and general poor governance. As a consequence, the sector is suffering a decline in trust and confidence.
We understand the issues and challenges faced by charity trustees and those charged with governance in all ‘not-for-profit’ organisations. We have acted for a number of such entities and have been able to help them with some of these challenges.
Our service is not limited to helping such entities to prepare their financial statements; of course we do that, but we also offer a much more comprehensive service, from advising on the different types of legal structure available when setting up a not-for-profit organisation, through to helping to ensure that the trustees / management are aware of their roles and responsibilities and that they act effectively in addressing the challenges that they face – in a nutshell, that they provide, in an ongoing manner, good quality governance for their organisation.
We are always happy to advise on any issue that you would like to discuss with us. The following is a summary of our main services to this sector, but we may be able to provide other services and we would be happy to discuss any of your requirements.
Our services include:
Preparation of your annual accounts in a format that complies with legislation and recommended practice for your particular type of organisation.
Presentation of those accounts to the trustees or directors, to ensure that they are fully understood.
We can provide a bookkeeping service and prepare monthly or quarterly management accounts so that you are kept up to date with your organisation’s financial performance.
Our payroll bureau provides a comprehensive payroll processing service, including compliance with auto-enrolment legislation.
Advice and assistance on any of the following issues:
We can provide various other services to suit your requirements. These include:
- Help with applying for grant funding;
- Providing monitoring or other reports for grant funders;
- Cash flow forecasts.
Governance is the way in which an entity conducts itself in each and every aspect of its business.
Good governance is essential to the success and good reputation of any organisation, while poor governance can result in, at best, poor practices – and at worst, high profile adverse events involving misappropriation, fraud, or wholly inappropriate procedures.
There have been a number of such instances occurring within charities over recent years, and this has served to elevate the importance of good governance in this sector.
The Charity Governance Code Steering Group has issued a Charity Governance Code, which is supported and endorsed by the Charity Commission. It can be found here:
The Charity Commission also issues a range of guidance materials to help trustees to instil and adhere to good governance practices within their charity.
The exact way in which trustees apply the principles of good governance to their particular entity will of course need to be tailored and regularly monitored to ensure that it is appropriate for its size, nature and characteristics.
We have a ‘Governance Health Checklist’ tool which can be tailored, and is intended for you to use in assessing your effectiveness in running your organisation effectively. This is by no means an exhaustive list of questions that trustees could ask, but it might provide a starting point on which to build and refine, according to your particular circumstances. Please contact us if you would like to talk to us about this.
Charity trustees are those charged with running and managing the charity. Their duties are onerous and should be taken seriously.
Charity trustees are ultimately responsible for everything a charity does, and can be held legally accountable for the decisions they make.
The Charity Commission issues variance guidance to trustees covering their duties, including CC3 ‘The essential trustee: what you need to know’ and CC3a ‘Charity trustee: what’s involved’.
We can also advise on any of these matters, should you wish to discuss them. This may be particularly useful if, for instance, you are considering becoming a charity trustee and need to know exactly what will be expected from you, in terms of your legal duties.
A charitable or other not-for-profit organisation may be constituted in many different ways.
It is important that the legal structure that is chosen for your particular organisation is appropriate to its nature, aims and objectives.
For charitable organisations, The Charity Commission has guidance CC22a ‘Charity types: how to choose a structure’.
We can also offer advice if you are thinking of setting up a not-for-profit business and would like help in deciding the most suitable legal structure to use.
Gift aid is an income tax relief that can be claimed by charities and Community Amateur Sports Clubs (CASCs) on monetary donations given by UK-taxpaying individuals.
There are certain requirements in terms of obtaining donor declarations and record-keeping in order for Gift Aid to be claimed properly.
Various guidance can be found from the HMRC website: https://www.gov.uk/claim-gift-aid
We can provide advice and guidance on the practicalities of obtaining declarations, record-keeping, and claiming Gift Aid. We can also make the Gift Aid claims on your behalf, if you would like us to.
Risk management is an important part of an entity’s good governance practices.
An effective risk management approach includes the identification of risks, an assessment of the impact should the event occur, taking steps to reduce the risk of the event’s occurrence, and finally planning how to deal with the consequences should the event occur.
It is imperative that trustees take risk management seriously, develop a risk management policy, and review the policy and the identified risks regularly.
No organisation is immune to risk. In addressing the need for an effective risk management policy, trustees are placing themselves, and the organisation, in the best possible position should any of the identified risk events occur. The presence of the policy should also help should any unidentified risk event occur.
We can advise in developing a tailored approach for your organisation to risk management. Please contact us if you would like to discuss this further.
WHO CAN HELP YOU?
Our Renewables and FiT Business Sector Specialists
Whether you are looking for a new accountant or simply would like a second opinion on your business, we offer a free initial meeting consultation on an absolutely no obligation basis with one of our industry specialists.
For further information contact one of our specialists: