How does your charity measure up? - Join us for Finance Count 2019 - ALSO THIS MONTH: Charity Finance Group
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The magazine for CFG members August 2019
How does your charity
measure up?
Join us for Finance
Count 2019
ALSO THIS MONTH:
HOW FAITH DIVERSITY CAN UNITE US WHO MAKES THE DECISIONS ON
YOUR CHARITY INVESTMENTS?
KEEP IT LOCAL CAMPAIGN 2019
EDITOR’S NOTE
It’s all change
Contents
What’s the big issue? 07
at the top!
The Charity Tax Commission’s plans for reform.
Cover story: How do you
measure up? 08
CFG’s Martin Hubbard and Naziar Hashemi
of Crowe discuss CFG’s free financial
It’s been an eventful couple of benchmarking tool Finance Count.
weeks with changes in some Caron’s Comment 10
significant top positions. Our new PM is neither a buffoon nor a jester.
It’s time to take him seriously.
First and foremost, we say farewell to Nicki Deeson as she steps down as
Chair of CFG in September, and welcome Gary Forster as our new Chair.
Following her final board meeting, Nicki shares what she’s learned from Governance Focus 11
her seven years as trustee and two as Chair, page 11. CFG’s outgoing Chair Nicki Deeson shares
Hopefully the transition will be slightly less controversial than the other big what she’s learnt in her journey so far.
change at the top – the appointment of Boris Johnson as PM. In a very quick
time he has dialled up the rhetoric on Brexit, delivered one of the biggest Special Interest Group 12
cabinet shake ups of modern times, and embarked on a country-wide charm
offensive, with renewed emphasis on domestic infrastructure and investment. Lisa Kiew of Quakers in Britain outlines plans
But after all of the fluster around the leadership contest, what now for Brexit? for a faith-based special interest group.
Caron Bradshaw reviews his past performance, including famously writing
columns in favour of both leave and remain, and weighs up the likely Commissioning Focus 13
scenarios on page 10.
Nick Plumb of Locality tells you about Keep it
Our cover story this month is about benchmarking, or put simply ‘learning Local 2019.
from others’ as Naziar Hashemi from Crowe describes it. Registration is now
open for Finance Count 2019, and this time, it’s free of charge for members. Gift Aid Focus 14
If you’re new to Finance Count, it’s a planning tool that encourages you to
think critically about why you do what you do, how others do it, and what Matt Kelcher from the Charity Retail
you can learn. Find out more about how it works, how it can help you, and Association takes a look at the importance
examples of how it’s helped other charities in Naziar’s article on page 10. of retail Gift Aid.
On the subject on learning from others, CFG has a brand new special
interest group for faith charities in the pipeline, with the help of Lisa Kiew Investment Focus 15
from Quakers in Britain. After issuing an invitation in an earlier Finance Who makes the important decisions on your
Focus, she convened a meeting at Friends House in July, and found that, charity’s investments? John Redwood of
while incredibly diverse, faith organisations have much more in common Charles Stanley Wealth Managers explores.
than first thought. Read her report on page 12.
Localism, as a movement, continues to gain ground, especially when it CFG events 16
comes to local authorities’ approaches to public service commissioning.
Locality, the organisation which supports community organisations, has Social Care Conference 2019, plus don’t
launched a campaign to build momentum and help shape the new approach. miss the Tax, VAT and Gift Aid Conferences
Keep it Local is based around a network for councils, and six guiding this autumn.
principles. Nick Plumb, Locality’s Policy Officer explains how you can
get involved on page 13.
Looking ahead to autumn, and a date for your diary: Gift Aid Awareness Day.
We’ll be covering it in next month’s Finance Focus, but in the meantime, Production and editing: Abby Warren, Marketing
have lined up three conferences on tax and Gift Aid. We’re delighted Coordinator
that Matt Kelcher from Charity Retail Association will be speaking Design: Steers McGillan Eves
in Birmingham on 26 September. On page 14, he explores the
If you have any queries about Finance Focus or
practical aspects of retail Gift Aid. are interested in writing for us, please contact
Finally, we welcome John Redwood, in his role as Chief kate.bines@cfg.org.uk
Global Strategist at Charles Stanley Wealth Managers, Neither CFG nor the authors of individual articles
who, on page 15, looks at the interplay between can accept liability for errors, omissions or any
investment managers and trustees of charities actions taken as a result of the content and
in effective investment management. advice contained within Finance Focus.
© Charity Finance Group
Enjoy the rest of the summer, A Company Limited by Guarantee.
and see you in September. Registered in England No. 3182826
Registered Charity No. 1054914
15–18 White Lion Street,
Kate Bines, Head of Marketing & London, N1 9PG
www.cfg.org.uk
Communications, Charity Finance Group
3
MEMBER MATTERS MEMBER MATTERS The latest updates for CFG members plus
opportunities to contribute to CFG’s policy work.
Organisation of trust, we are acutely aware of the
importance of transparency, and of New to chairing?
CELEBRATING
the month Do you need
demonstrating impact and value.
EXCELLENCE
What positive changes has your
organisation seen in your sector?
more support? IN CHARITY
Prostitution receiving a platform in
Parliament, most recently on 25 July 2019
– “The limits of Consent – CPHRC Inquiry
into Prostitution in the UK” was launched in
the House of Commons.
FINANCE
We are now seeing prostitution and those in
We’re delighted to welcome women@thewell as our August favour of changes in the law having a voice,
member of the month. women@thewell is a women’s only and positive moves towards abolition of the
service in London, which supports women whose lives are
sex trade. The Association of Chairs’ Beacon Programme supports
affected or at risk of being affected by prostitution. Here We have also seen a raise in profile of the Chairs and Vice Chairs of smaller charities and social
debate around prostitution across the world,
Finance Manager Stanislava Pun tells us about their work with events in the UN and CAP International. purpose organisations (with an income under £1 million);
and services, and what changes she would like to see What could the government change delivering interactive workshops across England, lunchtime
come into effect from the government. to make your charity’s life easier? webinars and providing Chairs with a host of online written
Ring-fencing of funding for specialist resources. The programme has been developed with the Have your contribution
What is your organisation’s What has been the biggest women’s services and awareness raising
campaigns aimed at the general public, to complexities of chairing a smaller charity in mind. heard and take part in the
biggest achievement?
Our consistency of service; as we enter
change to the charity sector
since you started working in it? dispel myths about ‘fat cat’ charities, and
Future Beacon workshops and webinars event at bit.ly/BeaconProgramme.
CFG Awards this year!
our twelfth year, we have created and Many charities have closed due to funding the amount of charity fraud. Campaigns
will help you to: The workshops cost £20, with a travel Have you and your team made an
established a place of safety and support problems, and restricted government such as this would educate the public outstanding contribution to your charity?
about the difference between small and bursary available to delegates attending
for women. funding. This paired with the mistrust of • Enable your board of trustees to work If so, we’d like to hear about it, and
large charities, providing longevity for the workshops from organisations with
the charitable sector has found us in a well together recognise it in one of our new awards
Huge cuts to a wide range of statutory smaller organisations which are vital an income under £100k. To keep up to
tough environment. • Work effectively with your chief executive categories:
services has seen a negative impact on in supporting women. date with the programme’s activities and
services for women and in this landscape Whilst women@thewell has experienced or equivalent upcoming events you can sign up to • Inspirational trustee
we are proud to have a service which is a growing support in funders and public Recognition of the vulnerabilities of women • Manage conflict and support difficult Beacon bulletin – bit.ly/Beaconbulletin. • Embracing digital in reporting
thriving and expanding. who have experienced sexual violence and conversations • Innovating in the finance team
a specialist route of provision for housing, The programme is kindly funded by
Our five year strategic plan focuses on employment, physical and mental health ‘Great to have some tips about what has the National Lottery Community Fund Also, it’s time to recognise 2019’s Inspiring
supporting women to exit prostitution, treatment, in order to facilitate exiting. worked in other organisations – and to till June 2020. Financial Leaders in our biennial award for
whilst seeking to extend our reach and realise how similar we all find it. We are not individuals who have shown outstanding
What is the one piece of Find out more at financial leadership.
impact through developing training, alone!’ (Workshop participant, Brighton). www.associationofchairs.org.uk/
undergoing research, and through our technology your organisation To find out more and to enter visit
couldn’t do without? Join the programme for free at bit.ly/ beacon.
Huge cuts to a wide range
advocacy for policy work, the abolition Beaconreg and then book onto a Beacon cfg.org.uk/cfgawards.
of the sex trade. Mobile phones – helping us to stay in
What is the largest source of of statutory services has touch with women and services, to keep
our outreach teams safe. It also allows us
support your organisation has
gained from CFG membership? seen a negative impact on to respond swiftly to opportunities and
work more flexibly.
services for women and in CFG faith WELCOME TO OUR
CFG and members Quakers in Britain are
As a new CFG member, we look forward exploring setting up a multi-faith special
this landscape we are proud
to accessing events and training sessions
NEW MEMBERS
interest group. Interested in finding out more
which we hope will give us an opportunity
to discuss current topics with finance to have a service which is Find out more about women@thewell special or registering your interest? Email Director
of Business Development and Events Dawn
interest
professionals across the sector. We would McNish at dawn.mcnish@cfg.org.uk.
also like to keep abreast of developments. thriving and expanding. at www.watw.org.uk
Read more about plans for the SIG in
group
Lisa Kiew’s article on page 12.
Voice your views Email policy@cfg.org.uk to
contribute to any of our policy work
Save the date – Gift Aid How prepared are you for The impact of cuts on With Brexit taking up lots of time amongst INGOs working in
civil servants, there are still the beginnings
Awareness Day 2019 Brexit? Take part in our survey your organisation of preparations being made by government high-risk jurisdictions
We were delighted with the success of With uncertainty around Brexit continuing, and With a new government being formed the departments, we are really keen to hear from If you’re an INGO working in high-risk
our Gift Aid Awareness Day campaign in ahead of the new Prime Minister’s announced much delayed Spending Review will not be our members on the potential impacts that jurisdictions we are keen to hear about any
2018, which aimed to increase the public’s deadline for Brexit on 31 October, CFG is soon to follow. Spending reviews take place further cuts, or cuts that have already taken problems you face with banking and or due
understanding of what Gift Aid is and how keen to hear your views on how prepared every two to five years and are a process place might have both on your charity, but diligence, as we’re are looking to determine The Freedom Fund Live Life Give Life
we might encourage donors to tick the box, your organisation is for a no-deal exit from where government sets departmental budgets also in your region as a whole. Let us know common problems in this space, and how
helping charities claim the right amount of the European Union. for a number of years ahead. With tight public at policy@cfg.org.uk. CFG working with partners might be able Merton Mencap National Community
Gift Aid. This year, we’re planning for the day finances and with local government budgets to help. Please get in touch via the policy Association for Land Trust Network
Take part in our survey at
to be even bigger and better, and are keen already under substantial strain, this will be of email to set up a conversation. Culture Enterprises Passage 2000
bit.ly/CFGNoDeal.
for our members to get involved. Save the great significance to charities and the general
date for Thursday 3 October 2019 and get in The League Against
public more generally.
touch to find out how you can be involved. Cruel Sports
Email policy@cfg.org.uk to have your say in our policy work
4 5
ON OUR RADAR CFG’s policy work: representing your views to decision makers,
plus research, guidance and news from around the sector.
News in brief... Policy progress
CFG comments on Research and What’s the big issue? CFG signs joint letter
Boris Johnson as new
Prime Minister
Read CFG Chief Executive Caron
reports The Charity Tax Commission’s
plans for reform
demanding further details
on Shared Prosperity Fund
Alongside NCVO and the Employment
Bradshaw’s response to Boris Johnson’s Related Services Association, CFG has
appointment on page 12, plus CFG Sector co-signed a letter asking Boris Johnson
Specialist David Ainsworth explores the to provide further clarity on the Shared
meaning for the sector in the CFG blog – Prosperity Fund, the fund which
bit.ly/NewPMBlog. July has seen the long awaited publication charities (on-top of the basic-rate they will replace EU funding (particularly
CFG urges the new Prime NCVO 2019 Almanac CFG supports Crowe in of the Charity Tax Commission report already receive) would be a real positive European Social Funding) once we
Reforming Charity Taxation: towards a for charities and something that CFG have left the European Union.
Minister to ‘mend the tears released calling for removal of need stronger civil society. An independent amongst others has called for before, Alongside further clarity we have also
in our social fabric’ for trading subsidiaries commission has long been discussed in the as is the proposal for a mandatory asked for the funds to be at least the same
NCVO have released their UK Civil Society
sector, and to hold the commission at this payroll giving scheme. The Universal level as previously delivered, ie that there
Almanac 2019, which provides an overview will be no funding gap between the closure
Developing measures that support civil The paper Charities and trading – time for a time of political and economic tumult is an Gift Aid Declaration Database would also
society won’t be top of the new PM’s
of the some of the key findings, including of EU funding pots and the new SPF,
rethink was written by CFG Special Advisor exciting moment on an important issue. simplify the administration of claiming Gift
in-tray, but the bigger priority right now is that there are now 166,854 voluntary and that the design will be improved
and Crowe’s Global Head of Non-Profits Aid, and help to decrease the amount of
tackling the systemic challenges of welfare organisations in the UK. While the total The commission itself brought together to work better for the disadvantaged
Pesh Framjee. This article outlines a way unclaimed Gift Aid. There is no lack of
and funding of local government that are number of voluntary organisations remains a number of thought leaders on both tax groups and areas.
forward for charities which would reduce those who can help to determine the
Finance Count 2019/20
having such a devastating impact on stable, there is notable growth among and the charity sector, including CFG’s
our beneficiaries.
the administrative burden not just of feasibility of these proposals.
bigger organisations, with organisations Special Advisor Pesh Framjee and chaired
charities but also of HMRC, as they would
Boris Johnson and his new chancellor over £100m now accounting for 22% by former Chair of Inland Revenue Sir We would have liked to see the proposal Now in its third year, we’re once again
not need to process tax returns for which
face an enormous task to unite an of the sector’s income, and eight in ten Nicholas Montague. to consult on extending rates relief to offering you the chance to tap into a
there is invariably no benefit; “The current community of charity finance professionals,
increasingly divided society and deliver organisations with an income under wholly-owned charity trading subsidiary
tax regime means that much of the normal It is a significant undertaking to bring to see how you measure up when it comes
economic stability, as we head ever £100,000. companies go further and remove the need
closer to the dire economic and social fundraising activity of a charity is treated together the commissioners, take on board to financial performance, and ensure that
Other key findings include that the as trading and can lead to a tax liability. for trading subsidiaries entirely, as outlined
consequences of a no-deal Brexit. There responses received, organise roundtables your charity is on track to have the
public and government remain the The tax rules are difficult to apply in practice in the recent paper written by Pesh Framjee strongest possible finance function.
are unchartered waters ahead, which will throughout the country and find consensus,
not only need strong leadership from the biggest sources of income, with the and many charities default to putting such and jointly supported by ourselves and
and NCVO deserves significant credit for Over the last four years, we’ve built a
start, but also a strong future relationship income from government falling as an activity through a trading company.” ACEVO, but it is still a positive step. We
delivering on such an undertaking. strong alliance with benchmarking
with the voluntary sector to help mend overall proportion. would have liked to see the removing of specialists Agenda Consulting and top
the tears in our social fabric. Read the full report here: The report also provides a helpful overview the matching requirement for the Gift Aid accountancy firm Crowe to develop the
bit.ly/CroweRethink. of the purpose of charitable tax reliefs and a Small Donations Scheme (GASDS) to be
New Charities Minister
questionnaire, scorecards and expertise
summary of the main charity tax reliefs that a little bolder. you need to understand your performance,
announced charities and donors receive, although the
principle that money given for public benefit
We would also support the government and how it compares to others.
Baroness Barran has been appointed doing more to promote awareness and This year, if you’re a member of Charity
should not be subject to tax could have
Guidance
as new Civil Society Minister. CFG’s understanding of Gift Aid. CFG’s Gift Aid Finance Group, participating in Finance
been more prominent. Count will cost you nothing. So register
Caron Bradshaw believes this is a positive Awareness Day (3 October) will support this.
appointment, and highlighted the sector One contentious point which underpinned now and help us shape charity finance
must still push for charities to be high Of the ambitions for the future, a policy; by taking part you will be directly
the commission was the demand of fiscal
and support
priority, “It’s great to see the appointment comprehensive review of VAT for charities helping us to build a picture of charity
neutrality from the recommendations. finance, identify trends and issues intended
of a new minister with a background in civil is long overdue, with a feeling amongst
While it is politically understandable why to help strengthen the sector’s voice – sign
society, and it’s good that the charities many in the sector that the current system
this requirement would be in place and help up at www.cfg.org.uk/financecount19.
brief is no longer shared with sport. is not fit for purpose, a systematic look at
However the appointment of a peer to the
reduce the number of quixotic suggestions
the problems contained would be most Read more about Finance Count in our
role, together with the time taken to make that will be put forward, there is something cover story this month on pages 8–9.
welcome, and might potentially offer the
of a tension between presenting practical
Making Tax Digital Data Protection
an announcement, suggests that we must opportunity to either reduce or remove
continue to lobby for a higher priority to be proposals that can be introduced relatively
irrecoverable VAT from the sector.
quickly and ambitious and creative ideas.
– two free CFG and Brexit – is your
given to civil society in this government.”
As Sir Nicholas commented at the report’s While the recommendations in the report
Legal changes
webinars organisation prepared?
launch, the treasury would have little if any are well researched and a considered
recommended in Scotland reason to oppose proposals that won’t
cost them any money.
contribution, we would not want to see
government push back on any further, more
OSCR, the Scottish charity regulator, has To help members feel equipped to The government has launched new ambitious asks in the future on the basis of
received 307 responses to a consultation continue to make all the changes required guidance to help organisations which The recommendations are split into
this review being undertaken. Of course
on legal changes, including publishing for Making Tax Digital, CFG has provided share personal data in the European short-term reforms which could be
annual accounts in full for all charities on this is not a criticism of the report itself,
two free webinars on the topic; one with a Economic Area (EEA). If your organisation introduced relatively quickly, and those
its register, and an external database of but rather the way it might be used by
representative from HMRC to run through does shares personal data with which look at the longer term challenges
trustees. Most responses supported the political decision-makers to deflect
how to comply with MTD which includes organisations in the European Economic facing the sector, where immediate
proposed changes, but more is still to be other suggestions.
answers to questions from our members, Area (EEA), you will need to take steps to solutions cannot be offered as there is
done before legislation is introduced.
and another with members of the finance ensure you comply with data protection either insufficient data or a lack of research While we have raised a few caveats, overall
team of Cancer Research UK, where they laws if the UK leaves the EU without a deal. on the implications. There are many the report presents a set of provocations
explain in detail what steps they took to For UK charities that only share data within interesting proposals contained in the report, that charities should broadly get behind.
meet the requirements. If you would like the UK, there will be no change. The ICO but a number which are of particular note. Whether or not they become a reality will
to be sent a recording these webinars have produced a six step checklist which greatly depend on what happens next, and
Of the short-term recommendations, there
please email webinars@cfg.org.uk highlights the process to take now for data how we as charities and sector bodies get
are several that the sector should fully get
and we will send on a recording. protection compliance if the UK leaves the the government to listen and enact the
behind – re-directing higher rate relief to
EU without a deal – bit.ly/SixStepBrexit. best of these proposals.
6 7
COVER STORY
How do you The scope of the survey is wide, covering:
• General information; What is benchmarking
specifically for charities enabling finance
professionals to assess their charities
following the completion of the 2018
Finance Count were:
measure up?
and why is it vital to
and their finance functions across a
• Purchase level and procurement; Systems not keeping pace with
range of processes.
growth and change. There were a
the charity
expenses;
The tool is comprehensive and requires the significant number of charities with key
• Payroll; charity to invest time to extract and input the systems reaching end of life and with
• Income processing; sector? information required to deliver a bespoke
scorecard comparing the charity to those
systems which were not integrated requiring
analysis, reconciliation and interpretation
Join us for Finance
• Planning and budgeting; that it chooses to benchmark itself with. of results and often leading to more than
• Internal and external reporting; Importantly, not every section of the tool one version of the truth. There were also
needs to be completed and each charity indications that charities had not taken
• Cash and treasury management; Naziar Hashemi,
Count 2019
can focus on the areas that it wants to advantage of automation in areas such
• Public service delivery; Partner, National benchmark. For example one large national as expense processing or purchase
Head of Non Profits,
• Profile of finance function; charity was interested in understanding order systems.
Crowe UK LLP
whether the finance resources involved in
• Future developments; their budget process was reasonable for
• Non-charitable trading and Now more than ever an organisation of their size and complexity;
an INGO was interested in understanding
Finance Count is back for a third cycle, and this
• Central function costs. charities are focusing on the percentage of organisations of their
time it’s free of charge to CFG members. But
Once you’ve completed the survey (which results, reducing costs and size with an internal audit function They
what is it and why do it? In his last article for
you’ll have at least ten weeks to do) and
identified which other organisations you’d improving on efficiencies. also wanted to understand who had
outsourced internal audit and why. The key to
Finance Focus before he leaves CFG, Martin
like to benchmark against, our delivery
partner, Agenda Consulting co-ordinate the
In this operating context, Key questions to consider when benchmarking is
benchmarking as a tool
Hubbard, Director of Customer and Business questionnaires, crunch the data, analyse the
results and prepare individual scorecards. can be very helpful if
deciding which of the processes to select
for completion and benchmarking are: measuring what
Support, and Crowe UK’s National Head Early in 2020, you will get your scorecard used properly. 1. What are the key business processes matters.
of Non-Profits Naziar Hashemi, and a phone call with Agenda to help or competitive positions or strategies
tell you more. interpret the results, invitations to free It can help decrease costs and improve which we need insight on?
Interestingly, we have noticed more charities
workshops to discuss trends and ways to efficiencies and effectiveness, and support 2. W
hich have the greatest improvement looking at investing in their infrastructure
improve your performance, a sector-wide the charity in making the right operational, potentials? and upgrading their systems. There is also
statistics report covering the whole data set, tactical and strategic decisions in allocating
3. Which processes require the most a trend towards using technologies to drive
and access to the benchmarking database. scarce resources.
essential improvements? more efficiencies.
That’s one good reason for signing up, Benchmarking can be used as critical
4. Can some processes be improved Charities were finding it challenging to
but there are other benefits for you as thinking tool to answer three important
without benchmarking? embed full cost recovery despite the fact
a CFG member, and the wider sector. questions: that margins in some areas were getting
Together, the detail and the scale of the 5. Which comparable organisations do we
• Why do we do the things that we do? tighter. 61% of respondents did not have
survey gives CFG an accurate picture of want to benchmark ourselves against? a full cost budgeting model compared
emerging trends, issues and challenges • How do others do it?
6. How easy will it be to make the necessary with 39% that did. Despite the fact that
in charity finance, which informs our policy
• What can we learn? change in our organisation? Will there be the expectation may be that small
work, strengthens our voice, and shapes
resistance to change and what will be organisations would not have such a
What is Finance
Especially if you’re setting targets for our programmes and services. It also helps Put differently and simply, benchmarking is
the cultural barriers? system in place there was no difference
improvement, such as reducing the cost us track how these issues change over time. learning from others. In the charity context, in terms of size of organisations. It will
Count and why is
of processing expenses or payroll services, benchmarking is a process for measuring be interesting to understand whether
you’ll need information from a variety of and improving performance. The key to there have been any changes in these
it important?
sources to make sure they’re achievable. benchmarking is measuring what matters. percentages and trends in the 2020 Finance
Maybe you use past performance as a guide, Types of benchmarking Count as we are seeing improvements in
and aim for incremental improvement. Maybe There are three main types of benchmarking, charities better understanding their cost
Together, the detail
you’ve had anecdotal evidence from another internal, external and best in class. structures and modelling full cost recovery
charity – it worked for them, can it work for
Benchmarking is for contracts. This better understanding is
and the scale of the
you too? Internal benchmarking is used when
leading charities towards turning away
It’s difficult to get a real sense of what can
an organisation has set and proven best
learning from others. unprofitable grants and contracts.
Martin Hubbard, be reasonably expected, but comparing survey gives CFG an practices and it wants to measure itself or
different segments of its operations against In the charity context,
accurate picture of
Director of Finance, yourselves with how other organisations in one another. It is also useful where there are
benchmarking is a
Charity Finance the sector are performing can help, especially Partnered by Crowe UK and Agenda
no comparable external benchmarks. Consulting, CFG’s Finance Count is open
emerging trends,
Group if they have similar business models or deliver
process for measuring
similar services. External benchmarking is used when an for participants. There’s still plenty of time
issues and challenges organisation wants to evaluate and assess to register, and you can sign up online at
As finance directors and It was this thinking that led us to launch its performance against others within its and improving www.cfg.org.uk/financecount19 by 30
managers, we all know
Finance Count in 2015, as a practical
benchmarking tool that would enable in charity finance, own industry or sector.
performance.
September. Once registered, we’ll guide
you through the process, and be on hand
about the pressure to individual organisations to track their
performance against those of others with which informs our Best in class benchmarking is used
mostly when an organisation needs to
to answer any questions you may have.
deliver effective services
at a minimum cost, but how
whom they share characteristics, and for
CFG to understand the issues that are
policy work, strengthens go outside of its own industry to compare
to benchmarks set by world class
Once the survey is completed CFG and
our voice, and shapes
Crowe are planning to carry out training
organisations.
can we judge whether what keeping us FDs awake at night! and workshops to explore ways to
our programmes We are pleased to support CFG for the third improve finance function processes and
we are currently doing is You maybe already registered for 2019/20,
year with Finance Count. This is a unique performance and to pick up on key trends.
this may even be your third round, but if not,
good, bad or indifferent? you’ll need to know what to expect. and services. financial benchmarking tool designed Two of the many trends we identified
8 9
CARON’S COMMENT GOVERNANCE FOCUS
Our new PM is I believe that Johnson is not, despite his
protests to the contrary, an ideological What I’ve learnt Trying to ask questions (something I learned
from Henry Stewart of Happy), rather than
neither a buffoon as Chair of Charity
believer in Brexit. Former senior giving opinions and answers, has been
Conservative minister, Lord Heseltine, something I strive to do more of, and a really
rather cuttingly said Johnson, ‘waits to see good approach for me to learn. My aim is to
the way the crowd is running then dashes ask questions that will enable those around
nor a jester. It’s Finance Group
in front’. Whether you love him or loathe him me to reflect on how they are doing things
there is no doubting that Johnson reads the and confirm it is the best way – not to get
political landscape rather well. He has timed my own agenda across.
his move for Number 10 perfectly and will
time to take him
wish to remain there.
As in the run up to the referendum, Johnson
will now have two strategies; one a hardline
exit and the other binning Brexit entirely.
seriously.
Which way he will jump will depend on
the mood in the country and whether the
‘Remainers’ unite. He will have no fear
The relationship
about junking his strategies at a moment’s between Chair and CEO
is absolutely crucial to
notice if needed. His decision not to stand
in the last leadership contest is testimony
to this. Johnson fights to win.
maximise the effectiveness
of the charity. I have always
I think a deal is dead. It is in my view
improbable that, having united for the past
three years, the EU will suddenly shift on the
big stumbling blocks. It’s not impossible of strived to optimise that.
course but would be against the flow thus
far. I don’t think we will crash out on 31 I have been part of different boards – both
Caron Bradshaw, October – he doesn’t have a majority and as a trustee and as a staff member. It shows
Chief Executive, MPs on both sides of the House don’t have me how one individual on a board can make
Charity Finance Group the stomach for it. Revocation of A50 is a massive difference, either positive, or
more remote because remain leaning MPs sometimes challenging/detrimental. As a
have failed to unite behind a single position staff member I’ve found myself expecting
Caron Bradshaw reflects on Boris Johnson’s appointment meaning votes in a general election trustees to be ‘better’ than I am. As a trustee,
as the new Prime Minister, and reviews her predictions on would be split. Nicki Deeson, I want to be thought of as a fellow human but
International Finance Director,
Brexit so far. In my view, the polls will hold the key. A Amnesty International
that may not be how we are perceived – as
general election will only be called if it’s trustees we let staff down sometimes when
We have a new PM. During his leadership working majority to just one). The will of almost certain that Brexit party supporters they realise we aren’t perfect, or don’t always
campaign Boris Johnson used the harshest Parliament remains against a WTO/no would back Johnson and opposition parties After seven years on the CFG Board and two at the helm, do exactly the right thing
of language on Brexit. This was of little deal Brexit. Those buoyed by the hardline
surprise to me. After all he was courting the Brexit rhetoric in parliament are likely to be
continue in disarray. Johnson will remember
that in the run up to the last election May
Nicki Deeson will be stepping down this September after The relationship between Chair and
CEO is absolutely crucial to maximise
votes of the Conservative membership and offset by those loudly speaking in opposition thought Labour could be put to the sword an extended term as CFG Chair, and now in her transition the effectiveness of the charity. I have
not the wider country. to it. More remain MPs than Brexit backing
MPs may be nervous about their seats
and then only succeeded in losing her phase has completed her final board meeting. As part of always strived to optimise that.
majority. He will be loathed to repeat the
YouGov polled Conservative party
come the next election based on 2016 – experience. The recent bi-election result will a warm farewell from us, we’ve asked Nicki to share her “Good chairs are thoughtful about their role
members in June. On virtually every
measure, from breaking up the Union to
but nearly 6 million marched against Brexit strengthen this line; if the Conservatives had highlights, what she’s learnt on her journey with us so far, and constantly reflect on how to do better”
(Association of Chairs). There have been
and overtly pro-EU parties in the European wooed those Brexit Party voters their loss
crashing the economy, the party faithful
elections attracted roughly the same as the would have been a win.
and about her legacy. dilemmas and challenges – and in those
thought Brexit would be worth it. In fact, the situations I sometimes tend to think round
Brexit party. The ‘Brexiteers’ are talking a
only step too far was a Corbyn government; If the polls show a shift towards remain What has changed at CFG The biggest thing that has changed and round in circles – should I involve board
confident fight but they will be calculating
and then only narrowly (51%) with 39% (particularly if they show a shift towards a since you’ve been involved? has been me. What have I learnt? officers or make a decision myself? What
popular opinion and potential voter
being happy to deliver Brexit if it led to that remain backing Corbyn’s Labour) Johnson CFG’s impact. I believe that now it Improved public speaking skills – something is my role here? Having really supportive
intentions perhaps more than displaying
scenario. Nearly half (46%) would be happy will not call an election, preferring instead to feels different to new people joining I really wanted to get more confident with, board officers at my side has meant I’ve
a pure belief in Brexit. revoke A50, blame it on the remain camp and it’s true that the more you do it, the
to see Nigel Farage become leader. I have charity finance teams – however junior been able to bounce things off them and
no doubt that this information did and will In March I made some predictions – how and the EU and sit it out until the next they are; it now feels like a true movement easier it gets. I don’t exactly love it yet, helps me reflect and do the right thing.
continue to colour the actions of our new did I fare? I said I did not think we would election. With such a volatile political of members, which they are an important but I am getting less stressed!
Prime Minister. crash out of the EU on the 31st. We didn’t. environment charities should plan for the part of. The most engaged CFG members What has your legacy been?
Chairing meetings – I hope I’ve learnt to When I first started as Chair, I wanted to
I thought a longer delay would be granted possibility of both a general election and in a charity might be anyone from the
The new appointments to cabinet also achieve a good balance between facilitating see a mentoring scheme happen, and
and we’d take part in the EU elections. a no deal. junior accountant to the CEO – and that
speak volumes. We are witness to the input from all trustees, the senior management now it has! We have set up 25 pairs of
It was and we did. I thought we might I will leave one final observation. I have has resulted in a step change in terms of team and adding my own perspective as Chair.
biggest of political manoeuvres of recent have a series of indicative votes but that mentors and mentees, and as a mentor
deliberately referred in this to ‘Johnson’ topics covered and support members
history. Johnson is not fighting an these would take us no further forward In a governance role, I have needed to stand myself I loved being a part of the scheme
and not Boris. Whatever your political provide each other.
ideological battle to deliver Brexit. because Brexit as a single idea cannot back and be strategic. I have learnt that I’m and learnt a huge amount from my mentee.
Remember he infamously wrote both persuasion our now PM is not a buffoon Also, the CFG Inspiring Financial Leadership
command a consensus. We did and they naturally a project manager, I love turning I am so excited to see the mentoring
a pro and leave EU column in the run or a jester – he is a deliberate political course – everyone I’ve met who has
didn’t. I thought May or MPs might push an aim into a list of tasks and timelines and scheme taking off and going from strength
up to the referendum. being who has purpose in everything attended this course has loved it – and so
for a revocation of A50 if public opinion getting things ‘done’. I have had to restrain to strength. Personally I know of charities
he does – take him seriously. did I. It has met a real need and started to
Whatever the posturing, there are some continued to shift against the referendum myself and stretch another part of my who provide technical training to their
result. That didn’t happen. transform the role of finance, helping finance skillset – ie learning to stand back and finance teams but can’t afford to provide
realities to overcome. The Conservatives
managers feel empowered to get out from support the organisation and the staff management training, so mentoring is a
do not command a majority in the House Overall we are where we have been for First published on the CFG blog behind their spreadsheets into the charity to run their organisation in the way they brilliant way to develop your management
(and the recent loss in the Brecon and some time. Deadlock. There is no easy www.cfg.org.uk/blog. where they can add most value. have worked out is best. skills – either as a mentor or a mentee.
Radnorshire bi-election reduced the way out. So what happens now?
10 11
SPECIAL INTEREST GROUP COMMISSIONING FOCUS
How faith difference made in their name. They also
expect their charities to be exemplars, and Why we need Better services, reduced demand
and stronger local economies
to Keep it
diversity can
live out the faith in the way we work. To use The Keep it Local campaign aims to
a Quaker phrase, faith-based and faith- commit councils to work in ways like these
inspired charities “work for the Kingdom that harness the power of our charities and
of Heaven on earth”. social enterprises. We believe that if councils
Local
But these high expectations of us weren’t do this the impact on communities is huge.
the only thing we found in common; we
unite us
Community organisations play a unique
quickly came up with a list of topics for role in the local service landscape – in
future meetings, ranging from funding particular, working with people with complex
sources open to faith-based charities and needs, who find themselves a long way from
barriers to accessing funding to how to the labour market, or who face loneliness or
simplify the way we work. We united in feeling Nick Plumb,
Policy Officer, Keep it Local social exclusion. So, from homelessness to
that a faith-based and faith-inspired charity employment support, children’s services to
special interest group would provide us as adult social care, community organisations
professionals with space to share and learn
about finance matters in our common faith
Through unlocking community power, Locality’s Keep it are vital where trusting relationships and
context. Finance roles often straddle Local campaign aims to redirect commissioning away innovation are required.
boundaries and work with many different from large-scale outsourcing. Nick Plumb takes you Services provided by community
stakeholders. The social sector needs that organisations reduce long-term pressure
faith-based and faith-inspired charities seek through the features of the campaign – and how you on the public sector. Local community
to address are complex and our individual can get involved. organisations are more likely to solve
differences bring new perspectives and underlying issues upfront because of the
solutions to these issues. As those dealing with charity finances, steps places can take to make the move way they work – services are holistic and
you’ll know how much of a challenge working away from bureaucratic commissioning – joined-up with other local service providers.
with statutory sector commissioned services Such an approach tackles ‘failure demand’
• Breaking contracts into smaller lots
can be – faced with contracts which don’t (bit.ly/KeepSaving) – problems which have
meet the full cost of delivering a service; • Using grants where possible
mounted up over time, having not been
disproportionate bureaucratic and financial • Announcing commissioning intentions as properly addressed when they were first
stipulations attached to tenders; never- early as possible
Faith charities are well-
reported – reducing pressure elsewhere
ending measurement of outputs, rather than • Embedding co-design into commissioning in the system.
placed to connect the
outcomes. Contracts at a scale that suit processes
neither those using a service, nor the By commissioning community organisations,
personal to the social, charities best placed to offer support. These are just a few ideas of simple steps councils can also ensure that precious public
authorities can take to harness the latent sector resources are used to build community
and to create and embed
However, at Locality, we believe the tide power in their communities, and will come capacity and create maximum benefit to the
has begun to turn in town halls across the as no surprise to you. local economy. This is particularly crucial at a
trust across the sectors country. In the wake of the collapse of
Carillion and other instances of ‘scale fail’ Where a procurement process is required, time when local authorities’ financial futures
we operate in. there are alternative approaches which shift are increasingly dependent on the success
(bit.ly/KeepScale) – where big contracts
the balance away from competition. Alliance of their local economies, with the shift to
have failed to provide the outcomes or
contracting – where the commissioners and business rate retention.
Our diversity across faiths felt important. savings promised or ended in expensive
failure, we’re seeing a shifting attitude to risk providers are part of a shared risk and reward Locality recently published a study (bit.ly/
These are times of great change for all
and a changing public services landscape. contract – can help foster collaboration and KeepReport) showing how community
charities and their communities, whether
Lisa Kiew, join up services. Plymouth Council has organisations act as local economic
it is the impact of Brexit or increasingly More and more councils are now taking a
Head of Finance and Resources, pioneered this approach for complex needs multipliers by employing local people and
secularisation, demographic shifts or different approach. Instead of seeking to
Quakers in Britain support (bit.ly/KeepToolkit). Oldham using local suppliers. In Bristol, every £1
digital disruption. outsource their problems, they are looking Council’s innovation partnership for social generated by Locality member Southmead
Faith charities are well-placed to connect for solutions inside their own communities. prescribing (bit.ly/KeepOldham) has allowed Development Trust creates £2.55.
From demonstrating the utmost transparency, to the the personal to the social, and to create and They are building strong local partnerships for the co-design and iteration of a service that
with community organisations, sharing power Where next?
commitment to our beneficiaries, Lisa Kiew of Quakers embed trust across the sectors we operate
in, with our beneficiaries and with the general and harnessing their local strengths.
meets local needs rather than the service
As Nick Forbes, leader of Newcastle City
being designed and ‘fixed’ at the outset.
in Britain discusses commonalities between faith public, even at a time when there are voices Keep it Local Council recently put it (bit.ly/NickForbes):
charities, and shares plans for a brand new special questioning the role of faith as a charitable To build momentum and channel the ‘I’m absolutely proud and delighted that –
purpose. By being a diverse group, we along with many other councils around
interest group for CFG members. would bring a wide range of experience
collective power of these sparks across
the country – Newcastle is signing up
the country we have, in partnership with
July was another month in which there and perspectives to the table. Lloyds Bank Foundation for England and to the Keep it Local principles. This is
from across the faith spectrum at Friends
Local community
was much consideration of the public’s House in mid-July to discuss forming a Wales, launched a new Keep it Local about recognising the importance of the
expectations of charities. We had the report special interest group with CFG, I was struck Network (bit.ly/KeepNetwork) for councils voluntary and community sector in our
CFG is working with Quakers in Britain
of the SORP governance review panel, and
various statements and publications from the
by how we are held to account in similar ways to develop a new, faith-based special based around six Keep it Local Principles
(bit.ly/KeepPrinciples). These have
organisations are more area, understanding that the VCS can
reach communities which we just can’t.’
likely to solve underlying
for how we deliver our charitable purposes. interest group. We want to reach out to
Charity Commission. We heard repeatedly been co-designed with councillors, The movement is growing.
We shared experiences of passionate others before constituting the faith-based
issues upfront because
that it is not enough for a charity to deliver and faith-inspired charity group more commissioners, community leaders So, join us in making this case to your
member engagement in the details of how and policy experts, to help shape a new
its mission and serve its beneficiaries. We formally. If you would like to network with local politicians and officers. We have
of the way they work –
we operate, and being held to the highest approach to commissioning services and
can no longer just focus on doing good; your peers, hear from trendsetters within loads of advice on key arguments to
standards of transparency and openness. building long-term community capacity.
we need to do good in a good way.
services are holistic and
Members of the faiths contribute financially your area of interest, and discuss your make, who to engage and communication
Working for the Quakers, this hasn’t come as to their organisations and they want their experiences and challenges, please Through the Network we’re aiming to share strategies to employ. Or get in touch to have
a surprise, as Quakers believe in expressing
their faith in how they live. When I hosted a
money spent well. For our faith communities,
their charities form part of their identity; this
do get in touch either directly with
lisak@quaker.org.uk or contact
and spread best practice and champion
the good work of local authorities and
joined-up with other local a conversation about the situation in your
area, and we’ll see if we can help –
small group of fellow finance professionals is why they are passionate and proud of the dawn.mcnish@cfg.org.uk. communities. There are many practical service providers. policy@locality.org.uk.
12 13
GIFT AID FOCUS INVESTMENT FOCUS
The role of retail An important milestone came when we got
the Shadow Charity Tax Minister, Anneliese Who makes the have to take proper advice about the overall
disposition of the assets as well as about
Gift Aid in the important decisions
Dodds MP, to table a Parliamentary the varied sections of the portfolio that are
Question on the matter (bit.ly/GAQuestion). invested in different assets or with different
This led to further discussions between the managers. The trustees are responsible,
Charity Retail Association and officials. and need to understand what the overall
for your charity’s
risks in the investments as a whole and to
sector
take proper advice. Some think that if they
just leave the overall asset allocation as it is,
they cannot be blamed because they have
investments?
not made a decision. Unfortunately, there
is no such easy way out. Keeping the
Last year Gift Aid allocation the same is a decision, and one
that may prove to be wrong. Conditions do
reclaims accounted for change. Valuations change substantially.
5% of the charity retail The trustees do need to review things
regularly or commit them to managers
sector’s income. who have a reliable system of review
and risk-based investing.
The Budget
It might not have caught the national
Matt Kelcher, media’s attention, but section 3.16 of
Head of Public Affairs and Research,
Charity Retail Association
November’s Budget Red Book (bit.ly/
BudgetRed2018) contained an important
announcement for charity retailers. In the One of the problems
Ahead of speaking at the CFG Tax Conference in Birmingham case of very low claims, charities would
this September, Matt Kelcher from the Charity Retail
only have to write to donors at the end of of having several active
managers is keeping
a three-year period. This was a huge move
Association reviews some practical aspects of retail Gift Aid. towards what we had asked for. As Charity
The retail Gift Aid system is vital for our • Secondly, there are also reputational
Tax Group Vice Chairman Richard Bray said
at the time, “these new rules are therefore track of how your overall
members. Last year Gift Aid reclaims
accounted for 5% of the charity retail sector’s
risks to charities associated with
writing to donors about very small
a very welcome practical change and
we are grateful to HMRC for listening
portfolio is invested.
income. Therefore, we are always keen to net sale proceeds. to our concerns.”
work closely with government to ensure that It is not uncommon for charity shops to Those funds which invest an important part
The changes only apply to end of year in index trackers need to remember that in
the system is up-to-date and fit-for-purpose. receive messages from donors asking letters, and therefore only impact on
These conversations have resulted in the only them to stop the flow of mail. A medium- a growing and increasingly competitive
charities running their retail Gift Aid
assured guidance on retail Gift Aid available sized charity retailer operating in London market new issue exchange-traded funds
system on Method A or Method B.
(www.charityretail.org.uk/members/ provided us with the following example: may come in with lower costs than the older
gift-aid) and also a further improvement “We don’t need a letter informing us of Under the new system, if nothing is sold John Redwood, versions, so switching may be good idea
to the system which came into force on sales of items we’ve donated – we’d within a financial year, then no letter needs Chief Global Strategist, Charles just to reduce the costs of investing. A
the first day of this financial year. prefer every penny was used by the to be sent. If something is sold, but the total Stanley Wealth Managers portfolio of exchange-traded funds indexes
hospice.” Unfortunately, this was not a donation (i.e. the sales price) is less than your investments in each market or asset
Before April 2019 request the shop could legally comply with. £20, then the charity does also not need class, but there is no index solution to how
Before this point, shops operating on the
Additionally, donors are sometimes
to send a letter until the end of a three-year Who’s managing the investments in your organisation? much you should have in any given market
Standard Method of retail Gift Aid had to write period. After the end of a three-year period
to their donors every time they made a claim. concerned to see that their donation if any sale has been made then donors need
John Redwood of Charles Stanley Wealth Managers or asset. That still requires decisions.
Transactions in the charity retail sector tend
did not raise as much for the charity as to be written to as before. If no sales have explores the responsibilities and roles of investment One of the problems of having several
they anticipated, particularly if they have active managers is keeping track of how
to be for very small, with an average value of unrealistic expectations of the value of
been made over three years a letter does managers and trustees in charities. your overall portfolio is invested. The
£4.05 across 2018. Asking shops to send not have to be sent.
a personal item. In these cases, receiving Trustees need to understand the overall The most important question for the different managers might all go in the same
letters to donors after sales of such small a letter telling them that their item has only We published full details and a set of
risks in the investments as a whole and to manager of the fund as a whole is how direction in asset classes, increasing the
amount had two clear disadvantages. eventually raised a few pounds or pennies FAQs on our website (bit.ly/CRAbudget)
take proper advice. much money should they put into shares concentration of your fund and its risks.
• Firstly, there is an obvious financial can put them off donating in future. and have updated our official guidance
or bonds or properties or some other type Alternatively, they might go in different
cost to the shop, which eats away at to ensure everyone in the sector has the Larger charities often have a number of
Our solution of asset? In some cases, the trustees directions, entailing costs for you but little
information they need to take advantage. investment managers and advisers. They
their bottom line; money spent on The Gift Aid Small Donations Scheme themselves make this decision by deciding overall change in the underlying mix of the
We will always keep fighting to improve might go to one for bond management,
their cause. (www.gov.uk/claim-gift-aid/small- at a particular meeting to buy Fund A or fund. Either way it helps to have someone
a system our members rely upon. to another for equities and a third for
Charities have the option of making donations-scheme), used by many reduce the money with Manager B. These trying to keep some check of where the
contact through email, but many charities charities to fundraise through online property. They might buy into various
are usually the most important questions, complete portfolio is, and leading a
only have postal addresses for the majority platforms and other means, works around a actively-managed funds with fluctuating
exposures to financial assets. They might the ones that will have the biggest impact on trustee conversation on whether you
of their retail Gift Aid Donors. For example, de minimis limit of £20. This means that in Matt Kelcher will be at the CFG performance. Most good active managers have the right balance.
a hospice running 24 stores told us that Tax Conference in Birmingham buy some exchange-traded funds to have
circumstances where a donation raises less part of the portfolio in low-cost index of shares will still lose you money in an
out of a donor base of 41,000 they only on 26 September – book now at The value of investments can fall as
than £20, the charity in question does not trackers, so they have a core position in equity bear market. No amount of good
have 3,500 with email addresses. www.cfg.org.uk/TaxBirm. well as rise. Investors may get back
have to go through the full process of writing world shares or some other asset class. bond management can make up for the fact
Cumulatively, the cost of all this postage to the donor and confirming their status. And don’t forget to save the date for They may choose some good individual that advanced country bonds typically yield less than invested.
is very significant. One of our largest CFG’s Gift Aid Awareness Day this managers and some successful funds. very little and will go down in value if and Charles Stanley Wealth Managers is a
We therefore believed that there was clear when interest rates rise, short of selling out. trading name of Charles Stanley & Co.
members estimated that they spend October – it’s going to be even bigger They may think they can say they are
precedent for a £20 de minimis in the retail Limited, which is authorised and regulated
nearly £110,000 annually on postage and better! Put it in your diary for properly advised because they are using As a past trustee of funds, I am very
Gift Aid scheme, and set about to persuade by the Financial Conduct Authority.
for low value claims. Thursday 3 October. these experts to run parts of the money. conscious that the trustees as a whole
the government to introduce this change.
14 15You can also read
