How to Find Financial Expertise for Your Charity

Most people on charity boards would agree that it is useful to have someone with financial expertise also on the board, so that they can deal with the ‘finance stuff’. However, charities often struggle to recruit people with any financial know-how and charities can survive without this skill set, so does it really matter? In short, yes –  but let me explain why.

It saves money

Charities operate in a highly regulated environment, with very complex tax and accounting rules; having someone on the board who can help you navigate these will help avoid any accidental non-compliance, or unforeseen tax charges, which can save a lot of money.

Individuals with financial expertise will also be well placed to assist with the development of strategic aims of the charity, especially in relation to resources, as well as ensuring the effectiveness and robustness of the charity’s internal policies and procedures. Smaller charities in particular would benefit from this expertise as, often, they are too small to support a discrete finance function within the organisation.

In these smaller organisations the day-to-day bookkeeping is often be undertaken by an office administrator with little to no finance knowledge or training. In these circumstances, it would be especially important to plug this knowledge gap through financial expertise on the board. Ultimately the board is responsible for the charity’s finances, and it will always benefit the charity if there is someone on the board who will be able to identify potential financial risks, and ways of mitigating these risks.

Add financial expertise to your board

So, how do you find financial expertise for your charity board? A good place to start is to increase the financial literacy of the current board. Now, I don’t mean the board needs to start taking accountancy exams and become financial experts, but there are lots of excellent training sessions run throughout the year run by professional organisations: and most of these training sessions are free.

I would encourage all board members to learn more about finance matters generally. Not only will it increase the financial expertise of the board, but it will also ensure that board members are more able (and confident) to understand, scrutinise and question the charity financials, which makes for better governance and better decision making.

How to find an expert

If you want someone who is professionally qualified on your board, there are a number of options. You can ask your contacts and see if they know anyone. Professional accountancy bodies such as ICAS will have web pages dedicated for their members to find volunteering opportunities with charities, and it may be worthwhile contacting these organisations to get your job advert posted. And don’t forget your own accountants or independent examiners. They will be able to provide advice on charity matters, and they will also be able to use their networks to recommend someone outside your usual channels.

Who’d be a charity trustee?

Rory Kennedy, our Rural Estates Partner, has been a charity trustee for three different charities therefore has a wealth of charity experience, and has worked with plenty more. Here he offers his thoughts on the benefits – and drawbacks – of being a trustee.

I’ve had various roles (including trustee, chair, vice chair, and member of audit committee) of three different not-for-profit organisations over the past decade. I’ve also worked with plenty more in my professional capacity, from small local charities through to big national organisations. Each of these has given me a good insight into the benefits and drawbacks of being a trustee.


The pros of being a charity trustee

Personal development: Charitable work is very rewarding, and you’ll find that you have far more influence on strategy than in your day job. This can develop skills and experience that cross-pollinates and will help you develop in your career role (treasury, marketing, HR, legal issues etc). If you perform well on boards you are also likely to be working with high achievers who have influence and can be great people to learn from.

Motivation: Helping an organisation is personally fulfilling, and there are plenty of charities that need and value help. Change can be extremely painful, incremental and involves a lot of committee work and politicking to get anywhere, so I think it helps to have an emotional tie or clear career goal out of the trusteeship. Without this motivation you might run out of steam, and you could be taking up a board slot for someone else who might be better able to roll up their sleeves and get things done.

Board experience: Trusteeship offers great experience and a boost to your CV. The experience is wide-ranging and involves senior-level responsibility, so definitely offers good skills and learning that will challenge your skillsets. Voluntary positions can be good preparation for senior roles and other Board positions which may need leadership experience.


The cons – or what to look out for

Emotions: In the professional sphere, it’s very easy to understand people’s motivations – career advancement and paying the mortgage! It makes dealing with colleagues and staff fairly transparent. In the not-for-profit world, there are far more complex motivations at play – people can be passionate, but this passion can bring complications that are often negative or irrational (ego, control, etc). This can also apply to charity staff who are in this sector because they care, and it motivates them; charities rely heavily on staff goodwill. Any new trustee should keep in mind that charity professionals are often highly skilled in their field. Dealing with people requires a balance of emotional intelligence and professional scepticism.

Time: Being a trustee can be very time-consuming and decision-making can be slower than the private sector, requiring a consensual committee approach. The more dynamic businessperson or professional may find this frustrating and something of a cultural clash. Some of my roles have been the equivalent of a day a week, which is a lot on top of a demanding professional role.

Risk: Particularly relevant for me as a Chartered Accountant. A lot of charities aren’t best-practice in financial operations and seek a CA for the Board to guide. Beware of what you are getting involved with and do your due diligence before being flattered into the role. Being a named trustee of a failed charity can harm your professional reputation.


In summary

Trusteeship can be challenging, but if you do a good job of it then it’s very rewarding both personally and professionally. You’re there to help and that should be mutual: you’ll get out as much as you put in. Just be careful, don’t freeload, and make sure you pick the right charity for you.