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This is where we welcome those at the sharp end of charitable and socially responsible activities to step up onto the box and get their point of view across. It's an opportunity to raise awareness, talk about something relevant in the news or voice something close to their heart. This part of our website is not about accounting and finance, it is about the issues, achievements and raison d’etre of not for profit organisations of all shapes and sizes; the more varied, the better.
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LinkedIn Discussions
2nd July '10
>>> Posted by Frances Wilde, Director of Warner Wilde
I host the Linkedin group ‘charity finance and governance uk’. The group is regularly updated with discussions relevant to the not for profit sector.
Please visit Linkedin and join the group to benefit from this opportunity to exchange ideas and learn from others in the voluntary sector.
To visit the group, click here. Make sure you have your LinkedIn login details ready.
Responses to the Accounting Standards Board consultation on ‘The future of UK GAAP’
5th January '10
>>> Posted by Frances Wilde, Director of Warner Wilde
The process for the convergence between UK and International generally accepted accounting principles ‘GAAP’ is well under way, the consultation period which also includes the proposed treatment of charities is open until the end of January. My interest is in keeping it simple for smaller charities to promote consistency and quality across the sector. This is my response to the consultation:
Q10 Do you agree with the Board’s current views on the future role of the SORPs? If not, why not?
No. I think it is vitally important to consistency and quality of reporting amongst charities to retain a stand-alone document. Accounts for smaller charities are often prepared by non-specialist accountants or even non accountants and as there is no requirement for a qualified accountant as independent examiner for charities with incoming resources up to £250,000 I believe the only sensible way to promote consistency and quality is to have one point of reference. Even with the current system I regularly see charity accounts which are not compliant, I believe this will be more prevalent if the preparer has to access more than one source to identify appropriate accounting treatments.
Q11 Do you agree with the Board’s proposal to develop a public benefit standard as part of its plans for the future of UK GAAP? If not, how should (converged) UK GAAP address public benefit issues?
In principal yes, but my concern is that in bringing together higher education authorities, charities and registered social landlords that one standard would struggle to address the needs of each of these disparate entities without being extremely lengthy or needing substantial additional guidance. As mentioned in my answer to Q10, I believe that it is important for charities to have a one-stop shop standard.
Q12 If you do agree with the proposal to develop a public benefit entity standard, should the standard cover all the requirements for preparing true and fair view accounts or should it cover only those issues where IFRS of the IFRS for SMEs needs to be supplemented for the public benefit entity sector?
It should cover all requirements. Aside from the point already raised concerning non accountants often drafting and examining smaller charity accounts, many charities use smaller accountants whose experience is likely to be focused less on IFRS. It is conceivable that many smaller practices will only service micro-entities under 1million euros turnover retaining UK GAAP and have a poor understanding of the differences between that and IFRS. Although the obligation to understand both will clearly exist, pragmatically, the quality of charity accounts will be much better if all the requirements are in one place. Many charities will simply go to the lowest cost provider and many general practitioner accountants will only have a handful of such specialised clients.
Q13 Do you agree the issues listed in the above table are distinctive for the public benefit entity sector and should therefore be covered in a public benefit entity standard? What other issues might the proposed standard include?
Yes I believe these issues are distinctive to non profit entities. Other issues to be addressed might include the disclosure of reliance on donated goods or services, confirmation that conditions attached to funding have been met, a different approach to going concern where charities are often funded on a rolling basis with relatively low level reserves and disclosure of informal collaborative working.
Q14 the Board accepts there may be a continuing need for guidance to supplement a public benefit entity standard in sectors such as charities, housing and education. Where this is the case, do you think the Board should provide a Statement confirming the guidance is consistent with UK GAAP, including the public benefit entity standard?
If this were the case rather than a dedicated SORP then I think it is important for the Board to continue to ensure consistency and confirm that it has done so.
Reflections on Performance Measurement
10th December '09
>>> Posted by Charles Jardine FCCA MBA DChA
The voluntary sector is sometimes recognised as the custodian of our dreams, even a reflection of our individual and national moral conscience. People who work in the sector usually identify themselves passionately with their cause, and consistently work with greater commitment, less resources and for lower rewards than the public or private sectors. The term ‘charity’ implies a form of giving love, and is akin to ‘amateur’, or one who does something for the love of it.
Of course those of us involved in charities know that they are no longer the domain of amateurs, whose passion and hard work could once substitute (at least partly) for any skills shortages. Indeed, those charities which seek to survive and grow by earning income from commercial activities, and so are actually social enterprises, need to have additional skill sets to deal successfully with the other sectors. Social enterprises are more common than one might imagine, and are typically highly developmental organisations that deliver a range of public services (e.g. the RNID and RNIB). They are often funded by numerous and diverse income streams, such as their own sales, Government grants and loans, business sponsorship and private donations.
The 3rd Sector is seen by many funders as overcrowded (over 168,500 UK charities), highly duplicative, cluttered with inefficient small scale operations, sometimes unreliable or uneconomic, and worst of all as too confusing to invest in. In the UK the Government is the primary investor in charities, but even with its resources it struggles to identify where to target funding. So what can help to influence funding decisions in the future? The smart money is on the widespread use of performance measures to compare returns (social outcomes and impacts) on their investment.
Watch this space!
Happy Christmas?
15th November '09
>>> Posted by Frances Wilde, Director of Warner Wilde
The team at Warner Wilde can have fun on a budget and say Merry Christmas 'electronically'. With that in mind we want to extend goodwill to those for whom Christmas is a difficult time. We have donated the money we would have spent on Christmas cards and festivities to a couple of small local charities who have activities focused on those who are easily overlooked at this time of year.
http://www.newlifechurch.org.uk/ - Providing Christmas Dinner to people who would otherwise be alone on Christmas Day.
http://www.sendfamilylink.org.uk/ - Providing support and advice for women in HMP Send with children, and a fun play experience for children visiting their mums.
We have also recently supported the Family Rights Group through a fundraising event in London.
http://www.frg.org.uk/ - Championing the needs of children and families involved with social services, lobbying for changes to family law, supporting extended family members caring for children who can’t live with their parents and providing advice and advocacy.
Is Bigger Always Better?
18th September '09
>>> Posted by Frances Wilde, Director of Warner Wilde
I recently had the privilege of attending the two day ‘Researching the Voluntary Sector’ conference run jointly by the VSSN and NCVO. Having never been involved with the research community it was hugely reassuring to see the breadth of ages, backgrounds and interests bringing so many dedicated people together.
Academics rubbed shoulders with practitioners and there was also a sizeable overseas contingent. It was enormously inspirational and reassuring to have met so many people with a passion for understanding what makes the voluntary sector so important in our society.
I was particularly interested in ongoing research to better understand the quality and quantity of information being requested by funders and provided by recipient charities. In particular the point that there is currently no standard either for grant applications or for reporting results by charities to funders. An array of different forms is time consuming and often falls to the responsibility of the CEO in smaller charities leaving them less time for strategic thinking, management and fundraising. There is pressure both from the economic climate and public funding available to charities encouraging them to merge.
I believe a smaller charity is often better placed to react to its environment and more likely to engender volunteering in its local community than a larger homogenous entity. In the interests of diversity and best fit for purpose, I hope that research leads funders to start the much needed standardisation process. Bigger is not always better.
Education
2nd August '09
>>> Posted by Liz Cook, Deputy Head of Easthampstead Park School
In 2000 the United Nations General Assembly, as part of its Millennium Development Goals, set the world two ambitious educational targets. The first was that all children of school age should have completed primary education by 2015 and the second, that in pursuing that goal, full equality of access to education for girls and boys should be achieved by 2005. Developed countries have long been providing educational aid for developing countries but this money, delivered without a clear strategy or vision for how change will be sustained, has only been able to achieve so much.
Today, after half a century of such aid, well over 100 million children have never seen the inside of a classroom and over 200 million fail to complete even the first years of primary school. Why does this matter? Every child should be able to read and write and have the skills of numeracy, comprehension and reasoning. In addition children should be confident, curious, independent, resourceful, patient and understanding of themselves and others; it is only when these competencies and qualities are in place that individuals are enabled to take full advantage of all the opportunities for self-improvement that life has to offer.
Education is the key to making the world a more equitable place and the start of the journey to solving some of the planets most challenging problems. If we fail to educate this and the next generation we are in danger of leaving our planet exposed to harm and the talents of our young people undiscovered and unfulfilled. For those people working tirelessly within the charity section to support an agenda for change; continue to make it matter safe in the knowledge it can only benefit our future
Social Networking?
1st July '09
>>> Posted by Frances Wilde, Director of Warner Wilde
In June the NCVO and Office of the Third Sector launched a really useful website - http://www.fundingcentral.org.uk/. This collates thousands of sources of income for charities and other voluntary organisations to search through according to their objectives, location etc.. I wholeheartedly welcome this as a practical tool which will save those who work, particularly in smaller charities, a great deal of time and help them access funds they would otherwise not have known were there.
It does concern me though that the organisations that most need the funds are, in all probability, not aware of either this website or other useful information sources. It’s an interesting problem in an age when social networking sites like Twitter are becoming an increasingly important way for knowledge to disseminate. It’s all well and good if you are comfortable with the technology and have time to develop links, but I think we are at risk of leaving a whole sector of dedicated (and very capable) charity Trustees out of the loop.
And the answer is? Well, technology moves inexorably forwards and I think it remains the duty of those in touch to mention it to those who might not be. CEO’s have a role to play in pointing Trustees towards the available media. 'Train to Gain' grants are an excellent way to finance skills including IT literacy. Finally, there is the grape-vine. If you know someone who is a Trustee or involved in charity management pass the word on.
Collaborations between voluntary organisations are expected to rise but it would be a shame if this was dominated by those with more aggressive fund-raising strategies at the expense of the myriad smaller organisations that keep so many parts of society running smoothly.
