The 2019 Trustee Charity Finance Competency Survey produced by MHA MacIntyre Hudson and the Charity Finance Group starts by reminding us that the 2017 Charity Commission research on trusteeship Taken on Trust demonstrated that 93% of charity Trustees “regard their role as important or very important to them”. The report points out that “most [Trustees] would be truly shocked if they understood their performance is holding back their charities’ impact on beneficiaries.”

Findings indicated by the respondents show that about 60% of their Trustees had the necessary financial skills or knowledge, or that they had a good enough understanding of the charity’s financial governance to undertake their duties well.

This means that 40% of Trustees, not far off half, aren’t confident about their charity’s finances. This doesn’t sit well with the Commission’s core duties for trustees set out in its guidance document The Essential Trustee. The report doesn’t attempt to suggest why this might be, although training and support is a welcome suggestion that will always help at the margins.

There are probably more fundamental problems including the increasing complexity of charity and length of accounts including gems such as pension deficits, accruals and contingent liabilities, all of which impact at a relatively low turnover of £250,000, as opposed to much simpler cash accounting.

 MHA’s welcome report should add grist to the Charity Commission’s review of how the SORP is governed and to what end if it is to help close the gap between what trustees need to understand and what is reasonable to expect them to understand.

Categories: Governance
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