Good Governance: a Code for the Voluntary and Community sector

'Good Governance: a Code for the Voluntary and Community sector' has been published, setting out best practice for governing a voluntary organisation. It builds on the original version from 2005, and should be clearer with less jargon. The Code Steering Group is now working on a version for small, unstaffed organisations, due spring 2011, plus a new supporting website.

The summary and full version may be found here for downloading.

Managing money

Apologies if I am teaching 'granny to suck eggs' but it is important to ask how boards manage their organisation's money. The term manage implies an active approach rather than monitoring which is reviewing what has gone on. My experience is that many organisations monitor their finances rather than manage them. Managing actively does not mean not spending money but it does mean understanding what money is being spent, when and on what and similarly with income - what is coming in, when and from where.

It is not so important in times of low interest rates but one of the things to manage is how much money is needed in the current account and how much can stay in an interest-bearing account. To do this you need to know when bills come in - many of us spread bills through the use of direct debits - this often gets us a better deal and helps us to spread spend - it also means that it is paid automatically from our banks. Which means that it is vital that bank accounts are reconciled with cash-books - at least quarterly or as often as bank statements are received.

Patterns of expenditure are useful to observe - the use of Excel or other spreadsheet software helps to plot spend over a year and then to compare year on year. You can then start to make links - for example if you rent out your building, do your utility costs go up the more you rent out the building. Can you therefore work out the additional cost of utilities for renting out the building and build that into lettings' charges? How vulnerable is your organisation to stock market fluctuations and do you need to build some contingency into your reserves for this? Are there times of the year when giving to the collection is less - do you need to find additional income at this time of year e.g. by having a stall at a car-boot sale or running a raffle?

Understanding your finances will help you to feel more secure - reporting this in simple terms to community members will provide transparency and help people to feel involved. It may also provoke some to offer to help out with fund-raising or money management - for example finding a better deal for your utilities or insurances. The more people are involved with finances the more likely they are to feel a responsibility for them which makes the treasurer's job a lot easier.