Treasurers and reserves

Just a brief posting today, methinks.

Treasurers - who'd be one? Especially in organisations without admin or finance staff like our local faith communities. I had the role for three years and got myself into all sorts of knots - the end of the financial year was an interesting time as it kind of went like this ... £1,500 too much, then £200 too little, then £80 too much and then something like £4.21 too little - eventually I would get the discrepancy between bank figures and cashbook to zero but it hurt to get there. Now I am a woman who loves figures but I don't love accountancy and book-keeping.

Treasurers are often accused of being mean because many don't appear to like spending money. However the buck stops with them if there were ever an audit of how money had been spent. Treasurers should have an overview in their heads as to how the organisation is doing. What is being spent, what is coming in, what is on the horizon (both expenditure and incoming) and what the community would dearly love to do?

The Charity Commission is quite clear that money in should equal money out. We are after all charities and money should be used for our charitable purposes - having money sitting in a bank is not a charitable purpose. But charities can carry reserves and capital funds. Reserves are to keep the charity going should income reduce (as with a stock market downturn) or should expenditure increase (if the water charging policy is implemented) and for planned maintenance and as a buffer for say emergency repairs. A charity may also save money for a large project say retiling a roof or making the building accessible.

However if you carry any kind of extra money other than to cover usual expenses then you must have a reserves policy. This must say how much you have or intend to have and for what purposes. It is a useful exercise to write a reserves policy as it enshrines to some extent your community's thinking about risk, your knowledge of future financial issues and your aspirations for the future. I will post an example of a reserves policy within the week.

Now I must away to drive to Yorkshire and trust it isn't raining there as it is here.

Trustees - officer roles

The Charity Commission only dictates that charities have a chair and a treasurer. Company law used to require an incorporated charity to have a Company Secretary but that changed in 2008. You may of course have a secretary and a vice chair and any other number of named officers - vice or deputy -treasurer, minute secretary, membership secretary, lettings secretary and welfare secretary and suchlike.

Whether these people are formally appointed (either elected or selected) as trustees or not it does not really matter - if you act like a trustee i.e. you are involved in the strategic decision making (not just the discussions) then you will be treated as a trustee by the Charity Commission. You can't have the power without the responsibility - whatever your governing document says!

The chair and the treasurer are both key roles. The treasurer's is easier to describe. In organisations with a finance director then the role is often called the honorary treasurer and this person monitors the finance director's work and therefore the financial stability of the organisation ensuring that all procedures are followed and that no only is the organisation viable now but will be for some years to come. NCVO say that these are the overall roles of a treasurer

• Maintain an overview of the organisation's affairs
• Ensuring its financial viability
• Ensuring that proper financial records and procedures are maintained.

Clearly in smaller organisations - probably most of our communities, treasurers do much more hands on work with the money often collecting money, banking it, preparing budgets and accounts, and being the main contact for the bank.

I believe that the chair's role is pivotal to the success of any charity. However I have known charities with good staff and a poor chair who have done well. Whatever your view it is best to get this agreed between all the trustees. NCVO says this of the chair's role.

The chair is a trustee with a specific role on the board. The chair is elected or appointed to this role as set out in the charity’s governing document.

The role of the chair is to chair meetings of the trustee board.

In addition, some chairs take on a number of additional roles. The chair can only take on these additional roles if they have been authorised to do so. This authorisation might be set out in the governing document or related procedure, or agreed by the other trustees in a role description or some other document.

Additional roles of the chair sometimes include:

• Supporting and supervising the head of staff or chief executive and acting as a channel of communication between board and staff
• Acting as a figurehead for the charity (for example, representing it at functions, meetings or in the press).
• Leading on the development of the board and ensuring its decisions are implemented.
• Taking urgent action (but not decision making unless authorised) between board meetings when it isn’t possible or practical to hold a meeting.

The roles above are not exclusively roles of the chair. For example, in some charities the development of the board might be led by another trustee; in others, the charity’s press spokesperson might be a member of staff.

In my experience it is through the chair that the board communicates with the chief officer/staff. If supervision is provided to staff then it is usual for the chair to both supervise the chief officer and to give line-management support. If there are staff then the relationship between the senior staff and the chair can make (or break) an organisation.

Here is a good discussion document from the Scottish CVO about the relationship between the chair and the chief officer.

When the relationship is between minister and trustees (who are also the ministered to) there are different considerations which I admit I understand from a personal point of view i.e. how we do it in Newcastle-under-Lyme but I am not sure that this can be systematised. So I will have a long hard think about this.

The Nonprofit Social Media Decision Guide

This guide which covers things like Twitter,Facebook and blogging can be downloaded for free from here. You will need to sign up with your name and contatct email address.

Resources

I am setting up a Google site to hold resources about governance and signposting to good resources. I hope to have this done in a week. I have started but have been busy so only got half way there.