Taking on a trustee role is a significant responsibility and involves overseeing a number of important obligations to ensure a charity or organisation is achieving what it was set up to do. It can be an initially daunting position and you may feel uncertain about exactly what is required of you.
Trustees use their skills to support charities, often making a positive difference to the wider society – I have compiled some pointers around the main duties of a trustee to enable you to get the most out of this valuable role.
Fulfilling its purpose
As a trustee you need to make sure the charity has a clear purpose and its activities are designed to carry out this purpose. Spend time checking that the charity complies with its governing document and the appropriate charity law requirements.
Think about the procedures you have in place to ensure assets are only used to support the main objectives of the charity and no risks are being taken either with its assets or reputation.
The financial position
All trustees share responsibility for the finances of a charity. As a trustee, you need to know how much money is in the bank and what the cashflow position is.
Be financially aware and create a shared understanding among the trustees as to how much cashflow there is and how long it will last for.
What proportion of money is available to utilise now and how much is restricted funds? It might be the case that you have a healthy amount of cash in the bank but a significant amount has already been allocated to existing projects.
Question where the money is coming from.
- Is it from fundraising? Perhaps this mainly consists of seasonal sporting events taking place in the summer. You might have a spike in cashflow during June to August and reduced income in the winter months.
- Is the organisation paid to provide services? Consider how much these cost and the ensuing income.
- Is a shortfall in cash bolstered by donations and grants? Take a look at how big the loss is.
Consider your outgoings
Plan for any large financial outlays – this might be big events in the charity’s calendar, rent on premises, quarterly payments or payroll commitments.
Keep looking to the future to make sure your cashflow is enough to cover all expenses.
Regularly review and assess the risks faced to safeguard funds and assets.
Take into account possible
- Expiry of funding from other bodies;
- Drop in fundraising;
- Fluctuations in investments;
- Termination of contracts; or
- An increase in demand for services.
Try to address risk in a structured way by establishing a risk management policy. Having a rigorous process helps to ensure all elements of risk are covered, including financial, governance, operational and reputational. Find out more about charities and risk management here.
Create clarity around what the charity would like to achieve, both in the short and long term.
This is helpful when liaising with your accountant around future expenditure – making sure all parties know where the money is coming from for any sizeable projects on the horizon.
Professional guidance is available to help you undertake your role as a trustee, particularly when it comes to the accounting and statutory reporting side of things. For further advice on this topic, get in touch with your usual M+A Partners contact or email firstname.lastname@example.org