It is alarmingly common for Boards to discover that they are acting ‘ultra vires’ or beyond their purpose and this could lose the organisation its charitable status and tax exemptions. • But we’re a charity The final point is rather a sad one: charities are the subject of more frauds than other organisations, although arguably perhaps they just report them more often. There are many ways that charities can and will be targeted and it is necessary to have robust procedures and controls in place to try and limit the opportunity and impact of an attack. You cannot assume that no one would be low enough to target a charity, they can be seen as easy targets and it is for the Board and Executive to prevent this. The charity sector does so much good for so many deserving and desperate causes and people. There is risk, and be clear on what those risks are, but what a reward when you see the outcomes delivered; but in order for charities to survive, they are dependant of those individuals who are dedicated in volunteering their valuable time to fill roles such as those of Trustee. Scrutton Bland have many years’ experience working with charities and not for profit organisations across the region to provide accountancy and audit, insurance and financial advice. Contact Tim at tim.oconnor@scruttonbland. co.uk or tel 01206 838406
For Board members familiarity is an easy trap to fall into. Trustees, by their very nature tend to be the honest, trustworthy and all round decent members of the community, so it would seem logical to surround themselves with likeminded, similar people. The danger with this approach is that trustees are human beings too, and it is only natural that people spend their time focussing on the parts of the organisation that interest them and inadvertently forget about all the other equally important aspects. A skills audit of the Board, whether formal or otherwise, can be a very effective way of highlighting areas where there may be a skills gap. This practice needs to link to the overall strategy of the charity as well as its charitable purpose as otherwise there can be a danger that individual agendas can come into play. • Mission creep When charities are formed they are legally obliged to state their purpose and this is agreed with the Charities Commission. Just because an activity is charitable in nature it does not mean that a charity can do it, unless it is one of its purposes. There must be no ambiguity between the Board and Executive in ensuring that activities carried out do not stray outside of the agreed purposes. This can be a particular problem when chasing grant funding to utilise capacity within the charity. The Board need to be clear on their purposes and expected outcomes; any new activities or sources of funding must be assessed to ensure that they meet these purposes and will deliver the necessary outcomes.
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