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What Can Trustees Do to Promote a Charity’s Financial Stability?

What Can Trustees Do to Promote a Charity’s Financial Stability?

Financial management advice for trustees

The Insolvency Service has confirmed that it will bring proceedings against all eight former directors of the collapsed charity Kids Company, and Camila Batmanghelidjh who they allege acted as a de-facto director.

If successful it would mean the individuals involved would have to relinquish any directorships they hold, and be disqualified from running or controlling companies for periods of between two-and-a-half and six years. It is a stark warning to all trustees of charities, some of whom could in a worst case scenario, suffer devastating professional consequences as a result of their voluntary activities.

Indeed Jane Hobson the Head of Guidance and Practice at the Charity Commission, emphasised in a recent article for the Guardian, the importance of trustees having a handle on their charity’s financial management:


With this in mind, the Charity Commission has recently published useful guidance to assist trustees in identifying, and reviewing at regular intervals key issues in relation to the financial stability of their charity. They suggest that charity trustees ask themselves the following 15 questions:

  1. What effect is the current economic climate having on our charity and its activities?
  2. Are we financially strong enough to continue to provide services for our beneficiaries?
  3. Do we know what impact the social and/or economic climate is having on our donors and support for our charity?
  4. What is our policy on reserves?
  5. Are we satisfied with our banking arrangements and our current and future investment policy?
  6. Have we reviewed our contractual commitments?
  7. Have we reviewed any contracts to deliver public services?
  8. If we have a pension scheme, have we reviewed it recently?
  9. How can we make best use of any permanent endowment investments we hold?
  10. Are we an effective trustee body?
  11. Do we have adequate safeguards in place to prevent fraud?
  12. Are we making the best use of the financial benefits we have as a charity?
  13. Are we making the best use of our staff and volunteers?
  14. Have we considered collaborating with other charities?
  15. Are we making the best use we can of our property?

Further guidance is available on the Charity Commission website:


While the Charity Commission’s list may appear daunting at first, it can prove an invaluable exercise for trustees in identifying financial issues which need attention. As the Kids Company saga continues, it is clear that this is something which charity trustees can no longer shy away from.

Author: Aideen McGarry

Financial guidance for trustees

If you would like to discuss any issues raised in this article further, please contact our charity law solicitors on 01895 207862 or email charities@ibblaw.co.uk.