How effective is your charity? 7 questions to ask
To celebrate this year’s Trustee Week, The Foundation for Social Improvement (FSI) have released The Essential Trustee series of short films to support best practice in Governance.
In this blog, Janine Edwards, Head of Consultancy & Development at the FSI discusses conducting an organisational strengths review and its importance for charity Trustees.
One of the strategic responsibilities of Trustees is to ensure that your charity is carrying out its charitable purposes for the public benefit. Part of this responsibility is to regularly review your charity’s effectiveness and what you are achieving, and plan for the future. This is especially important in such turbulent times, where small charities in particular are seeing an ever increasing demand for services coupled with static or reducing income (Small Charity Index, June-August 2017)
At the FSI, we use our unique Organisational Resilience and Sustainability diagnostic to help clients identify key organisational strengths and areas for development, covering seven key areas: Governance, Staff Leadership, Finances and Income, Activities and Impact, Staff/Volunteer Resources, Marketing and Administrative Systems. This has helped hundreds of charities identify priorities to strengthen and develop in order to deliver more effective and sustainable projects.
We’ve used these key areas covered to identify seven questions charity Trustees and CEOs can ask in order to review how effective their charity is:
- How good is our Governance?
The Board of Trustees has the ultimate legal responsibility for the charity: safeguarding the mission and ensuring long-term sustainability. Trustees should be reviewing their own effectiveness (individually and as a collective) and asking whether they are meeting their key duties and responsibilities as set out by the Charity Commission.
- Do we have effective staff leadership?
The most senior staff member (often the CEO or Director) has a crucial role, providing the link between the Trustee Board and the operations of the charity. They will oversee operations, manage staff and financial resources, and take day-to-day decisions, whilst developing and maintaining key external strategic relationships.
The relationship between the charity Trustees and the senior staff member is a crucial one and it is important that a culture of mutual respect and support is fostered. A range of factors can impact on the relationship between Trustees and the CEO including whether or not there is clarity on roles and responsibilities, awareness of the crucial difference between governance and operations, and the relationship between the CEO and Chair of Trustees.
- Are we satisfied that our activities are the best way of meeting an identified need, and as a charity are we monitoring, measuring and managing our impact?
Trustees, with input and support from the staff team, need to regularly review services and programmes that are delivered to ensure that it continues to meet an identified need and deliver an impact. This starts with an effective impact framework such as a Theory of Change and the tools to measure, monitor and communicate impact. However, impact management takes this a step further, helping staff and trustees to make decisions about how to improve services and where best to invest resources to deliver the best possible outcomes.
- How healthy are our finances and do we have effective financial policies and procedures in place?
Indicators of poor financial health might include low or no reserves, over-reliance on one source of funding or a high level of restricted income. It is important to consider how you can diversify your income and develop a mixed income economy based on those sources of income that will deliver financial resilience and long-term sustainability. It’s also important that effective financial policies and procedures are in place and followed to reduce the risk of fraud – these may need reviewing and updating to reflect your operating environment.
- Are we making the best use of our staff and volunteer resources?
It’s important that you have the right mix of skills and experience to be as effective as possible. Trustees should ensure that they are aware of key HR and employment law requirements. With resources so squeezed in the small charity sector, it’s vital that all charities are proactive in recruiting potential volunteers and ensuring that volunteers are supported and managed well. Part of this should be considering opportunities for partnership and collaboration, which can enable you to deliver greater impact with the same resources.
- How well are we marketing ourselves – are we communicating with the right people, in the right way?
Marketing can seem a bit of a luxury in difficult times, however it doesn’t have to be expensive or time consuming. Taking some time to identify key audiences, your purpose for communicating with them, the messages you want to share and the best channels to reach them can help focus your marketing activity.
- Are our administrative systems fit for purpose?
Good administrative systems support effective financial management, learning and evaluation, and relationship management. It’s useful to identify where valuable staff and volunteer time is being sucked up with routine administration, and whether updating the systems you use could reduce the burden, enabling even more time to be spent delivering your key activities and outcomes. In some cases this may involve an initial cost so it will be important to weigh up any costs against any potential savings.
In addition to the new Essential Trustee series, at the FSI we also provide governance training across the country to charities with a turnover up to £1.5 million. We hope to see you at an event soon.
Janine Edwards is the Head of Learning & Business Development at the FSI.