Governing your charity with purpose
Ben Wittenberg, Director of Development and Delivery at DSC, takes a closer look at our recent Governance App Report. In this article he discusses scores around organisational purpose and gives some tips in particular around improving performance on the question "We know what we'd do if the charity wasn't needed anymore or became unviable".
In October we produced a report drawing on the responses from over 1,000 governance reviews that had been carried out using DSC’s Governance App (a fantastic free tool designed for Boards to assess their performance against key elements of the Governance Code, and make having discussions about how and where to improve as easy as possible).
Click here to read the full report, and click here to check out the Governance App.
In this series of short blogs we’re digging a little deeper into the individual sections of the report, highlighting specific questions where trustees are scoring themselves particularly low, and giving some quick, practical and easy to implement tips and advice.
Most challenging areas
Organisational Purpose scored relatively high in the Governance App’s findings, with an average score of 8.2/10. However, some areas highlighted significant challenges:
- “We know what we’d do if the charity wasn’t needed anymore or became unviable” scored the lowest at 6.4.
- “We regularly evaluate the difference the charity is making” also lagged behind, reflecting uncertainties in impact measurement.
These findings suggest a lack of connection between some of the other governance areas or activities that boards felt they were performing well in. Many boards were scoring themselves highly on questions relating to reviewing their financial sustainability and on measuring their impact, but then low on knowing what they’d do if they became unviable.
Tips to improve performance:
- Develop a Contingency Plan
Draft an “exit or wind-down strategy” to address scenarios where the charity may no longer be needed or viable. Elements of this should already exist within risk and reserves policies and be informed by financial statement sand reporting.
Developing a plan could be simple or complex depending on the nature of the charity (think small, local and volunteer-led charity with no assets versus a large service delivery charity with multiple contracts, staff, buildings etc.), but even in the most complex organisation it needn’t be a colossal undertaking.
Knowing what being needed and being viable means for your organisation and knowing what the first step would be if you stopped being one or both of them may be enough for many boards.
- Regularly Assess Impact
Allocate resources for periodic impact assessments. Consider simple methods like beneficiary feedback or cost-benefit analyses. Beneficiary feedback not reaching the Board was another low scoring area within the report, but ensuring that trustees are able to hear direct from beneficiaries as well as from the senior team or CEO is critical in connecting governance to the impact the charity is having.
- Integrate stakeholders into your routine reporting and discussions
As a Board it’s sometimes easy to be a bit detached from the impact the work your charity is having. Simple things like incorporating testimonials or real-life stories into board reports and meetings are an easy way to bring the purpose to life.
It can also be really useful to find ways for the staff and/or volunteers to engage with the Board. At DSC the senior team attend all of the Board meetings, and we have staff on all of the sub-committees as well as a rolling programme of staff teams presenting their work, achievements and activities to the Board at meetings. This gives trustees a brilliant insight into the work the organisation is doing, the people who are doing it, and connects the staff with the trustees.
- Review Financial Sustainability in Context
From the report data, most boards are doing well in terms of the routine financial activities. Like tracking income and expenditure against budgets, reporting progress, fulfilling their audit and reporting requirements. But there are a few things that Boards can do to increase their financial awareness and understanding.
In terms of preparedness for the worst (or best) situation, integrate trend analyses and scenario planning into your finance reports and make it easy for trustees to see what this quarter, r this year’s performance looks like when you zoom out and look at the last three, five or ten years – and compared to future plans if you have them.
Externally, look at what others in your space are doing. Are competitors and partners growing? Shrinking? Investing for the future? What are your current and past funders doing? Are they increasing or reducing giving? Changing their priorities? What risks or opportunities could there be for you and your beneficiaries as a result? Most of the information you need for a cursory exploration is online and in their reports and accounts, so it’ needn’t be a huge exercise, but could give valuable insights into your own situation and planning.
Want to boost your governance? Join the thousands of trustees that we’ve helped:
- Carry out a free governance review using our Governance App – click here to find out how
- Get all of your trustees a copy of our bestselling book It’s a Battle on the Board – click here for details
- Speak to our In-House team about how we can facilitate Board discussions and away days – click here to get in touch
