Top five books for understanding charity finances

Charity finances can be complicated when you don’t work in this area day-to-day. But for chief executives, CEOs, and other senior leaders, finances are an important topic to get your ahead around and understand.

 

Finances are the lifeblood of every charity. If finances aren’t managed effectively, this can be detrimental to a charity – and the people who use its services.

 

Understanding your charity’s finances will help you to understand if it has enough funds for what it is planning and look at ways to improve the organisation’s finances.

 

If you understand your charity’s finances, you will be able to spot any problems early and manage them. Or know that funding your charity relies on is about to stop or be reduced. This will help you to think about the effect this will have on the organisation.

 

For anyone who needs to understand their charity’s finances, this list of books and resources is a good starting point. Reading about charity finances can help to increase your knowledge and build confidence in this area.

 

 

Understanding the numbers

 

Written by the chief executive of the Charity Finance Group, Caron Bradshaw, and published by the Directory of Social Change, this book explains the processes and systems involved in charity finance. It’s a Nightmare with the numbers covers: what finance is about, risk management, investments and reserves. The book is aimed at CEOs, senior executives, trustees, and non-finance staff.

 

The Directory of Social Change has published other books on charity finances, including: Investing for Charities and The Complete Charity VAT Handbook.

 

 

Finances for treasurers

 

If you’ve recently joined a board of trustees and taken on a treasurer role, The charity treasurer’s handbook is worth picking up. The book covers charity accounting across the four nations of the UK. Even if you don’t have a background in charity finance, the book provides the information you need to get started in a treasurer role.

 

Topics include:

• Current legal and accountancy practice for charities
• Annual reporting and charity accounts, including compliance with charities SORP
• Corporation tax and VAT for charities
• How to effectively plan and manage finances

This edition of the book was published in 2023 and written by Elaine Alsop, a chartered accountant with 25 years of experience, and Gareth G. Morgan who is now retired and previously did charity accounting.

 

 

Charity finances for 2024

 

Published by Civil Society Media, the Charity Finance Yearbook 2024 covers updates, advice, and trends on accounting and audit, VAT and taxation, and investment strategy.

 

Civil Society Media also publishes other publications for the charity sector. This includes the SORP compliance checklist 2024.

 

 

Financial management

 

A key part of financial management is budgeting. Being able to budget will help charities to plan for the future – from deciding on project costs to managing an organisation.

 

The NCVO has a section on its website all about financial management. It covers guidance, techniques, and tools for managing a charity’s finances. This includes information on writing a financial strategy, writing a budget, and who to involve in budget management.

 

There’s also a template spreadsheet that calculates your charity’s income percentages when you input your current funding and future targets.

 

As well as strategy and planning, there’s guidance around banking, external reporting, and legal obligations and information about how to work through financial difficulties.

 

 

Finances for small charities

 

The Association of Chairs published a guide to financial leadership in small charities in November 2024. It’s aimed at chairs of charities who have a duty to lead trustee boards and make sure the charity is practicing good financial governance.

 

The guide invites charity chairs to look at five questions about financial governance and assess their progress:

• How can I support trustees with their financial duties?
• What board arrangements will support our financial governance?
• Do we have a clear financial plan?
• Do we have the financial information that we need?
• Are key finance relationships working well?

As well as this list of books and resources, there are other sources of information about charity finance available. These include the Charity Commission, the Charity Finance Group and the Scottish Charity Regulator.

 

Read our top books and resources for charity trustees. Also, see our top book lists for charity leaders, communications professionals and fundraisers.