This free digital resource from the Organisational Financial Literacy project can help charities to build a financially sustainable future
In the wake of the COVID-19 pandemic, every part of charity work has been transformed, as organisations have moved towards remote working, digital fundraising and online service delivery.
But this digital revolution has not extended to finance. Many charities have neglected finance management in favour of other priorities.
A Charity Finance Directors’ Group study found that while more than half of charities reported on output and outcome, broader impact reporting is far less common. This can have severe knock-on consequences for charities when it comes to securing funding. It also means that these charities are making uninformed and irresponsible decisions.
A new report investigating the level of Organisational Financial Literacy in the non-profit sector has recently been published as part of the Organisational Financial Literacy Project –a collaboration between Charity Digital and Sage Foundation, in consultation with Solid Base Non-Profit Support.
The report examines the current state of Organisational Financial Literacy in the UK charity sector. It examines the root causes and proposes solutions.
It supports the conclusions of earlier reports, such as the Charity Finance Director’s group study, as it finds that 53% of non-trained finance staff were not proficient enough in their role to be able to fulfil the finance function effectively and produce sufficient reportage for sustainable planning and responsible financial decision-making.
This is not just a skills shortage – it is a skills crisis.
In a post-pandemic world, Charities will face additional challenges. The key challenge will be balancing increased demand for services with a downturn in funding. Improved finance management can help charities to do just this.
By providing transparency, and showing funders how money is spent (and that it is used effectively) charities will be able to provide accountability to their stakeholders. This will make them a more attractive prospect for potential funders.
Download the Organisational Financial literacy report