Business advisors back think tank report 21/05/09
Beever and Struthers, the charity accountants and business advisors, has backed a think tank report calling on the Government to provide greater support for charities.

New Philanthropy Capital (NPC) argued in a report on charity trusteeship that charity board members often lacked relevant training and performance evaluation and that investment by charities in their governance remained low.

The report said that almost 50% of charities had Board vacancies and that almost half of trustees were aged over 60.

NPC proposed that the Government should encourage more people to join charity boards as trustees to broaden the range of skills and encourage diversity.

Maria Hallows, partner and head of the charities team Beever and Struthers, said charities recognised that strong governance was essential but had to overcome high hurdles specific to them.

She said: “Governance is a key issue for charities because of their reliance on volunteers. Charities recognise that volunteers can be difficult to manage in terms of governance and internal controls - people volunteer because they believe in a cause and not necessarily because they want to be good business people.

“Volunteers, who often work few or irregular hours, can be difficult to train and that can increase risks – the prospect of becoming a trustee and being ultimately responsible if something goes wrong is therefore an unattractive one.”

Hallows said the housing and education sectors had to comply with extensive mandatory governance requirements – but that although there are some statutory obligations in respect of governance in the charity sector, many procedures are not obligatory and are only recommended as a matter of best practice.

“Facing reductions in income, a cash-strapped charity may decide to prioritise delivery of front line services rather than strengthening governance controls because of both a desire to optimise achievement of charitable objectives and media pressure to minimise the amount of income spent on administration,” she added.

There is also increasing awareness among professionals of clampdowns by Her Majesty’s Revenue and Customs (HMRC) on charities diversifying into activities outside of their stated objectives and warnings from professional bodies about negligence issues facing professionally qualified people acting as trustees should things go wrong.

She believes that the shortage of trustees will “get worse before it gets better".

“As the UK economy relies heavily on the charity sector to care for and support those in need, and much of this care would still have to be provided were charities no longer there, this issue must be addressed from an economic perspective in addition to being a social obligation,” she said.

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