Opinion: If your charity wants to change lives, its governance needs some order

If your charity wants to change lives, maximise impact, be sustainable and have stability, its governance needs to be in order.

Good governance is vital to protecting a charity’s staff, volunteers, users and donors. It helps to ensure that funds are used correctly, that trustees and staff are clear about the purposes of the charity and that objectives are being delivered effectively. Most importantly, good governance will result in the best outcomes and service for the charities’ beneficiaries.

In common with most funders, at City Bridge Trust, we always consider a charity’s governance arrangements when assessing an application for funding. The importance of this issue is recognised widely by funders and is regularly discussed through networks such as the Association of Charitable Foundations (ACF) and London Funders.

As a trust, we will only fund properly constituted organisations. They will usually be registered, either with the Charity Commission or another official regulator, and so will be expected to meet all of the relevant regulatory requirements.

Our grants assessment process includes in-person assessments, most commonly at the applicant’s offices. We always check information such as the timeliness of Charity Commission returns and review their governing documents, including how their finances are managed and controlled.

The charity needs to prove they are sustainable and they have stability if we are to fund them. We need to be able to rely on them and be sure our funding is going to be used effectively, efficiently and make a positive impact – we need to know that the charity we are supporting is run well.

We are sympathetic and aware that the burden of administration and compliance with regulations can be huge, especially on smaller charities. Many funders, ourselves included, do offer help to charities to support their work, to restructure or seek specific professional advice.

We periodically recheck governance arrangements as part of the ongoing grant monitoring process and this can in some instances include visiting an organisation unannounced.

Our robust requirements in terms of assessment and monitoring processes are constantly under review in response to changes in legislation or best practice.

The Charity Commission sets certain requirements, with an annual return and accounts central to the ability of all funders to see that the money is being well spent and accounted for. Transparency here is key.

We are supportive of the new charity governance code and, in particular, the requirement for charities to increase the diversity of their boards to improve effectiveness in decision making. It is positive that the code is being viewed as aspirational, with charities being able to undertake their own journey of continuous improvement to meet recommended practices.

The charities that we fund are at different points in their own lifecycles and development, so should hopefully be able to adapt their use of the code to their own situation over the coming years.

We are currently reviewing the implications of the new code, both in terms of our grantmaking review processes and also for the governance arrangements of our underlying charity, Bridge House Estates.

We are always challenging ourselves about how we can be the best funder and how the City of London Corporation can be the best trustee.

We believe that transparency and accountability is a key part of effective grantmaking. Our City Bridge Trust Committee makes all decisions, wherever possible, in public. Details of all grants awarded are published on our website and through the 360Giving initiative which includes several other major funders including the Big Lottery Fund, Comic Relief and BBC Children in Need.

Typically we will have about five charities attending each meeting. The presence of these charities does not inhibit conversations by the Committee and we have even had letters of thanks and congratulations about how we are making decisions and urging our members to engage in the issues.

We encourage charitable organisations to be as transparent as they can be, as it is a great way for a charity to build up trust in the work it is doing.

Charities tackle disadvantage and inequality, they change society for the better and improve lives. To do this to their best ability, they need to be run the most efficiently.

Alison Gowman is chairman of the City of London Corporation’s City Bridge Trust Committee

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