One charity we have dealt with over the past few years found that it was never able to stick to budgets which had been carefully prepared with input from the trustees, the users and external sources.
What was going wrong? Certainly, looking back over (then) recent years it appears that some activities were running away with the funds, whereas others not so prominent.
A review of activities could not take place without first looking at the governing instrument of the charity, to weigh the activities carried out against the declared objects. Had this exercise not been carried out, the charity was in danger of ending its (over) 150 year existence.

The results were striking: in the first place there had been mission creep whereby activities which were secondary to the main objects were consuming more than 2/3rds of the budget, and governance had slipped to the extent that there were unauthorised and poorly managed conflicts of interest among the trustee body.
Fortunately, this charity was able to restructure itself to correct the defects, and the resultant change of objects and emphases provided a new lease of life, more in accordance with the wishes of the donors. Here, the review was forced upon the charity from internal budgetary pressures, and the changes, which had to be carried out rapidly strengthened the charity.

By contrast, another client which works n the charity-sector, without itself being a charity made good use of the fact that, in common with many such charities and support organisations, used the Covid lock-down period, when activity had considerably reduced, to ask itself whether – in the likelihood of reduced funding for a while – its governance and activities were carried out to the optimum.

The organisation had the benefit of time on its hands that Covid produced and arrived at the conclusion that there were a number of significant improvements to its operations, including defining who are the trustee board, the financial protocols and activities used to generate and then distribute funds.

This was not a luxury available to the first example charity, which had to carry out its review whilst continuing its work: the lesson is clear:

  • What once worked may not do so simply by the passage of time, and particularly so where comfortably off charities engage in “mission drift”;
  • Next, prudent trustees will set time aside periodically to assess what the organisation is established to do, and to check that the methods employed are optimum having regard to changes in processes and availability of technology.