The state of charities

RSM has recently published the results of our survey 'The current and future state of charities 2015 – spring into action'.

Many of the issues covered are relevant to independent schools:

Board composition

  • 71 per cent of respondents say they have all the skills required for their Board.
  • Less than half provide induction and ongoing training to Trustees.
  • 94 per cent review strategic objectives at least annually.
  • 31 per cent do not regularly review Board performance.

Monitoring performance

Over 60 per cent of charities use financial projections. Forecasting future costs is as important as monitoring current ones, especially where salaries and changing employment costs are concerned.

There has been a drop in the number of charities including information on key performance, impact and outcome measures, compared to 58 per cent, 18 months ago.

Conflicts of interest

As for many organisations, perception is often as important as reality, so it is clearly best practice for all Boards to identify any potential conflicts of interest at every meeting, to protect them should issues arise later. However, almost a quarter do not do this. Similarly, 27 per cent do not maintain a conflicts of interest register that is regularly updated.

Board review and strategy

Trustees can only properly assess their effectiveness if they review performance. However, over 30 per cent do not do this regularly. More encouragingly, just fewer than 30 per cent do annually. One area that such reviews may focus on is the balance between strategic and operational matters that Trustees sometimes struggle to achieve. It is too easy to get bogged down in discussing the day-to-day issues that are really the responsibility of staff and not focus enough on the longer–term picture. While there is no set amount of time that should be spent on strategy, and it will vary from one organisation to another, depending on various factors, half spend less than 25 per cent of meetings on it although 7 per cent dedicate at least half of their time to it. Nearly two thirds of respondents review strategic objectives annually, although 6 per cent never do so.

Risk review

Identifying and mitigating risks continues to be a major issue for Boards and while 44 per cent review their risk register annually, 10 per cent do not regularly review. Risk management should not be treated as a one-off exercise as new risks are constantly emerging, and areas and levels of priority change over time.

Please contact Karen Spears, Nick Sladden or your usual RSM contact to discuss further.