Charities dealing with the new normal

William Hague has written in The Times to argue that once-in-a-lifetime events are the new normal and that it’s comforting but wrong to treat pandemics, soaring energy prices and droughts as rare and so we must plan accordingly.

During a cost of living crisis and on the cusp of yet another dreaded winter when donations to charities are likely to drop while calls upon their services will only increase, it is tempting for charity leaders to focus only on the here and now, but as trustees already know, acting in a charity’s best interest means making balanced and adequately informed decisions, thinking about the long term as well as the short term. How is this possible?

The Charity Commission has a big task as a small organisation, regulating a vast sector. As the commission’s recently published 2022 annual report explains, it must work in such a way that its impact is greater than the sum of its individual functions, inspiring the confidence of the charities it regulates, the public it serves, and Parliament, to which it is accountable.

To achieve this seemingly daunting mandate the commission’s new chair believes it must be guided always by clear values (being fair, balanced, and independent) and be held to account against them, and that it must strengthen its use of data, ensuring it identifies potential risks in the sector early, take effective enforcement action where needed, and reach individual trustees with information in a way, and at a time, that best helps them.

This is a helpful model for charities to follow, underlining as it does the importance of managing risk, a topic we addressed in our inaugural trustee roundtable with Grant Thornton last November: Identifying and managing risk in your charity (shoosmiths.co.uk)

But talking about managing risk is one thing, taking momentous decisions at times of national crisis is another. And yet it is being done, every day.

St Ann’s is one of the biggest hospices outside London, based at three sites in Greater Manchester. It celebrated its 50th anniversary in 2021 but around ten years ago the charity’s leadership identified that the hospice would not remain fit for purpose for another 50 years and that some of its services would have to close unless action was taken and so in recent years the charity’s ambitious plans to rebuild the hospice have taken shape.

The vision – which St Ann’s is turning into reality – is a complete care facility to which people can come from diagnosis of a life-limiting illness, through to treatment and beyond – bearing in mind that 40% of St Ann’s patients do return home after spending time in the hospice.

The new hospice will also provide significantly improved facilities for outpatients – an integrated dining area and lounge, consulting rooms for outpatient services (including counselling, patient and family support, and complementary therapies) and a fully equipped physiotherapy suite, allowing more patients to access support earlier for wellbeing, symptom control and pain management.Implementing this vision has involved taking everyone in the charity on a journey, which is ongoing. Trustees are ultimately responsible for the running of their charity and owe a duty of 'prudence' which involves avoiding exposing the charity’s assets, beneficiaries or reputation to undue risk, not over-committing the charity and taking special care when investing or borrowing. Over the years St Ann’s had built up healthy reserves and it took foresight and leadership for the board of trustees to use a significant part of these funds to purchase vacant land adjoining the hospice where the new hospice will be built in the coming year or so.

But even once the new facility is ready a great deal of careful planning and co-ordination will still be required to move the hospice’s operation, in particular its inpatients, from the existing site which, once vacant, will be developed for housing.  

Such a massive project requires constant assessment, management and mitigation of risk – and it is a risk not to take risks because a mindset of risk aversion will in time prevent you developing significant opportunities and will curtail your ambitions as a charity.

But we recognise that it can be scary to take risks and that it may help to listen to the challenges other charities are facing and how they are dealing with them.

So, on Wednesday 9 November, to mark Trustees Week 2022, we will be reconvening our online charity trustee roundtable to find out how boards around the country are facing up to the challenges of 2022. If you would be interested in taking part in the roundtable (places will be limited) please contact [email protected]  

Disclaimer

This information is for general information purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Please contact us for specific advice on your circumstances. © Shoosmiths LLP 2024.

 


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