Advice for trustees of small charities

Are you already a trustee of a small charity, or thinking of becoming one?

Brilliant, you are needed.?

It's likely to be extremely fulfilling.

You can have a huge impact. Especially when things are going well.

But things can go wrong. When they do it's likely to be related to staffing and / or finances, so here's a few not so obvious things to be aware of:

1. Your senior staff member might leave during your tenure…

… and you will need to give a lot more time to recruitment than you can imagine. If you don’t have the funds for recruitment support it’s likely the trustees will need to develop the advert and communications, speak to prospective candidates, spend days interviewing and giving feedback. And then there is the onboarding and induction process to design and manage. And what if you don't manage to recruit, what contingency plans do you have?

…and the transition in leadership will be challenging. It takes time to transition relationships, especially if there's been a founder or long-standing chief executive in post. Trustees may need to step forward and nurture relationships with partners or funders.

...and your systems might be bespoke or have evolved to suit an individual. Don’t find out too late that the systems and processes (or lack of them) suited one person and are not recognised or easily understood by others. Is there a manual with standard operating procedures?

…and what will you do if other staff leave or are sick? Are your trustees able to pick up the operations in the short-term at least? How can you prepare for this possibility? This has the potential to completely derail a charity if you only have one or two members of staff.

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2. Your finances are sound, the charity has reserves, income exceeds expenditure, cash flow projections are positive and the staff and trustees tell you the finances are healthy, but…

…you must still ask about accounting methods. Is the charity using cash or accrual accounting and ensuring the separation of restricted funds? These things don't tend to feature high on a trustee's list of questions, that is until things go wrong!

...has anybody properly stress tested the finances? You might have reserves but can the charity really sustain a gap or drop in income (when a person responsible for fundraising leaves) or survive external influences that may disrupt the organisation and service delivery? Sometimes more than one thing happens and then you find that you are suddenly in crisis even though it's been fine for many years.

… is the cost of delivery sustainable? Have you seen a robust cost-based analysis for all the charities activities? Are all the costs really accounted for? If not how do you really know that what you are doing is viable and sustainable? Are the contracts for people delivering services consistent and robust? Is there an appropriate balance of power between the organisation and associates or subcontractors? Is the charity over-reliant on partners or delivery mechanisms and have you assessed the risks?

Often, trustees are too trusting. New trustees have a powerful window of opportunity to bring deeper questioning. Not everything may be to your satisfaction, but asking these questions and getting things on the agenda might just ensure you can have the impact and experience you want.

It's also important to clarify what good governance looks like in a charity with few staff. Being clear about what is in the domain of staff and trustees is important, as is flexibility when trustees need to expand their role to support the organisation in times of opportunity or distress. As long the blurring of boundaries is conscious, planned and people get back into their lanes afterwards it can work well.

The charity sector is a tough place right now for small charities, but with the right trustees and staff you can thrive.

Peridot Partners is proud to have a team of people with practical executive and trustee experience who are using it to guide both candidates and charities through their recruitment processes.

If you have any questions about recruitment I'm always happy to have a no obligation conversation before referring you to a consultant if you'd like to sound things out with me first.