5 February 2016
The Governance Academy explains an element of controversy surrounding recent updated financial guidance from the Charity CommissionThe Charity Commission has just published update guidance on " Charity reserves: building resilience" (CC19) and "Managing a charity's finances" (CC12).
The Charity Finance Group has made two objections to the guidance on reserves: firstly, that the Commission did not consult with charities and secondly that it could make the charity sector less resilient. Here are some quotes from the Charity Finance group expanding their position:
"excessive emphasis placed on views of external stakeholders and unplanned closures"
Trustees may "misunderstand the role of reserves and not develop effective policies"
It also expressed concern that the guidance does not take into account "the need to build a reserves policy from a position of understanding of both the risks and opportunities facing a charity".
Indeed, Caron Bradshaw, the chief executive of Charity Finance group has described the revised guidance as "unhelpful".
Anyway, it is up to you as a trustee to make your own judgement about this guidance alongside your fellow trustees.
So, read it for yourself.