The new chair of the Charity Finance Directors' Group tells David Ainsworth that he envisages an expanded role for finance chiefs
Almost 25 years ago, Ian Theodoreson chaired the very first meeting of the Charity Finance Directors' Group. Back then, he says, the world of charity accountancy was very different.
"It was pretty amateurish," says Theodoreson. "Up until the 1990s, finance was seen as a back-room function. But now we're seeing a sea change in the view of the finance director as a leader."
Last month, Theodoreson, the chief finance officer of the National Church Institutions of the Church of England, was elected permanent chair of the CFDG, replacing Roger Chester, who had been acting chair since June.
Theodoreson starts his three-year term with the group in rude health. Income for the CFDG was more than £1.2m in 2010, compared with just over £1m two years earlier, and its courses, training programmes and conferences for charity finance managers remain popular. Finances are so strong that the organisation has found itself with too much cash in reserve, and plans to reduce that amount over the next few years.
Theodoreson's priority for the group is to encourage finance managers to play a greater role in the strategic direction of charities. "Finance directors should be involved in setting the mission and vision for the charity," he says. "I'd like to see more finance directors becoming chief executives. I'd like to see the CFDG do more work in personal development and get more involved in mentoring."
He was involved in writing the first Statement of Recommended Practice for charities, but cautions against getting too hung up on the detail of accounting. Instead, he says, the sector's finance professionals need to focus on how their skills can drive an organisation forward. "I hate the term bean-counters," he says. "The role of a finance department is so much more than that.
"The preparation of statutory accounts is certainly important, but it's your management accounts that show you where you want to go and whether you have the resources to get there."
He takes issue with the view that a finance director's job is to say no to over-enthusiastic colleagues in other departments. "I had one colleague in a previous job who would approach me with a hundred ideas," he says. "Many wouldn't work, but there was the odd nugget of gold. In a way, our job is to identify those nuggets of gold. It's to be selective about saying yes."
He believes it is important to be prepared to innovate. Finance attracts people who like to find a path to follow and carry on that way forever, says Theodoreson, but you can always do something better. "The best question I was ever asked, which made me change the way a whole department worked, came from the receptionist," he says.
Another key task is for third sector organisations to improve the way they measure their impact. Here, he feels more work needs to done. "You have to be able to demonstrate that what you're doing works," he says.
"That's particularly true for larger organisations. If you're giving to a local church, you can see the impact. If you're giving to a local hospice, you've probably seen it in action. But it's harder to have that genuine engagement with larger charities."
Theodoreson says that, although some charity work is not easy to measure, that shouldn't deter organisations from at least trying. He says: "You should ask yourself 'what would things look like if we're successful?' and try to measure whether that's what happened."