Finance: Outlook - Charity advisers, do your homework

Some advisers have a weak understanding of the voluntary sector, writes Helen Verney.

At the recent Tolley's conference on charity law, accounting and tax, I was surprised to find that, in addition to the charity finance staff one might expect, a significant number of attendees were advisers to the charity sector.

What surprised me even more from the questions raised was how little some of them seemed to understand charities or the sector. I left hoping they did not represent the sole resource within their respective firms - to which, after all, charities turn for expert advice.

Perhaps the most astonishingly ignorant suggestion made by one vocal lawyer in the audience was that "charities were unaccountable due to their lack of shareholders and consequently should be required to send their accounts to every donor each year".

It's difficult to decide where to start on this one. If I take the MS Society and its donors as one example, 40 per cent of our income comes from legacies - and, although many sets of accounts have bored people to death, I believe it's too much to expect donors to read them from beyond the grave.

A further 10 per cent of funds raised are from our local supporters rattling tins. I understand the average donation put into collecting tins is less than 50p, and names and addresses are rarely collected. Perhaps the tin bearer should also carry a large rucksack full of accounts to hand to each donor. The cost would outweigh the benefit and the accounts would outweigh the volunteer.

And what of our corporate and trust donors? Most require a set of audited accounts before parting with funds, so charities aren't expecting any favours there.

At the MS Society we have an active membership in excess of 40,000 people affected by the disease, each of whom receive the annual accounts and is entitled to vote for our trustees and on key decisions of the organisation.

Many members are also donors, fundraisers and beneficiaries. And at least 33 per cent of all those with MS in the UK are members of the society.

I challenge anyone to point to any set of shareholders who expect or receive more accountability than our key stakeholders.

Remaining funders are quite capable of requesting accounts, assuming they do not have the facility to download them from our website or that of the Charity Commission.

We work closely with our stakeholders and tailor our level of reporting to their needs. Our focus should be on better reporting of outcomes rather than outputs, and that's where self-criticism is focused in the sector.

My conclusion, worthy advisers, is this: if you wish to dish out advice to charities, do your homework first.

Helen Verney is director of finance and IT at the MS Society

KEY POINTS

- Some advisers to the charity sector can have a poor understanding of charities

- Providing accounts to donors is impractical in the case of legacy donations and street collections

- Advisers should carry out some research in the area before dispensing advice.

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