Focus: Finance and Governance - Outlook - Beware of charity finance buzz words

Helen Verney is finance director at Jewish Care.

Away with collections, appeals, boring old fees and multiple charges.

In with pricing, products, bundles and baskets. Away with directors of boring old finance and in with shiny new directors of enterprise. Beam them down, Scotty ... they're from another planet.

I'm noticing a change of vocabulary in the world of charity finance lately, and it's not as if we ever had a large vocabulary to start with. We use a much smaller number of words in our daily lives than hosts of other professions, someone once told me, and I have always fully believed it.

Along with the push towards 'being more commercially minded' and 'professionalising' the organisational practices of our charities has come a whole new set of business terms.

When looking at how to charge services to beneficiaries, finance directors are often now found discussing pricing bundles, differential pricing models and product life cycles. Many are not even swapping 'profit' for 'surplus' in their speech any more - a heinous crime.

But is it all just talk? Are we actually changing the underlying substance of what we are doing? I was interested to read in a newspaper last week that the British population are finding themselves 'devastated' on an almost daily basis. But hasn't 'devastated' just become the new word for 'nightmare'? The events they're referring to haven't actually changed in any way.

There seems to be a genuine desire to move the sector's funding relationships and business practices forward. I am simply saying that we need to be cautious in distinguishing between those things that have just been renamed and changes that represent fundamental shifts in practice.

I have no doubt that the debates about full cost recovery represent a genuine change of substance.

The sector wants to charge a price for contracts and keep any surplus (or should I say 'profit'?) it might make on that, as any commercial organisation would, rather than submitting detailed 'costings and budgets', which are pored over and clawed back if unspent. This is the right way forward and, if necessary, we are prepared to suffer longer tender processes to get there.

On the other hand, a service to beneficiaries doesn't instantly become more efficient or commercially thought-through simply by being renamed a 'product', even if the perception may change.

The challenge is for us to ensure that our habits and approaches become more entrepreneurial and commercial at the same speed as our language changes. Finance directors don't become 'directors of enterprise' simply by wearing blue pinstriped suits and talking about profit margins.

KEY POINTS

- Much of the sector is keen to move business practices forward, and this has resulted in a change of vocabulary in charity finance

- However, a change in language does not always mean a change in practice.

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