In the run-up to the festive season, the theatre company Full House, a charity of which I am a trustee, has been performing A Christmas Carol. It has great lessons for finance professionals to consider at their year-ends and when setting their charity's budget.
Not that I'm suggesting finance professionals should be seen as Scrooges, I hasten to add; rather, it is a time to be visited by the ghosts of past, present and yet to come – an opportunity to examine what happened over the year, to reflect on what you achieved (or didn't) and, most importantly, to look forward to what comes next.
In my experience, the balance between these three ghosts can be skewed towards dwelling on what has passed. Like Jacob Marley, we can get weighed down by the chains of what has gone. Not only can this prevent us from understanding the present and all the resources we have at our disposal, but it can also stifle our ability to plan for the future.
Creatures of habit
Why the imbalance? We are creatures of habit – Christmas shows us that. How many of you sit down to the same food with the same people in the same location? I know I do. For festive celebrations, a lack of variety isn't necessarily a bad thing, but when you're thinking about your charity's plans for the future and how you're servicing beneficiaries, it can be.
We like to pride ourselves as a sector on being innovative. There is fantastic creative work happening all the time – but, if we're really honest, we have a tendency to stick with things, perhaps because we've always done them that way. For the absence of change to be healthy, it must result from an active decision, made after review and reflection. It should not result from inertia.
For example, at home I have an old heating system, installed in the 1980s, running off an old range with a back boiler. At each year's service the engineer expresses surprise that it's still going and recommends that we leave well alone. One year we might get caught out, but for now it's working. The worst that happens, if my boiler breaks down, is a period of cold and, if we're very unlucky, an interrupted Christmas lunch. But in our charities, failure to see that an activity or approach is reaching the end of its shelf life can be disastrous.
Reviewing your charity's risk strategy regularly is a way of breaking out of habits that might not serve your beneficiaries effectively. In January, CFG members will gather at our risk conference to find ways of embedding risk management and to explore our role in developing and implementing an effective risk strategy.
Clear about vision
And, of course, many people will make New Year resolutions and smile wryly at those made last year, only for them to run out of steam by February. When we set our future activities or budgets, are we clear about our vision and purpose? Only if we are can we plan the steps that will lead us there and turn our good intentions into actions.
Take the opportunity at the close of your financial year to apply a bit of thinking from A Christmas Carol. Have a balanced look at all three ghosts. Don't dwell on the past, but seek to understand everything you have at your disposal and reassess what your beneficiaries need in the present. Make resolutions that you can keep. And even if, like Scrooge, a night with the ghosts is scary and uncomfortable, ultimately it is worthwhile, because it can help you face the future with renewed enthusiasm and determination.