Q. My trustees are keen to recommend suppliers to save us money. Is this as good as it sounds?
A: How encouraging it is to hear that your trustees are engaged enough to use their influence and contacts to support your charity. I am sure many people dream of finding themselves in your position; but you are right to appreciate that things might not be as simple as they seem.
There are three areas to examine: legalities, process and potential pitfalls. The first issue is whether your trustees have any financial interest in the companies they recommend. It's also worth establishing if there are any potential benefits to a spouse or offspring, for example. Check that your governing document allows your trustees to receive a benefit and that you make sure you follow due process. The Charity Commission's website gives good practical information.
The tricky situation is when a trustee would not receive a specific financial benefit but could, for example, gain improved business relationships with a supplier, receive some personal benefit or find themselves with divided loyalties that could influence their decision-making. The commission recommends that charities create a policy for dealing with potential conflicts of interest. In essence, it is important that a trustee declares any conflict - for me that includes perceived conflict too - and does not participate in any decisions relating to the issue in question. I feel strongly that this should mean not simply keeping quiet during discussions but withdrawing from the room altogether so that trustees can feel comfortable.
Now to the potential pitfalls. First, how can you be certain that the suggested supplier is truly the best value for money and the most appropriate in terms of quality and experience? The best way is to make sure that you have a sound procurement process. Any recommended supplier should have a proven track record of delivering the type of work commissioned and provide the same level of service that would be offered to any other client.
It is tempting to rely on trust, but I'm sure I'm not the only person who has regretted failing to ask for a quote when a friend of a friend has offered to do some handiwork around the house.
Second, how will you manage the situation if something goes wrong? If the supplier does not deliver, for whatever reason, the trustee concerned could be put in an awkward position and it would be completely inappropriate for them to end up in the position of mediator.
So apologies if this advice seems over-formal and verging on negative but, believe me, it is based on learning from an experience I would not like to repeat.
Valerie Morton is a trainer, fundraiser and consultant