Liz Pepler, a small charity finance consultant, sets the context for our new finance guide for chairs. Chairs of small charities are facing financial changes and new challenges. We worked with Liz to create a new resource to help chairs feel more confident about leading their board.
Good financial governance has never been more important
The Autumn Budget brought some welcome news for the charity sector: an increase in local government funding, new money for social care, enhanced support for carers, and an uplift in resources for education.
However, it also introduced new obstacles. The most significant is the planned increase in employers’ National Insurance contributions, effective from April 6, 2025. This change will impact the majority of charities, although smaller organisations may be partially or fully shielded due to the rise in the employer’s allowance. It is estimated to cost the sector an additional £1.4 billion.
Navigating these challenges, alongside the ongoing pressures of rising demand for services, increases in inflation and energy costs, uncertain income streams, and the closure of funding programmes is – as we know – no mean feat.
Building longer-term financial resilience in today’s challenging landscape requires charity chairs to commit to risk management and leadership. Robust financial governance has never been more important.
35% of charities say they are lacking financial expertise
According to research by NCVO, over a third of charity boards say they lack financial expertise. Concerningly, charities struggle to recruit trustees with finance knowledge.
Finance is one of the most common skills gaps across the micro, small, and medium charities surveyed by NCVO. A lack of finance skills might not be unusual, but it does have the potential to create additional vulnerabilities in a charity.
The good news for charity financial governance
It’s not all doom and gloom. A lack of finance expertise isn’t necessarily insurmountable; with the right approach, boards can develop the skills and confidence they need to steer charities through choppy financial waters.
Effective governance often comes down to asking the right questions and using free or affordable support to strengthen current practices.
This is where your role as chair is critical.
A chair turns a group of great trustees into an effective board
When it comes to financial leadership, board chairs have no special responsibilities. We can’t emphasise this enough: all trustees are jointly and collectively responsible.
However, the chair’s duty to lead the board in delivering good governance also extends to finances.
It is the chair who creates the conditions for trustees to fulfil their financial responsibilities.
Our new free finance guide for chairs of small charities
Financial Leadership in Small Charities is our new guide written with and for chairs.
It’s particularly aimed at new chairs of small charities who want to get a handle on their organisation’s current position.
This new financial leadership guide:
- helps you to reflect on your charity’s financial governance
- outlines how to identify strengths as well as areas for development
- signposts to useful free and low-cost resources suitable for all trustees
Financial Leadership in Small Charities is not a comprehensive guide to charity finance, nor does it cover every financial responsibility of trustees. Resources addressing these topics can be found elsewhere.
Good governance starts with good questions
A key part of Financial Leadership in Small Charities is the reflections. These five foundational questions address the unique nature of the role of the chair and can be used as a framework to support the development of good financial governance.
In the appendix, we offer a tool for you to undertake a self-assessment and chart progress.
These reflections should be particularly relevant to new charity chairs, or those who are leading smaller organisations.
However, since good financial governance is an ongoing learning process, even experienced chairs and those leading larger organisations will find value in the guide.
How to access the finance guide for chairs
Financial Leadership in Small Charities is now available to download for free from our website.
We hope you find the guide helpful for your role, board, and charitable aims.
The Association of Chairs has a wealth of support and resources designed for charity chairs. Find out more about joining us here.
Thank you to our supportive community of chairs
The Association of Chairs would like to extend our thanks to the authors, Liz Pepler and Uday Thakkar, and our wonderful community for volunteering their time to help draft this guide. We are also grateful to the Chartered Accountants’ Livery Charity for contributing to the costs of production.
About our guest author Liz Pepler
Liz is a charity resilience specialist, founder of Embrace Finance, and co-founder of the Small Charity Friendly Collective. As well as running Embrace Finance, Liz also provides bespoke mentoring, consultancy and masterclasses to charity boards, leaders and teams at Liz Pepler Consulting. Click here to find out more about Liz on her website.
