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Like yourselves, CAF Bank believes in communities working together to have an impact on the world around them. We believe that Partnership is an incredibly important concept and, whether you are a CAF Bank customer or not (yet), I would like to share some thoughts about how to have a good relationship with your bank and how we can all work together to make that Partnership stronger.
Keeping your bank mandates up to date, your internet banking logons active to appropriate team members, and a record of who does what may not be the most exciting jobs in the world, but they are necessary. If these chores are not done it may mean that insufficient signatories are available to undertake important transactions. Whilst the bank is keen to help, we must also protect your account from unauthorised use. One of the charities at which I volunteer has adopted the practice of reviewing the delegated authorities, mandates, and similar documents after the AGM. It keeps the trustees in the loop and means the bank can be kept informed.
It is really important to be able to translate internal language into more commonly used terms. Banks and other bodies will ask about your Trustees – these may well be called elders, PCC or many other things internally; but identifying who they are is important and avoids confusion.
One of the first things we look at as a bank when considering requests for borrowing is Charity Commission returns. If these are late, non-existent or qualified, then it leads to conclusions about an organisation and the way it is governed.
Policy writing is a vital part of charity governance. External bodies such as the Charity Commission and banks will ask about the existence of policies and at times may wish to see them. Having policies doesn’t constrain your team and volunteers. It protects and gives them clear guidance about what is acceptable and what isn’t. No list of policies can be exhaustive but there are some key ones you should consider:
Since the Covid-19 pandemic a new set of unexpected risks have developed such as the build-up of cash on site, volunteers not claiming expenses for extended periods, and loss of contact with keyholders. It is worth stepping back on a regular basis to consider what has happened and how to mitigate risk. An active listening programme by trustees can really help in this regard.
There remain significant risks to charitable funds; from straight theft through to cheque fraud, online fraud and phishing. As a rule, fraudsters will try to use urgency and fear to lead to mistakes. Always take your time to consider what is in front of you; and as always, if it sounds too good to be true it probably is. You can find more information about how to stay safe and secure online in the CAF Bank Security Centre.
Money is a tool we use to achieve our impact as charities and that means it is too important to be left to just the Treasurer. There are shared responsibilities and the finance team or treasurer needs to be really clear in their communications to trustees and supporters. They need to think about materiality, variability and whether their audience will understand the point they are looking to make. They need to be clear about where the Church can impact numbers and where they can’t. The trustee group and charity leaders need to be interested, to ask questions, and to be supportive and challenging. I recall once presenting a budget with some significant challenges and not receiving a single question. I felt very unsupported and alone but the message the trustees were trying to convey was one of trust. The best communications identify drivers, controls and comparisons.
If you want to achieve great things, you need a plan. Budgeting may not be easy; but it is always important. Organisations are very different in their predictability and the relationship between inputs and outputs; but all organisations need a budget plan. This helps us understand whether the direction of travel is as expected. One of the challenges of Church & Charity life is that there are more ways to spend capital than to acquire it. As a bank we routinely see propositions where great ideas can’t be followed through as the charity hasn’t been able to build up resources over time; where short term goals have trumped longer-term plans. This makes a clear medium term vision a really important part of setting a budget as it tells us what our objective should be. Where organisations are looking for external support, be it grants or borrowing, clarity around budgeting and plans will be really important.
If you are looking to progress a major project; and especially if you think you may need to borrow to support it; open up conversations with the bank at an early stage. This helps you understand constraints and opportunities; and can help prevent teams working on incorrect assumptions.
Over time, partnerships evolve and develop; and like any relationship, attention is important. These suggestions are a great starting point and will help underpin effective charity governance; but there will also be circumstances unique to your organisation. Understanding the factors impacting your bank and finance providers can help move from frustration to a positive working relationship. At CAF Bank, we are proud to be a Partner in Ministry, and will use our tailored approach, expert guidance and genuine care to work with you to help achieve impact in your community..
CAF Bank is a specialist charity bank wholly owned by the Charities Aid Foundation. We are dedicated to supporting charities and social purpose enterprises and have won accolades for our sector knowledge and experience. We are proud to be a Partner in Ministry with ACAT.
CAF Bank Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number: 204451.
I am currently the Head of Customer and Lending leading a team which works with those who would wish to borrow money but I have an interest in all things charitable, from fundraising to impact reporting. I am an active volunteer and have been a trustee for a number of organisations, from my PCC to youth charities. I believe in the impact of the Third Sector and the vital importance of good governance in supporting that impact.
