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HOW TO DELIVER GOOD GOVERNANCE FOR YOUR SMALL CHARITY

One of the biggest challenges for the executive teams of small charities is governance. Many start out with good intentions, inviting friends and interested parties to join the board. Yet, good intentions often drift as the organisation develops – responsibilities can get muddled and things can become political.

How do you deliver great governance for your small charity and maintain it, even through a period of change?

1

Revisit your charity’s governing documents

The foundation of good governance begins with clear articles. Revisit the charity’s governing documents and make sure the governance structure is clear. Rather than simply complying with the law, check they provide a springboard for good governance across all aspects of the organisation. Use the new Charity Governance Code toolkit to guide you. https://www.charitygovernancecode.org/en

2

Set a clear business strategy

It’s easy for a CEO of a small charity to get buried in day-to-day pressures and not have time to consider the bigger picture. Develop a clear business strategy which gives focus and direction. Once agreed by the board, a strategy becomes a tool for monitoring progress, for effective decision making and for delegating authority.

3

Define clear roles and responsibilities for your trustees

Perhaps the biggest challenge for small charities is making sure everyone’s roles and responsibilities are clear from the outset. Well intentioned trustees can become obstructive if they become too involved in day-to-day operations. The correct parameters are for the CEO and senior management to run the organisation and for the board to oversee their efforts. Define individual roles and invest the time to make sure they are understood by all. At the same time, make sure the board retains a sense of collective responsibility and is working as a team.

4

Keep the information flowing to your non-executive team

For your board to be effective, they need access to real time information. Have clear and transparent reporting process in place. Establish open relationships through a mixture of formal and informal channels to help non-executives exercise their responsibilities without expending all their effort seeking information. Boards that feel connected can focus on the strategic aspects of the charity and provide clear guidance, support and challenge from a position of trust.

5

Your Chair can be a referee and facilitator

There needs to be the perfect balance between support and challenge in this key relationship. In a small charity, the relationship can often be more intimate as a Chair is likely to be someone closely linked with the cause. Make sure the relationship is founded on transparency and clear communication from the outset. Check your Chair is comfortable questioning all aspects of how the charity is run. A good Chair can become a powerful referee and facilitator by making sure everyone knows what you need to do your job well.

6

Create working groups to get the most out of your board meetings

Board meetings are often the only chance to get decision makers together in one room every few months. Make sure your charity uses this time to get the decisions that it needs to get on with delivery. If you create a series of working groups with delegated mandates on things like finance and strategy, then your board can use its face to face time to monitor the charity’s progress against its strategy trusting that the finer details have already been discussed and challenged. Information flow from the working groups to the wider board is vital for building trust. Getting this right will allow your charity to respond quicker to new opportunities or sudden threats.

7

Set terms for your trustees

Small charities can suffer from the mindset of being grateful for support, but it is important to remember that you are in control and your charity deserves effective trustees. A small charity needs to build the board that best fits its changing needs. Every board member should understand and believe its aims and objectives. Review governance arrangements annually and set the expectation from the outset that trustees serve terms on your board. This means you can easily refresh skills and bring new people into place when required. This will help ensure your board keeps delivering what you need.

8

Get the right people on your board

As part of an annual review of governance, look at the composition of your board. Should you consider service users on your board? It is increasingly popular but not appropriate for all charities, so be clear about the benefits and risks. Also, do you have the professional trustees that bring sector perspectives and insights into particular areas with them?  A good trustee can bring the outside perspective in and help make valuable connections and introductions. In a time of greater scrutiny and competition for funds, trustees need to function as powerful ambassadors. Don’t settle for less.

9

Consider a merger once a year

The board should routinely consider a merger once a year. It may sound dramatic, particularly to small charities with an exclusively local focus, but it is really good governance. It helps to clarify the charity’s strengths and measure its impact. It will also ensure your charity keeps evolving by challenging its strategy on an annual basis. Each year, you will then have the confidence to move forward knowing you are being as effective as possible.

Further information

https://www.charitygovernancecode.org/en

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Page last edited Mar 21, 2018 History

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