Changed guidance on charity reserves “unhelpful”

The Charity Commission has updated a number of its key finance guidance documents for charities in England and Wales

”  to show clearly that trustees are ultimately responsible for their charities’ finances, and respond to the need to make sure its guidance reflects the most current challenges facing thousands of charities”.

The three sets of updated guidance are:

We note that unfortunately only the pdf versions give an outward indication that they have been updated.

Charity Commission news article.

Civil Society News reports that the Charity Finance Group has objected to the Commission’s failure to consult on the updates. CFG’s chief executive has also expressed concerns about the revisions,which are “unhelpful”.

“Trustees should decide on a reserves policy and target range based on the risks and opportunities facing their organisation as well as a balance between the current and future needs of beneficiaries. By focusing on the risk of unplanned closure, for example, the guidance does not encourage charities to take a holistic view of the needs of their charity.”

A CFG article by Kate Sayer elaborates on the issues, in particular in that the new version expects charities to hold reserves for an “unplanned closure”.