Commission case reports examine financial resilience
Charity Commission publishes case reports into Success for All Foundation and Gosling Sports Park.
The Charity Commission (‘the commission’) today published case reports into Success for All Foundation (registered charity number 1077079) and Gosling Sports Park (registered charity number 302498) as part of the commission’s work to explore the financial resilience of the charitable sector and identify wider lessons for charities who may be experiencing financial distress.
The charities were identified from their accounts by the commission as showing signs that they may be at risk of financial distress, including potential insolvency.
We proactively contacted the charities to gain a further understanding of the issues and what actions were being taken to resolve them, as well as assessing whether there were any regulatory concerns for the commission. We undertook proactive analysis of the charities’ accounts and met with trustees at the charities to discuss the issues further.
The 2 reports outline the steps the trustees have taken to resolve the financial issues the charities faced. Success for All’s trustees identified that their charity was in financial distress and took a number of actions including reducing costs and diversifying the charity’s income. Gosling Sports Park’s trustees explored a range of options including the sale of property, changing the terms of the charity’s borrowing and the transfer of the charity’s operations.
Both reports demonstrate the importance of trustees identifying the situation the charities faced and exploring various options in a timely manner and before the situation became irretrievable. Trustees of both charities had to take difficult decisions on how to further the objects of their charity. The commission was able to verify the charities’ financial positions and provide assurance that the trustees had put in place appropriate measures to improve the future financial stability of the charities.
Michelle Russell, Director of Investigations, Monitoring and Enforcement at the Charity Commission, said:
“The commission’s work looking at charities in financial distress has identified the importance of trustees being aware of their duties and responsibilities as trustees and the need to be proactive. These 2 case reports show the importance of trustees acting quickly and identifying potential options when confronted with financial difficulties. Trustees had to take tough decisions but by addressing these head on and having frank discussions, they were able to make decisions in the best interests of their charities. We hope that charities in similar positions can learn from these reports.
“Trustees should regularly review their charity’s financial health and have robust procedures for managing charity finances. Trustees can use our 15 key questions’ documents as a helpful starting point to consider the health of their charity.”
Our guidance Managing financial difficulties and insolvency in charities (CC12) provides advice for charities that are facing financial difficulties and how they can reduce the risk of insolvency.
The case reports are available on GOV.UK.
Notes to editors
- The Charity Commission is the independent regulator of charities in England and Wales. To find out more about our work, see our annual report.
- The commission will be reporting further on this program of work. This work comprises of 2 strands:
- proactive monitoring of 10 charities identified as having signs they may be at risk of financial distress, 2 of which we have reported on specifically here
- a wider accounts analysis of 94 charities with incomes of over £1 million that may be in financial difficulty
- Search for charities on our online register.
Read more information on how the commission reports on its regulatory work.
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Published: 14 September 2016
From: The Charity Commission