Mind The Gap

01 February 2020

I met a lovely fundraiser at an event last week who told me that one of the board of Trustees for her charity is retiring and they are struggling to get a replacement.  This got me thinking…. Who would take on the role of a Trustee? Donors can see the wonderful work the volunteers and the fundraisers do.  They are less likely to ever see or quite understand what the Trustees do.   

When we buy a house, we look at the size, location, where the Christmas tree will fit (or is that just me?) but we don’t get excited about the foundations.  We take it for granted that they are solid and without them our dream house could not exist.  Trustees are the foundations of their charity.  In the background they have responsibility to make vital decisions to ensure that the charity runs effectively, in a highly regulated environment.  Without these foundations the charity could not exist.   

The aim of any charity is to have a healthy cashflow for immediate spending requirements.  The Trustees also have a duty of care to donors, as well as current and future beneficiaries to put a long-term financial plan in place.  This ensures that the charity remains sustainable and leaves a legacy for future generations. Recording their investment policy in writing and investing via an endowment enables them to diversify income streams, increase impact through financial efficiency and minimise impact of potential loss of funding.   

The Charity Commission states that Trustees must take advice from someone who is suitably qualified in investments.  It is important to get professional advice at the right cost, and there are many excellent Investment Managers who will provide specific investment solutions.  However, there is a need for wider consideration, and herein lies ‘the gap’ which a Financial Adviser can fill.     

A good board of Trustees will divide their skills and have sub committees covering a range of objectives to be met.  A good, charity specific Financial Adviser, will be able to provide initial and ongoing advice, support and guidance across most of these objectives, that goes beyond investment management.  This encompasses governance, cash flow analysis, pensions and financial planning for staff. In addition, they are suitably qualified and have the skills and experience to conduct independent research into Investment Managers, help the Trustees understand the differences between investment propositions and present them in a clear, concise way without jargon.  

In conclusion, a Financial Adviser will work with the Trustees to analyse cashflow, reserves, time horizons, future projects, funding (or lack of) and create a long-term strategic plan around these areas, in line with the Trustee Investment Policy Statement.    

So, Trustees, make sure your foundations are solid, and build on them.  With the help of your Adviser, you will not need to ‘Mind the Gap’.         


Julie Preston

Libertas Wealth Management

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