In the second episode of this season on ‘Making Things Happen: Churches, Charities and Money’, Simon and Bex discuss key financial principles and first steps for charities and churches that are at an early stage of their development.
Some key points of interest covered in this episode include the following:
- First of all, Simon explains that there are various legal and regulatory requirements that need to be fulfilled when setting up a charity. These include compliance with HMRC guidelines, providing annual accounts and following legal advice when communicating about the charity and initiating its activities. [02:05]
- Secondly, Simon emphasises the need to ensure, through internal communication, that the charity meets the requirements of being a ‘going concern’. This process includes various key activities, including the following tasks: setting budgets; identifying goals, objectives and priorities; monitoring and managing cash flow; responding in a timely and effective manner to changes in circumstances. [04:09]
- Simon notes that mistakes and difficulties can arise within charities and churches simply because those involved are so often volunteers or enthusiasts who do not have the business skills and experience that would be helpful when dealing with some of the challenges that can arise. It can be important, therefore, to ensure that people are allocated to appropriate roles, good internal communication is facilitated (eg regarding budgets), and external help is sought when required. [11:06]
- Thirdly, communication with external parties - such as supporters, volunteers and donors - should always be a top priority for charities, not least because they are so reliant on the support of the individuals in these groups if they, and their activities, are going to flourish. Examples that Simon provides to illustrate this point include a presentation made to a bank when requesting a mortgage and explaining to a congregation what a difference it can make to church finances if giving is done through standing order rather than on an ad hoc basis. [13:54]
- Bex notes the impact that it can make when a charity identifies and celebrates life-changing outcomes that have been made possible by supporters’ donations. [16:41] This prompts Simon to mention the concept of ‘anchoring bias’ and that it can be important for a charity or church to gauge the ‘culture’, circumstances and expectations of its audience when putting out communications. [17:52]
- In response to a question from Bex, Simon shares some thoughts on how a charity or church might need to adopt different approaches and styles when endeavouring to make requests for donations in a way that will take account of the whole spectrum of financial ability to give within an audience. [19:59]
- Simon rounds off his comments by encouraging those involved in church or charity finances to seek out the help and resources that are out there and to concentrate on building up a vibrant community of loyal and committed supporters. [23:11]
- The next episode in this season will consider the various ways in which churches and charities can acquire the money that they require to fund their activities. [25:10]
Suggestions or feedback arising from this episode can be sent via email to whereyourtreasureis@freerangepodcasting.co.uk while messages via Instagram should be directed to @whereyourtreasureispodcast.
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