As a business journalist, interviewing FDs while quaffing gently carbonated designer water in their award-winning offices at a sexy London address is an occupational hazard.

But those frivolities are absent at the decidedly less glamorous headquarters of Voluntary Services Overseas (VSO) in south-east London, where its new finance director, Jo Knowles, is based.

Of course, it’s the warm fuzzies, rather than the quarterly enrichment of shareholders, or a hefty corporate pension that Knowles counts as her motivation. But the FD says many accountants find it hard to match their occupation with making a positive change to underlying causes as lofty as Ethiopian education advocacy, or Kenyan attitudes to AIDS.

As a careerist charity accountant and FD of VSO since this January - it’s an international development charity working across 34 countries that celebrates its 50th birthday this year - Knowles believes her work quietly, but critically, lays the foundation for its 1,500 volunteers to effect its mandate.

‘If you don’t keep finance working well - produce accounts, pay bills and staff, keep IT systems working, keep stakeholders and regulators happy - people would stop giving us money and the Charities Commission would close us down,’ she says.

There is a prevailing belief that running a charity is easier than running a corporate - no greedy shareholders, quarterly reporting, or market pressures. Knowles refutes this: in the two decades she has spent running the finances of big brand outfits such as Greenpeace, Cancer Research UK and Save The Children, she has seen accounting governance revolutionised to become as mission-critical as it is for any other publicly visible company.

Competitive environment
‘VSO is reasonably privileged because 60% to 70% of its funding comes through the government’s block grant schemes, so we are not competing for all our income. But governments change and priorities change - you could be flavour of the month today and out of favour tomorrow, yet your beneficiaries remain and so does your desire to serve them. Those pressures are enormous.

‘I’ve worked in charities that were entirely reliant on public donations and that’s a very competitive market. Because VSO gets a lot of government funding, there’s a perception that we don’t need their cash. But we are competing for money the same way everyone else does and all charities talk about brand, segmenting markets, lifetime values - all those commercial considerations, because even though we are a charity, in a sense we’re a profit-making company. We just don’t expect to make 10% - we expect more like 30%, 40%, 50% on the money we’re spending.’

Knowles is responsible for doubling VSO’s donor income over the next three years from 2007 figures of £40.6m - an ambitious target.

There are threats to income from the global economic downturn, made all the more worrying in the face of consecutive, devastating natural disasters in areas where VSO works, such as China and Burma. ‘Our plan to double our income may not be so deliverable,’ she concedes.

Knowles, who left Shell’s graduate trainee scheme in 1992 for Save The Children, was among the first of a throng of qualified accountants moving into the third sector for the first time amid its period of reporting professionalisation.

Responding to accusations of charities squandering donations in various ways, failing to deliver on their mandates and scrutiny around their lack of transparency and financial governance practices, the Charities Commission and the Accounting Standards Board formed the industry accounting standard, the Statement of Recommended Practice, in the 1990s, and later the Statement of Financial Activities. This was updated in 2005 to expand the narrative in charities’ annual reporting, in a similar way to quoted company requirements.

Amid this sea change, Knowles rose from project accountant to become acting FD for Save the Children in 1997 before moving to the Imperial Cancer Research Fund and becoming a key architect of the merger with the Cancer Research Campaign to create Cancer Research UK.

There, she became head of finance for one of the UK’s biggest charities, by income, before spending two years as FD at Greenpeace in Amsterdam. Moving to the UK-based Alzheimer’s Society proved a temporary distraction from international development as the VSO role tempted her back.

Short-term thinking is another curious paradox in some larger charities, Knowles says, owing to their long-term mandates. In 2008/09 her priority is to change this. VSO’s finance and IT systems, coming under her remit, could do with an overhaul, for example.

‘Things within VSO are quite based on annual budgets and plans, and there’s an opportunity for us to think a little further ahead than that, which includes looking at some of the financial systems we’ve inherited,’ says Knowles.

‘They’ve not had much money spent on them; we need to re-write our IT strategy. But it’s a massive project because it is core to what everyone does - and no one wants to be blamed for breaking it. It will be a bit of a battle to get money spent on what people see as admin and overheads,’ she adds.

‘In a sense, the ‘good spend’ is what you do internationally and the ‘bad spend’ is what you spend on support. If we have £100,000, we can choose to have a look at the accounting system, or we can send more volunteers overseas. Those are hard conversations in charities.’

Knowles headed up an IT overhaul at Alzheimer’s, ploughing £1m into its 25-year-old systems. ‘It was just never deemed necessary to have an IT network, but we had to do it because it’s what people expect of an organisation with £45m turnover,’ she says.
Doing the dirty jobs has been a double challenge in a sector that demands consensus to move forward - consensus from a number of stakeholder groups, who tend to shy away from change and spending on anything but the cause. Investor relations have played a critical role in Knowles’s repertoire.

Reaching consensus
‘You’ve got to herd people to a degree, particularly when you’re working with volunteers who are investing in the organisation and its ideas and for whom change can be a threat, so decision making is slower that those in the corporate world would be used to.’

That has not always equated to a slower working environment. ‘The out-there, challenging, assertive way Greenpeace worked on its external campaigns was the way it also operated internally, so the people there weren’t backwards in coming forwards and it made it a very interesting place to work,’ she says.

‘But my job there was to stay back and keep things tidy so they could do that. It’s important for me that there is some relation between what I do and the cause of social justice.’

Travel plans

VSO has a federation structure with five separate bodies across Britain, Canada, Kenya, Netherlands and the Philipines.

The key objective is to contribute resources, in particular volunteers, to share skills and knowledge. In short VSO brokers the employment of volunteers by partner organisations.

This may mean providing training to the volunteers or providing some form of financial support so employment can be taken without fear of financial problems.

At the moment VSO has targeted a number of key issues in its strategy including education, HIV and AIDs, disability, health and social well being, secure livelihoods and governance.

Currently there are projects underway in more than 30 countries as diverse Bangldesh and Zimbabwe and Cambodia to Zambia. It costs around £15,000 a year to recruit, train and equip a single volunteers to take up their posts. But, volunteers don’t need to go abroad to work for VSO. The UK has a network of 70 local groups from Cornwall to the Scottish Highlands.

Volunteers are organised in a number of ways including short-term specialist assignments, youth development for young volunteers in particular, tema based exchanges and encouraging to work in diaspora projects for communities in their country of heritage.