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NGOs: Give something back

The economic downturn has hit many NGOs hard, making the role of the accountant there even more crucial

The recent economic woes of the UK have left a mark on all types of
organisations. But for NGOs, heavily reliant on government and commercial
funding, the challenges presented have been huge.

Consequently the need for robust accounting procedures and good financial
reporting practices has never been more important. And with a lot of the
sector’s income coming from the state, it is more vital than ever to be able to
demonstrate that taxpayers’ money is being spent in the most efficient way

Any expenditure is going to come under the strict scrutiny of the trustees
and being able to give a good business case for that expenditure is vital. And
it’s that phrase – making a good business case – that lies at the crux of the
biggest challenge ahead for charities: the ability to think like a business,
while still remembering the cause.

It’s a challenge that’s very close to the heart of Henry Bennett, who spent
six years at the World Society for the Protection of Animals (WSPA) at FD level
and is now at the British Institute of Innkeeping (BII).

“I’m fairly obsessive about forecasting”, he says. “In 2008 when the credit
crunch was on its way, we looked at different financial models in terms of being
able to cope – the hedging of foreign currencies together with looking at the
budget, so that by 2009 we already had a plan to cut costs in areas which didn’t
affect charitable expenditure. This meant that unlike some of the bigger
charities, we didn’t have to make any redundancies.

What we need in the sector are more FDs and accountants with all of the
skills – and more – that are needed in business and so attracting commercial
talent is one of the sector’s key challenges”.

“The finance function needs to be far more proactive. Take budgets for
example. It’s no good thinking in ‘public sector’ mode i.e. if I don’t spend the
budget this year then we won’t get it next year – charities just don’t work like
that. Budgets need to be far more dynamic. The expenditure may be in the budget
but if the fundraisers’ haven’t secured the cash then it can’t – and shouldn’t –
be spent. There is also of course, the possibility that the fundraisers may not
raise the money and managing that sort of budget is a real challenge in itself”.

All this means that the NGO sector can provide a challenging and enriching
career for today’s accountant, even those who only have commercial experience.

While some finance professionals have devoted their whole career to working
in the not for profit arena, there are those who move from the private sector
and choose to work for a charity – generally speaking this is often driven by
social conscience.

The latest high profile humanitarian disasters, such as the recent earthquake
in Haiti, bring the importance of charity work much more to the forefront of
people’s minds and I believe that this trend of accountants wanting to use their
skills to ‘give something back’ is going to be a progressive one.

There are many benefits. There is often a much steeper career path – it can
be a much quicker route to the top than, say, in a major blue chip – and the
sorts of projects being worked on are usually very varied. I know people who
have been sent abroad to provide financial and systems support to the
humanitarian response to conflict or drought problems and who have worked for
aid agencies in places such as Mozambique and Kosovo. There are many
opportunities for newly qualified accountants to move into fairly senior
positions and gain experience across a wide range of financial areas.

Major skill sets in demand include strategic planning, project management and
systems. Additionally, projects associated with change management are on the
increase and that’s where commercial experience can be particularly useful.

The slow road to recovery will be accompanied by an increase in demand for
financial skill sets. And, if charities do not act now to bolster their skill
sets, they may find themselves not only competing with other charities for the
best talent, but the private sector too.

Making the transition

While there are an increasing number of professionally qualified accountants
wanting to work for more ‘ethically’ sound organisations, there can sometimes be
reluctance from charities to take candidates without previous experience of the
sector, particularly around reporting requirements such as SORP. As trustees of
charities often work on a voluntary basis, and may not have a background in
finance themselves, they need to know that they are employing people who are
capable of doing the very best job possible. However if you’ve got a newly
qualified accountant who has a grasp of GAAP then picking up SORP should not be
an issue. Additionally, there may be an opportunity to take the ICAEW Diploma in
Charity Accounting – a course specifically designed for accountants to give them
the knowledge and skills needed for top-level roles in charity accounting and
financial management.

Reasons for joining

* There is often more flexibility in working hours, giving employees the
opportunity to work to live rather than living to work

* The working environment is often more relaxed and informal

* The ability to add value through your work and ‘give something back’

* Benefits are more family friendly

* Holiday packages tend to be more generous

* There are opportunities to become involved in fundraising and other
community related projects

* Personal/professional development is encouraged and there are often
opportunities to increase your skill set

* There is a greater emphasis on precise reporting (rather than

* The sector provides a service that people can easily relate to and

Andrew Clark is manager of the Not for Profit Division at financial
recruitment specialist FSS

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