Ethics and Governance

Opportunities and challenges in charity and not-for-profit sector

Oct 01, 2018
Trustees lend their experience to a new guide on ethics and governance. 


I have always been involved in sport in some shape or form since a very young age. If I wasn’t playing or coaching, I was standing behind the goalposts playing ball boy. Now I am the club treasurer.”

“I fell into it. A tragic accident resulted in serious injury to one of my children. We did everything we could to raise funds for the operation and, thanks to the kindness, empathy and generosity of people, we succeeded. After that, helping others and getting involved in worthwhile causes I believed in came naturally.”

These are just two responses we received from the volunteer trustees we spoke to as part of our research for the Concise Guide of Ethics & Governance for the Charity and Not-for-Profit Sector (Concise Guide), published by Chartered Accountants Ireland in September 2018. It was both a humbling and enlightening experience to meet with so many voluntary trustees across the island of Ireland as part of the research. They generously give their time, skills and energy to be involved in the governance of a charity or not-for-profit organisation. In keeping with their passion and nature of giving for the benefit of others, the participants were very forthcoming with insights, tips and sharing what their experience has taught them about being involved on the boards of such organisations. 

Opportunities and challenges

We explored the views of the research participants, also consisting of valuable input from executive and senior management from the sector, on topics related to ethics and governance. Many of these are reflected in the Concise Guide but there are two open-ended questions that are worthy of further emphasis in this article:

What are the greatest opportunities for the sector today?

What are the greatest challenges facing the charity/not-for-profit sector today?
When we collated responses from all participants, we were able to summarise them into a number of distinct opportunities. Figure 1 illustrates the results of our collation of opportunities. Figure 2 illustrates the results of our collation of challenges. 
While it is unnecessary to speak about each highlighted opportunity and challenge, as many speak for themselves, there were a few observations worth noting here:

There were no significant differences in the items being discussed between Northern Ireland and the Republic of Ireland, although it should be noted that there were a couple of considerations unique to the sector in Northern Ireland. For example,  funding concerns resulting from loss of access to EU structural funds after Brexit occurs. There was also a sense of greater collaboration between organisations in making joint funding applications and sharing resources to deliver a common purpose in Northern Ireland. 

There were concerns about organisations of a certain size and their ability to respond in a timely manner to some regulatory changes.  For example, General Data Protection Regulation (GDPR) is expected to have an impact on the fundraising activities of some charities and not-for-profits. Most research participants agreed on the importance of the regulations but expressed that, without the right skills or the resources to employ them, or right tone on the board, some organisations may struggle to comply. 

When it came to regulations and standards in relation to financial reporting, many believed once you have a handle on your requirements, it is just a matter of ensuring your accounting system is set up to capture the required data. For example, those who were transitioning to Charities SORP outlined the difficulties that can be involved in reporting on income and costs by activity and ensuring that required reserves are established, in addition to capturing and recording movements to and from these reserves. All agreed, however, that life was a lot easier once it was set up. It was interesting to observe the non-accountants wishing to be more informed about the finances and keen to have the financial reporting requirements explained to them in a non-technical manner.

Interestingly, but unsurprisingly, technology and social media were seen as both an opportunity and a threat. While this is elaborated on in the Concise Guide, it is clear that, regardless of which side of the divide you are on, technology and social media cannot be ignored.

The highlighted opportunity to ‘make a difference’ (see Figure 1) in society provided a lot of comfort on what these volunteer trustees were gathered here to do. It is why they are involved in the first place. When you combine this with the highlighted opportunity that involvement in the sector offers for personal development, it recognises the unique intrinsic reward that is only realisable in doing good for others. What other reason do you need to pat a trustee on the back this coming Trustee Week, 12-16 November 2018? Ask them why they do it and maybe their response will inspire you to want to do it, too!

Níall Fitzgerald FCA is Head of Ethics & Governance at Chartered Accountants Ireland.