Amnesty International's FD on the travails of charity finance

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In her own words, Nicki Deeson is an “institutionalised charity person”. The international finance director for Amnesty International has been working in the sector since 1992.

Deeson’s pedigree in the charity sector is unique. Unlike other finance professionals who work in industry and then transition over, she’s spent almost her entire career working for not-for-profits since she qualified with PwC.

“I’m not very qualified to talk about the transition to charity finance at length,” she said. “But from what I’ve seen from other people, they’re often surprised about the complexity of the charity sector.

“The Statement of Recommended Practice – the so-called charity SORP – the Charities Act, all of the financial reporting requirements placed on charities, the complexity of restricted funding and accounting for those; it’s a new set of rules and regulations to get on top of.”

And if the regulations are one thing, then the unique pressure and public exposure that comes with the finances of a high-profile charity is another. A lot of Deeson’s energy is subsumed in the challenge of presenting Amnesty’s accounts in a way that fulfils regulations, but that’s also accessible to the public.

“That’s a challenge that charities have had. Some have done great, creative things with their accounts to make them accessible to the public and also fulfil their regulatory requirements,” Deeson explained.

Amnesty International – which is a federation of different national membership bodies – raises around €280m a year globally. In the interests of transparency, the group tries to contextualise its spending by looking at the big areas of human rights. “That is, how much we’ve spent in each area versus fundraising and overheads, and what we actually achieve with our human rights spend.”

“We annually release our global financials alongside our global summary of what we’ve achieved. We tie the money to outcomes and outputs to craft a picture of the entire Amnesty movement. It’s not accurate to the pound, these aren’t audited figures, but it does give the public an idea of how much we’ve raised and spent globally.”

Charity Finance Group work

Deeson’s emphasis on financial transparency ties into her other work as chair of trustees for the Charity Finance Group. Her focus is on governance and championing its cause of creating a “financially confident, dynamic and trustworthy charity sector”.

“We have three main strands of work. One is giving financial training and capacity building across the charity sector. People come into the charity sector and might be the treasurer of a charity but they don’t have a financial background. It’s about building the skills of people responsible for finance.

“Second is about building leadership skills in charity finance people, and also building finance skills in charity leaders; fundraising directors, operations directors, chief executives also need a certain level of finance skills to manage their resources. So it’s also about ensuring great financial management is achieved all throughout the charity, not just the finance department.

“Our third focus is just creating a better charity sector. So campaigning with government around financial aspects like Gift Aid and making sure we achieve the maximum with tax and other aspects so we can attain maximum impact.”

The CFG, Deeson explained, wants finance leaders to be real leaders, not just stuck in the backroom with spreadsheets. They need to be out partnering with the charity, understanding the business and driving maximum impact.

Understand responsibilities to prevent failures

The conversation inevitably drifted to one of the more glaring charity finance failures in recent years: Kids Company, the major children’s charity which collapsed amid accusations of financial mismanagement and exorbitant overheads.

“If those FDs had been better leaders and worked better with Camilla [Batmanghelidjh, the founder and chief executive], would the results have been different?” asked Deeson.

“And also had Camilla and the management team and the trustees realised what their true responsibilities were in relation to finance and understood what great financial management means in terms of achieving great results, would there have been a different outcome?”

It’s failures like this, Deeson says, that the CFG is hoping to prevent. “The very fact that we emphasise the word ‘trustworthy’ is because it’s an issue. There are questions that the public continues to ask around overheads, charity salaries that knock their trust in the sector.

“We need to get better at answering those questions. We know that we need a charity sector that’s well managed, but that means paying decent salaries. But are we good at explaining this to the public?”

It’s a sensitive debate where benchmarking against other charities has helped tremendously, said Deeson. She used the CFG’s benchmarking survey called Finance Count. “We did it a few years ago, and it gave us an argument to say ‘we need a bit more resource here’.”

For Deeson, it’s a question of being effective. The charity sector has stepped into space where the government is reducing its input, and achieving maximum impact will mean employing talented people.

“People always have a high degree of trust in nurses and teachers. The charity sector used to be high up in that graph,” said Deeson. “And while it hasn’t fallen as low down as politicians and the media, the charity sector has a lot of work to do.”

About Francois Badenhorst

Francois

I'm AccountingWEB's business editor. Feel free to get in touch with comments, tips, scoops or irreverent banter. 

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