In a charity the money is not yours to allocate, and the board is not paid to be there.

Most advice about hiring a senior finance or operations person assumes a company: shareholders who want a return, a chief executive who decides, and cash that can be spent on whatever the plan says. A charity has none of those. The board are volunteers who carry legal responsibility, a large share of the income can only be spent on the thing it was given for, and the accounts are prepared to a framework most commercial finance people have never used.

What is different here

Restricted funds are not a budgeting preferenceWhen a funder gives money for a named purpose, that money is legally restricted to it. A charity can hold a healthy cash balance and still be unable to pay for the thing it most needs, because the cash belongs to three different grants with three different conditions. A finance seat who has only run commercial budgets will reach for the total and be wrong. The first question worth asking a candidate is how they would explain a restricted position to a trustee who is looking at one bank balance.

The accounts follow the charity SORP, not what they learned in industryCharity accounts are prepared under the Statement of Recommended Practice, with a statement of financial activities rather than a profit and loss, income recognised by when entitlement arises, and funds analysed by type. It is learnable, and plenty of good commercial CFOs learn it, but nobody learns it in the first fortnight while also fixing the cash flow.

Trustees carry the responsibility, and most of them are not accountantsThe board is legally responsible for the charity, and they are almost always unpaid. That makes the finance seat's real job translation: turning a position into something a volunteer board can act on in a two hour meeting, four times a year. A pack written for a commercial board tends to land badly, and the failure shows up as trustees asking the same question every quarter.

A reserves policy is expected, and having none is noticedThe Charity Commission expects trustees to have a reserves policy and to explain it. The number is a judgement about risk rather than a formula, and it is one of the few places where a good fractional CFO earns their fee in a single meeting, because most charities either hold too little and are fragile or hold too much and are asked why.

What to ask, that you would not ask elsewhere

Have you prepared or reviewed accounts under the charity SORP, and at which organisation?
How would you explain a restricted funds position to a trustee looking at a single bank balance?
What is your approach to setting a reserves policy, and what would move the number?
Have you presented to a volunteer board, and what did you change about the pack afterwards?
What would make you tell trustees that something needs reporting to the regulator?

Where it goes wrong

Hiring on commercial finance experience alone and assuming SORP and restricted funds are a detail. They are most of the job.
Letting the fractional seat write the reserves policy without the trustees owning it. The responsibility is theirs and cannot be delegated away.
Running one cash flow. Restricted and unrestricted need to be visible separately or the board is making decisions on a number that does not exist.
Bringing somebody in two days a week and still expecting them to attend every funder meeting. Decide what the seat is for before it starts.

Which seat you are actually hiring

The sector changes the conditions, not the job. What each seat covers, what it costs and when it is the wrong hire is set out across the eleven seat pages, and the cost calculator will tell you whether the work you have described is really a fractional one. If the job turns out to be five days a week and permanent, we find full-time executives too.

Common questions

Restricted funds are not a budgeting preference?

When a funder gives money for a named purpose, that money is legally restricted to it. A charity can hold a healthy cash balance and still be unable to pay for the thing it most needs, because the cash belongs to three different grants with three different conditions. A finance seat who has only run commercial budgets will reach for the total and be wrong. The first question worth asking a candidate is how they would explain a restricted position to a trustee who is looking at one bank balance.

What should I ask when hiring for charities and non-profits?

Have you prepared or reviewed accounts under the charity SORP, and at which organisation? How would you explain a restricted funds position to a trustee looking at a single bank balance? What is your approach to setting a reserves policy, and what would move the number?

What goes wrong when hiring into charities and non-profits?

Hiring on commercial finance experience alone and assuming SORP and restricted funds are a detail. They are most of the job. Letting the fractional seat write the reserves policy without the trustees owning it. The responsibility is theirs and cannot be delegated away.

Check it yourself

General information about hiring, not legal, accounting or regulatory advice. Charity law and reporting thresholds differ between England and Wales, Scotland and Northern Ireland. Check your own regulator and take advice on your specific position.

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