The Charity Treasurer: good with numbers, agile leader, star communicator

Amidst economic pressures and geopolitical uncertainties, the role of the treasurer has become increasingly important to guide charity boards on the financial impact of their strategic choices, especially for small charities that cannot afford to employ a qualified accountant.

A board is not required to have a treasurer; however, it is a useful role as the treasurer pays close attention to the finances and can help answer finance-related questions from other trustees. The treasurer is not formally required to have an accounting qualification or relevant experience, but it may be a difficult role to undertake without this; and having a treasurer does not remove the need for all trustees to take responsibility for the charity’s finances.

However, it is often the treasurer that the other trustees look to for advice, guidance, and reassurance on all aspects of the charity’s financial management and reporting. In recent years, this has required treasurers to remain calm in the eye of the storm and to constantly adapt to the changing circumstances of the permacrisis. This is where the expertise of the treasurer shines and helps charities to connect financial realities with ambitious objectives. “A good treasurer will make sure that financial knowledge is shared and understood by the full board,” explains Alsop.

This requires treasurers to communicate the charity’s finances to the rest of the board in a way that helps all the trustees understand the information. Alsop emphasises the importance of catering the reports to the whole board so that everyone can contribute to board discussions about the charity’s finances. She recommends sharing reports in advance, including narrative and graphics and suggests paying attention to font size and colour to make financial information more accessible.

Many ICAEW members who become charity treasurers are new to charity accounting. Alsop recommends getting to grips with fund accounting from the get-go, “fund accounting is at the heart of charity accounting and is a fundamental difference to the way commercial operations are accounted for.” She warns that using restricted funds incorrectly could constitute a serious breach of trust.

It may take a bit of effort to become familiar with accounting for different funds and to understand the nuances between grants and contracts and how this distinction impacts income recognition, financial resilience and tax liabilities, but support is available to help charity trustees and treasurers. For example, you can access a free introduction to these concepts in our Trustee Training Modules (Module 3) and more detailed guidance in The Charity Treasurer’s Handbook. These sources will also demystify the concept of ‘free reserves’ and help you lead board conversations about what level is appropriate for your charity.

The role of the treasurer varies depending on the finance support provided by the charity’s staff team. Small charities often require their treasurers to be responsible for maintaining the charity’s financial records, banking matters and preparing annual accounts, whereas treasurers of larger charities (with finance teams) can focus on the strategic and advisory aspects of the role. It is therefore important that both the charity and the applicant for a treasurer role are clear about the time commitment and the scope of the role from the outset. A small training budget for treasurers new to charity accounting may be useful to help them get started, and ICAEW Charity Community members will receive newsletters that alert them of developments and access to free webinars sharing best practice on topical issues.

At ICAEW, we have seen an increase in the demand for financially skilled volunteers. Our voluntary job site, ICAEW Volunteers, now hosts over 200 new volunteering roles each month, often seeking trustees with finance expertise or treasurers. That’s an increase of 50 percent since the previous year. Fortunately, the engagement from ICAEW members has also increased but there is a risk that current volunteers cannot keep up with the rising demand unless new volunteers come forward.

Daniel Chan MBE, Chair of ICAEW’s Charity Committee, agrees that “charities are continuing to seek volunteers to help them deliver their charitable purpose, particularly people with passion who can offer a financial perspective. It’s a great way to put your professional skills and experience to wider use, and, from my own experience, it has been very rewarding personally being a charity trustee and treasurer.”

If you are feeling inspired to help, you can find plenty of opportunities on ICAEW Volunteers and on the Honorary Treasurers Forum website.

The sixth edition of this popular guide, written by Elaine Alsop ACA DChA and Professor Gareth G. Morgan, will be published in w/c 18 September 2023. Serving as a trusted companion for both seasoned and new treasurers, this book provides a solid foundation of knowledge on the wide range of responsibilities and duties of a charity treasurer. It guides the reader step by step through the different aspects of the role and delves into the nuances and peculiarities of charity finance, accounting and tax in an accessible and informative manner. This is a reliable and up-to-date resource, covering developments such as the technological advances in fundraising and relevant changes introduced by the Charities Act 2022 in England and Wales.

I was delighted to contribute to the Handbook’s foreword jointly with Daniel Chan and look forward to dipping into the chapters again and again to guide me in my own charity treasurer role.

You can pre-order your copy here.

The Charity Community brings together tools, insights and resources for finance professionals and charity volunteers, including treasurers. Its offer includes free webinars, updates on charity sector developments and practical guidance to help ICAEW members meet their CPD requirements and be effective in their roles. Explore your Community content here.

Module 3, Financial Responsibilities, of our free e-learning course covers the treasurer role and the key concepts of charity accounting and taxation, including a 10-minute video introduction, a glossary of financial terms and sample accounts. The module outlines trustees’ responsibilities in implementing and monitoring internal financial controls and explains trustees' obligations in relation to the different types of funds held by charities. Sign up here for your free training.

Often, it helps having a community of fellow treasurers that can share recommendations and hard-won lessons. Within the Charity Community, there are over 2,000 charity treasurers and our LinkedIn Group is a good starting point to connect with peers. Click here to join.

ICAEW’s regional offices also offer charity and not-for-profit insight groups where you can meet up regularly with a group of other volunteers and charity finance professionals in your area to discuss topical issues and exchange sector insights and recommendations. You can find meetings (and other charity-related events) here.

Finally, membership charity, The Honorary Treasurers Forum, was founded in 2004 to provide a source of information, research and knowledge for the treasurers of charities. The Forum provides a place where charity treasurers can come together as a community, share expertise, and promote best practice.