Are your accounts letting you down?

In recent weeks, we have seen several clients struggling to raise funds from grant makers because of issues in their accounts. These have included high reserves, high operating costs and deficits. These can be killer issues for many funders, who will scrutinise your accounts to make sure you are soundly run and are offering best value. If they spot issues they do not like, they will often reject your appeal out of hand, without asking for an explanation.

So what can you do? If your accounts are showing any difficult issues, you need to explain these properly. All too often, accounts are put together by a charity's accountants with no reference to the fundraising team or any understanding of their impact on funding.

So the first thing to do is to raise any difficulties with your finance manager to explain the issues. For your next set of accounts, ask if you can have sight of them before they are signed off and have the opportunity to add to the notes explaining any items that may raise eyebrows. You can also suggest designating a portion of free reserves for specific purposes, which may help to reduce the impression of high reserves, if this is a problem for your charity. Basically, anything unusual needs to be fully explained and justified. Do not just hope that funders will not spot it (they will!). So there are things you can do to improve your next set of accounts to use in fundraising.

What, however, if you are already working with a very difficult set of accounts and will have to wait months before your new ones are produced? Here, you may need some help in preparing a supporting statement to aid fundraising. This is a short document that picks up any unusual items in the accounts and explains them carefully, so that funders get a proper picture of your finances. This can then be appended to the accounts and sent with your appeals to head off any difficulties. It is not a foolproof solution, but can sometimes make all the difference between success and failure.

If you would like advice or support in preparing such a statement, please contact us on 01903 723519.