According to a recent report published by City University London, up to one in three UK-based charities are unaware of their operating costs.
In a speech made at the Honorary Treasurers Forum, Mark Salway, a former finance director for an international aid organisation and current director of social finance at the Cass Business School, said he did not believe that many charities know their overheads.
He told delegates that a greater understanding was needed to protect from the possibility of more charities going through the same problems as a number of those covered in the media over recent months.
Mr Salway said: “I’ve worked with a lot of organisations that don’t know what their overheads are. Therefore, when they come to negotiate contracts they can’t negotiate properly.”
As part of the evidence he used to support his belief, he cited findings of a recent study – The Current and Future State of Charities 2015 – which stated that six per cent of charities did not even try to recover their overhead costs.
Mr Salway argued that charities need to seek advice on claiming back the money owed to them, particularly due to the fact that grant funding is becoming gradually more difficult to secure.
At Nicklin, we have in-depth knowledge and experience of working with charities and can advise on a range of issues including cash flow and budget management, ensuring that they claim back money whenever possible. For more information, please contact us.