Transcript Charity Finance Directors’ Group

Cash Reserves
Tina Winders
Director of Finance and Corporate Services
Locality
Background to Locality
Formed from a merger of DTA and bassac in 2011
DTA – 20 years old, bassac 80
Co-owned office building in London (funded by grants
and bank loans)
History of collaborative working
Turnover around £5m
Cash £1m, post merger & Community Organisers now
£4m
Legal Considerations
Organisations governing documents
Charity SORP
CC14 Investment of Charitable Funds
Charities Act 2011
Other considerations
Moral, ethical, social
Funder/ donor requirements
Acceptable level risk
Need to diversify
In house skills v professional advisor
Issues for Locality
Interest rates - low, lower, lowest
Credit ratings – poor or moody!
Financial Services Compensation Scheme
– worth the paper its printed on?
Governance Issues
Who makes the decision?
• Ultimately who is responsible?
• Advisers
• Sub-committees
• Board appetite for risk is key
Questions you must ask
How long can you tie up funds?
How secure is your future income?
Whose money is it?
Aim to maintain capital at current levels
or is the income crucial to balance the
books?
Types of Investment for SMEs
Clearing bank
Ethical bank
Current account
Deposit accounts
Pooled deposit funds
Interest rate swaps