Charity Clarity

Maintaining organisational clarity for your charity

As a charity leader, it is important to ensure that there is clarity on the purpose and objectives of the organisation. When staff and volunteers have clarity of purpose, their efforts are likely to be meaningful and impactful.

Sometimes, charities can end up drifting away from their core purpose without intending to. For example, there may be one or more strong personalities whose influence shapes different priorities over time. Or a charity may ‘bend’ its purpose in order to secure specific grant funding, with a series of such decisions changing the charity’s business-as-usual activity. Whatever the reason, it is incumbent upon charity leaders to ensure that resources are aligned to achieving charitable objectives. This can only be achieved if staff, volunteers and other stakeholders have organisational clarity.

Just to be clear (no pun intended), it can sometimes be necessary to change the charitable objectives. For example, if a charity has non-primary purpose trading, it might be appropriate to broaden the charitable objectives to encompass the activity. The point is that such decisions should be strategic and deliberate, rather than incremental and unintentional. As an aside, another common way of addressing non-primary purpose trading in a charity is to set up a wholly owned subsidiary that distributes any taxable profits back to the charity at the end of the year. Of course, either of these approaches would benefit from the necessary legal and/or financial advice.

Maintaining ‘charity clarity’ is also important because charities exist for the public benefit. If there is scope creep around purpose or objectives resulting in core business that is not delivering public benefit, then there is a risk of organisations losing their charitable status. Trustees, auditors and independent reviewers are three groups of people who can provide insights on the extent to which there is charity clarity and whether resources aligned to charitable objectives.

Reflection Questions

1. Does your charity have organisational clarity at all levels? How do you know?
2. Does your charity have an annual impact report? How aligned are the charitable objectives with the charity’s impact?