Click on any of the A to Z letters at the top to see the words or phrases beginning with that letter. Click on the actual word or phrase to see its meaning.
annual report, annual review
board of trustees
Charitable Incorporated Organisation (CIO)
Community Interest Company (CIC)
contract of employment
corporate responsibility, corporate giving
costs: direct costs
costs: fixed costs
costs: indirect costs
costs: recruitment costs
costs: recurring costs and set-up costs
costs: running costs
costs: unit costs
costs: variable costs
Data Protection Act
costs: direct costs
Financial Services Authority
full cost recovery
income and expenditure accounts
Index of Deprivation (IOD)
industrial and provident societies(IPS)
joined up thinking
LDA local development agency
Memorandum & Articles
non-profit, not for profit
qualitative and quantitative
receipts and payments accounts
costs: recurring costs
Registrar of Friendly Societies
service level agreement, SLA
staff development and management
strategy, strategic planning
terms and conditions
value for money
accountabilitytop of A-Z
If you are accountable you have to give an account or answer for your actions to someone. This may be formal, like when a Management Committee reports to the AGM or Councillors stand for re-election. But there are many other things that help organisations be 'held to account' by all the different stakeholders involved. These include: when and where meetings are held, how accessible reports are, whether there is regular contact between senior staff or trustees and users of services.
accountstop of A-Z
Accounts are a way of 'giving an account' of what has happened financially. They can cover any period. Most organisations have to produce annual accounts. These are usually drawn up after the end of the financial year and should give a full and clear picture of both the organisation's transactions during the preceding year and its financial position at the end of it. These accounts are often presented to an organisation's Annual General Meeting. Registered charities may have to send their annual report and accounts to the Charity Commission every year and registered companies have to make a similar annual return to Companies House.
There are two basic ways of doing accounts: Accruals accounting which shows income and expenditure (or in the case of registered charities provides a Statement of Financial Activities (SOFA)) over a period, or receipts and payments accounting. Accrual accounts should include a balance sheet and notes to the accounts, whereas receipts and payments accounts should include a statement of assets and liabilities. Accounts are often professionally audited or independently examined. Bigger organisations often produce monthly or quarterly management accounts for use within the organisation. These are not independently examined.
Don't think of your annual accounts just as figures. You really are providing 'an account' of what's gone on and you may need to explain what the figures show. The Charities SORP requires a 'narrative' to the accounts which does just that.
accruals, accruals accountingtop of A-Z
Accrual accounting is based on the concept that any money earned by an organisation must be matched with the costs that were incurred to generate that income, and that both are included in the same period of accounting. So for example the costs of holding the jumble sale are balanced against the income it generated and both costs and income appear in the same set of accounts. This allows accounts prepared on an accruals basis to show a "true and fair" view of an organisation's financial activities.
Accounts prepared on a receipts and payments basis are less sophisticated and easier to prepare. They are also often easier to understand.
added valuetop of A-Z
The value added by your activity. A chef 'adds value' to food by cooking it, which is why we are prepared to pay more for the cooked meal than the raw ingredients. In the business world, activities are examined to see how much value they add to the product that gets sold. The phrase has become fashionable in the voluntary sector, though it's often used rather loosely.
additionalitytop of A-Z
Particularly important where funding from the National Lottery is concerned. Lottery money is supposed to be 'additional' to ordinary spending by the government, not a substitute for it. So if a voluntary organisation wants Lottery money to provide a service which government has a statutory obligation to provide (like basic education or health care, for example), the application may be turned down.
aimstop of A-Z
One of the words used to describe what an organisation intends to do. Often used with 'objectives' in the phrase 'aims and objectives'.
animateurtop of A-Z
Someone paid to initiate a particular project or drum up interest in a particular activity. A dance animateur might work with local youth clubs to develop young people's interest in dance.
annual report, annual review
The phrase 'annual report' can be confusing. It has a technical meaning in 'annual accounts and report' (when it is sometimes called the statutory report) but it is also used casually, sometimes as shorthand for 'annual review'.
Charities are required to prepare accounts according to the Charities SORP (Statement Of Recommended Practice). The SORP requires there to be a narrative report as well as the figures themselves. The report must include certain things, such as: the organisation's name and address, charity registration number (if it has one), company registration number (ditto), its objects, the names of trustees during the year being reported on, a description of the organisation's structure, and a brief summary of the main activities and achievements during the financial year, explaining how well the organisation has met its objectives. Bigger charities have to include more and their report on activities has to be a fuller one.
Many organisations choose to publish a document - often presented to an Annual General Meeting - which is wider in scope than the statutory report. It may be seen primarily as a fundraising tool or a way of being accountable to users rather than a way of accounting to the Charity Commission or Companies House. It may include detailed accounts, but (with big organisations especially) may just have summary accounts. It is often then called an Annual Review.top of A-Z
annual returntop of A-Z
A phrase used by both Companies House and the Charity Commission to describe the form they require companies/charities to fill in every year and return. Often the Annual Return is sent back with the organisation's annual accounts and report.
assetstop of A-Z
Fixed assets are things like equipment or property that you would have to sell in order to get any money. Inexpensive bits of capital equipment (like staplers or waste-paper bins) aren't usually counted as fixed assets.
Current assets are money in the bank and any money owed to you.
audit, auditortop of A-Z
An audit is an examination of something, a reckoning, a writing down of what you've got. A social audit is when you examine what non-money resources you receive and use. Accounts are audited when they've been examined in a certain defined way.
An auditor is not the person who 'does the books'. He or she is an independent person who examines the accounts and then states that they give a true and fair view of the organisation's finances or that the accounts are consistent with the financial records. Just to complicate things, however, the law distinguishes between accounts that have been professionally 'audited' (by an auditor) and those that have been 'independently examined' (by an independent examiner). Company law and charity law provide rules about how an audit must be conducted and what an auditor must do. An auditor needs to be professionally qualified (an accountant) but not all accountants are able to carry out all types of audit.
audited accountstop of A-Z
A statement of your organisation's finances, usually for your last full financial year, which has been drawn up by a qualified auditor.
If the auditor believes the figures to give a true and fair account of the organisations financial state, he or she declares them to be true. If he or she doesn't have enough information to go on or believes there's something false about the figures, he or she 'qualifies' the accounts.
Charity law requires charities with a certain level of income (�10,000 in 2006) to have their annual accounts professionally scrutinised. If the income or expenditure is over �250,000 (at 2006), the accounts must be audited by a registered auditor. (Below that, organisations can opt for an independent examination). Even if there is no legal requirement to do so, funders sometimes insist that accounts be audited. In these circumstances it may be worth checking out exactly what they mean - independently examined accounts may be acceptable.
balance sheettop of A-Z
A snapshot of the value of an organisation at one moment in time, usually at the end of the last day of its financial year. It shows Assets (money, property, the money others owe it and expenditure relating to the next financial year), Liabilities (commitments and debts, and income relating to the next financial year) and Net Worth (assets minus liabilities). Income and expenditure relating to the previous financial year is not shown in the current year's balance sheet.
Although a balance sheet 'balances' because the Net Worth is always equal to Assets minus Liabilities, the name refers to the fact that a balance sheet shows balances taken from other, more detailed accounts.
baselinetop of A-Z
If you measure the conditions before you start to try and change things you create a 'baseline'. As your project goes on you can measure again and see how much things have changed.
benchmarkstop of A-Z
Benchmarks are a measure. Often what is considered excellent or best practice is the 'benchmark' by which other initiatives are judged.
beneficial areatop of A-Z
Where a charity may spend its money, or carry out its work. Every charity has a governing document which, amongst other things, sets out its beneficial area. This area might be as wide as the whole world or as narrow as part of a parish.
beneficiarytop of A-Z
Someone who gets the benefit of an activity or a service, or who receives money from a charity.
benevolenttop of A-Z
Benevolent means 'wanting to do good'. Many of the charities set up to help people in particular trades or professions are called Benevolent Societies.
Best Valuetop of A-Z
Local councils have to secure the 'best value' they can when they are providing services or contracting others to provide them. They have to challenge why and how a service is provided; compare services with others and consult with users and other relevant people.
Best Value is supposed to be different from Value for Money because councils don't just have to go for cheapest option.
BMEtop of A-Z
Black and Minority Ethnic
board of trustees, management committees etctop of A-Z
The people who are responsible for the overall governance of a charity are legally its trustees, and so a Board of Trustees is the set of people who are responsible in law for the running of a charity. They might actually be called a Management Committee or an Executive Committee or a Board of Directors or a Council or some other word.
The question of whether members of a Board (or Committee or whatever) can receive benefits is something of a grey area if the organisation is a charity. The basic principle is that the Board of Trustees shouldn't particularly benefit from their position (though they may be users of the organisation's services). Although trustees who provide professional services (lawyers who provide legal advice, for example) can be paid for the specific service, trustees are not normally paid. The Chair and other officers are often called 'honorary' officers, to distinguish them from paid officers (i.e. staff). Members of Boards of some other non-profit agencies - Health Trusts, for instance - are paid. If they're not charities, organisations can be non-profit distributing and pay their Board members.
Another 'grey area' is the position of staff on Boards or Management Committees if the organisation is a charity. Again the general principle is that staff should not be trustees. They should simply advise the Board. In reality the line between advice and decision-making is often blurred.
break eventop of A-Z
If you break even your income is the same as your expenditure. You haven't made a loss and you haven't made a surplus.
budgettop of A-Z
A forecast of the income and expenditure needed to carry out a project, or run an organisation, for a given period of time. Also known as a financial projection, or as 'estimates'.
What makes a business plan different from other sorts of plans (e.g. strategic plans) is that a business plan has detailed and specific financial information and financial forecasts. It is supposed to be a plan for the organisation as a whole, not for a particular project.
Different funders may have different expectations of the detail they want to see in a business plan. Smaller organisations may find their business plans are less complicated than those of bigger organisations. Some of the key elements that are likely to be in any business plan, however, are:
1. Where are we now? A description of the values, assets, activities, staff, expertise and experience of the organisation. Many groups use SWOT and PEST analyses to help describe their current situation.
2. Where we want to get to? A description of the overall purpose of the organisation, and its objectives for the next 3, or even 5 years
3. How do we get there?
the strategies (finance/fundraising, staffing, IT, marketing) needed to gain the objectives
the resources required - staff, skills, training, money
financial and cashflow projections (detailed in the first year, more of an outline in years 2-3, etc.).
Some organisations view a Business Plan as something you do once to get the money and then never look at. Others see it as an essential management tool, using and revising it regularly.
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capacity buildingtop of A-Z
A phrase that gets used a lot but means all sorts of things to different people. Schemes that aim to 'build capacity' are about ensuring that communities (and the individuals within them) are able to take advantage of economic and social opportunities - that they have the right attitudes and skills to do things.
capitaltop of A-Z
A word that is used in a variety of ways. Often contrasted with revenue. In this sense, capital spending is spending on capital assets (things you could sell) - buildings, vehicles, equipment, for example - whereas revenue spending is spending on things that get consumed - salaries, rent, electricity. In accruals accounting, capital assets are shown in the balance sheet; in receipts and payments accounting, capital assets are shown on a statement of assets and liabilities.
How money flows through the organisation. If you have to spend money (e.g. on wages or set-up costs) before you actually get it, you have a cash-flow problem.
Work out the cash-flow when you create a budget for your project. Think about the practical things that have to happen, and commitments you have to make - recruiting staff, sorting out premises. Think about possible delays and the costs.
A simple cash-flow projection shows a starting position (which might be nothing) and then, month by month, what money you think will come in and what money you think will get spent. Each month you bring forward the balance from the end of the previous month.
You can try to solve cash-flow problems by
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getting paid earlier - the best solution if the funder will agree
borrowing money (from a bank, for example) - but interest on the overdraft you negotiate could be expensive and funders will want to pay for activities, not bank interest.
catalysttop of A-Z
Someone - or something - that sparks activity where previously there was none, or gets other groups to interact with each other. Many funders like to give grants to something that in turn makes all sorts of other things happen; they feel they are getting more for their money. Grant-seekers therefore sometimes stress that their project will be a catalyst. Similar to saying a grant will 'lever' other money or have a 'multiplier effect'.
CEOtop of A-Z
Chief Executive Officer. The paid head of an organisation.
Charitable Incorporated Organisation (CIO)top of A-Z
A legal structure for charitable organisations in England and Wales that will provide the benefits of incorporation without the organisation having to become a registered company. The Charities Act 2006 provides the legislation for establishing this legal form.
To become a registered charity (in England and Wales) or be recognised as charitable by the Inland Revenue, an organisation has to have charitable objects. Objects means 'objectives' or 'aims'. The document that establishes a charity has to say what the objectives of the organisation are, not just who can be a member or what the rules are.
Exactly what objectives are accepted as charitable is something of a muddle so if in doubt, seek advice. There have traditionally been four recognised 'heads' of charity:
and other things beneficial to the community.
The Charities Bill just agreed by Parliament (autumn 06) will change these four charitable purposes into 13:
- prevention or relief of poverty;
- advancement of education;
- advancement of religion;
- advancement of health or the saving of lives;
- advancement of citizenship or community development;
- advancement of the arts, culture, heritage or science;
- advancement of amateur sport;
- advancement of human rights, conflict resolution or reconciliation or the promotion of religious or racial harmony or equality and diversity;
- advancement of environmental protection or improvement;
- relief of those in need by reason of youth, age, ill health, disability, financial hardship or other disadvantage;
- advancement of animal welfare;
- promotion of the efficiency of the armed forces, or of the efficiency of the police, fire and rescue services or ambulance services;
- and other purposes currently recognised as charitable and any new purposes which are analogous (similar) to another charitable purpose.
The Bill also has more requirements for charities to show how what they do has 'public benefit'.
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charitable statustop of A-Z
In England and Wales charitable organisations can register with the Charity Commission and are given a registration number. They are then called registered charities and appear on the Register of Charities. Some charities (mainly very small charities, some places of worship and some religious charities) are excepted from registering. Certain organisations that register with certain other bodies (like some Industrial and Provident Societies registering with the Financial Services Authority) have charitable status and are treated like registered charities for tax purposes but are exempt from registering with the Charity Commission. Excepted and exempted charities do not have a charity registration number.
The Charity Commission produces a useful leaflet, CC21, on Starting and Registering a Charity.
Many funders are reassured if a group has charitable status. Charitable trusts and foundations can only use their money for charitable purposes and may decide (or may be obliged by their trust deed) to restrict their giving to registered charities. This can cause difficulties for exempted and excepted charities since they can't quote a charity registration number. Charitable
organisations that are not themselves registered sometimes ask another (registered) voluntary group (like a Council for Voluntary Service) to accept grants from charitable trusts on their behalf.
charitable trusts and foundationstop of A-Z
Charitable trusts and charitable foundations (basically the same thing but 'foundation' is the word used in America and has become fashionable here) are most commonly organisations set up to make charitable grants in a tax-effective way. They are often set up by rich, philanthropic individuals or companies. A trust deed sets out what the trust's money should be used for. A group of trustees (who don't themselves benefit) are responsible for ensuring that the money is spent properly. Endowed trusts and foundations have an 'endowment' - money that can't be spent but is invested. This generates interest, which is the trust's income.
Some charitable trusts and foundations do things - run programmes, manage activities - just like other voluntary organisations but most don't. All they do is make grants.
Charity Commission for England and Wales
The Charity Commission is the part of government that (in England and Wales) registers and regulates charities. They produce useful free publications and 'model' governing documents. If you use their documents as the basis of your constitution, Memorandum & Articles or trust deed it speeds up the registration process.
Most of their publications are available in English and Welsh and can be downloaded from their website.
Go to www.charitycommission.gov.uk/publications
Four of them:
SG1 - Registering as a charity
SG2 - Administration for charity trustees
SG3 - Financial Management for charity trustees
SG4 - Resolving Charity Disputes
are available in 9 community languages: Urdu, Gujerati, Bengali, Somali, Vietnamese, Kurdish, Arabic, Cantonese and Welsh.
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commissioningtop of A-Z
The whole process of establishing what needs there are, deciding what services there should be and who should pay for them, and getting the right organisation to provide them, usually in relation to local statutory money (for instance, local authority and health authority money).
The government believes that all stakeholders, including users of services, should have a role in commissioning.
community fundraisingtop of A-Z
A phrase often used to describe the kind of fundraising that groups do in their community: jumble sales, sponsored events and so on.
community group, community sectortop of A-Z
The community sector is made up of community groups. The members of a community group are mostly people from a specific community and the group is often informal and has no paid workers. In contrast the 'voluntary sector' is made up of voluntary groups, which are usually formally constituted and may not be rooted in any particular community. Just to be confusing, sometimes the phrase 'the voluntary sector' is used to mean both voluntary and community groups.
Community Interest Company (CIC)top of A-Z
A CIC is a new (from 2005) legal structure appropriate to social enterprises. Essentially the organisation is a company, governed by company rules, but in addition the assets of the organisation are 'locked' - they must be used for the benefit of the community. CICs can't be charities as well. CICs are regulated by the Regulator of Community Interest Companies. For more detail see www.cicregulator.gov.uk.
compacttop of A-Z
An agreement between two or more parties setting out how they will work together to achieve common aims. Probably not binding in law, unlike a contract, usually more a statement of good intent rather than anything specific. The government has a 'compact' with the voluntary and community sectors, called Getting it right together. Local authorities have developed local compacts with their local voluntary and community sector.
Companies Housetop of A-Z
Companies House is the official UK government register of companies. Companies limited by guarantee or limited by shares are on the register and have to make an annual return to Companies House. They also have to notify Companies House of changes to directors, company secretary or change of address.
Company Secretarytop of A-Z
This is a technical term. Every company registered under the Companies Acts must have a Company Secretary. He or she may also be (but does not need to be) a Director of the company.
The main tasks of the Company Secretary are to take responsibility for any contracts the company enters into and to ensure that the company and its directors comply with the Companies Acts and other relevant legislation - particularly as regards: meetings; resolutions; returns and notifications; minutes; registers of members and directors; and the safe-keeping of documents.
consultanttop of A-Z
An outside expert brought in to solve a problem or exploit an opportunity.
contingency fundstop of A-Z
A phrase used to describe money put on one side to deal with things that might happen - like sick pay to staff or building repairs.
contracttop of A-Z
An agreement between two parties where one offers something in return for 'consideration' (often money) and the other accepts. Contracts are binding and subject to law. Charitable grants are usually not thought to be contracts.
contract of employment
There is a legal, contractual relationship between an employee and employer from the moment a job is offered and accepted, even if there is nothing on paper. However the law requires employers to give virtually all employees a written statement of employment particulars as well, which must cover:
- the full name of the employer and the employee;
the title of the job or a brief description of the work;
the place or places where the work is to happen and the address of the employer;
the date the employment began;
details about the salary (amount, pay scale or way of calculating pay, other benefits, when paid);
the hours of work - explaining what normal working hours are;
what the holiday entitlements are.
There are a number of other things that a written contract should or could include: sickness and maternity arrangements; leave and time off; trade union rights; termination of employment; disciplinary and grievance procedure; intellectual property rights; internal policies on health and safety, smoking, equal opportunities, relationships with the media, childcare, car use. Sometimes organisations produce a staff handbook to cover these matters.
Funders will expect organisations they fund to follow good employment practice - and to be able to demonstrate that they do. Clear contracts, along with good procedures for managing and developing staff, can do this.
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core costs, central costs
The costs of keeping the organisation going, not directly connected to any particular project - e.g. administration, management, research and development, audit, HQ costs, IT and finance costs, administrative, personnel and training charges, insurances. Sometimes called 'central' costs.
A recent influential report suggested that for many charities these central costs included
- the costs of compliance - with regulatory and funding bodies
- the costs of income generation
- the costs of responding to consultation
- the costs of governance, representation and user engagement, the costs of support services, and
- the costs of innovation and quality.
When it comes to using phrases like 'core costs', central costs' or 'overheads', make it clear what is included and what isn't. If in doubt, spell it out. You might want to refer to the funding models described below.
The report on the funding of core costs offered three models for funders:
- full project funding
- the development model
- the strategic model
These models are beginning to be used by funders and it may be useful to grant-seekers to write a budget for a funder in terms of one of these models.
Full project funding
In this model, each 'project' that an organisation seeks funding for has associated with it an appropriate proportion of the organisation's overheads. You would need to explain on what basis you were dividing up your core costs. Central government has made a commitment to full cost recovery.
This is seen as funding to help an organisation grow and develop in a particular direction. It is capacity building fundraising. The funder would fund all the costs associated with the initiative. You would need to explain exactly what the expected outcomes would be and ensure there were ways of monitoring and evaluating progress.
The strategic modeltop of A-Z
Strategic funding is when funders support an organisation either because there is synergy between their overall objectives or because they support the organisation's objectives. It is funding that is not tied to a specific project or initiative. Think of it more as a partnership rather than the giving and receiving of a grant. Funders are unlikely to adopt this model unless there is a very close fit between their objectives and yours and both parties are involved in setting the goals and reviewing progress.
core fundingtop of A-Z
A very woolly term. Some people use 'core funding' to mean funding of the core mission of the organisation, as opposed to funding ancillary projects. Some people use it to mean funding of administration, as opposed to service delivery. Some people use it to mean continuous funding as opposed to time-limited funding.
Not only is the term woolly, it also attracts lots of argument and debate. Some people argue that the idea of 'core funding' is unhelpful and old-fashioned and doesn't help groups justify why they should get funding at all. They suggest that voluntary organisations should see everything in terms of 'project funding', either with each 'project' contributing to the core costs, or the core activities themselves being seen (and sold to funders) as projects. Other groups try to fund their core activities out of income they get directly from the public or they earn themselves. It's probably best to talk about the funding of core costs (above) than 'core funding'.
corporate responsibility, company givingtop of A-Z
Companies often give money to good causes or help them in other ways (gifts in kind or use of meeting rooms, for instance). When this is done formally - particularly by big companies like supermarket chains or petrol companies or banks, it's often done by a 'Corporate Responsibility Department' because companies feel they have corporate responsibilities to the environment they operate in and the communities their employees come from.
Company giving is often contrasted with sponsorship, which may be undertaken for much more commercial reasons.
costtop of A-Z
The cost of something (in terms of money or time or other resources) can in theory be worked out objectively. This is in contrast to price, which is determined by the person selling.
cost centretop of A-Z
A systematic way of allocating income and expenditure to different activities. Each different activity is allocated its 'share' of (for example) salary costs.
cost effectivetop of A-Z
Can just mean 'as cheap as possible'. If you ask yourselves whether you can achieve the desired outcome by any cheaper method and come up with the answer 'No', then something is cost effective.
Sometimes it's used to mean you get a lot of output (or outcome) for a little bit of spending.
costs: direct coststop of A-Z
Direct costs are costs directly related to the activity, such as the staff who work on that project, their expenses, the hire of the hall for the event.
costs: fixed coststop of A-Z
Fixed costs you have to pay regardless of how much or how little activity you carry out. For example, you may have to insure equipment or pay rates whether you do anything or not.
costs: indirect coststop of A-Z
Indirect costs are costs not directly related to the activity, but still incurred by the organisation, and without which the activity wouldn't happen i.e. a share of the costs of managing and administrating the organisation.
costs : on-coststop of A-Z
Usually taken to mean the costs that follow on from employing staff - e.g. National Insurance, share of office costs, travel, training, management/supervision.
costs : recruitment coststop of A-Z
Recruitment costs can be significant. If the funding you are requesting is for staff, think through everything involved: advertising a job, preparing and sending out information (job description, person specification, information about the organisation) to applicants, shortlisting, interview costs. What if you fail to recruit first time? Might you need to recruit more than once during the life of the project?
Recruitment is an area where funders will expect to see evidence of a commitment to equal opportunities.
costs: recurring costs and set-up coststop of A-Z
Some costs are non-recurrent, i.e. you only have them once, especially near the start of a project, hence often called set-up or start-up cost e.g. recruitment, minor fitting out of offices, telephone connection charges, a feasibility study.
It's worth separating them out from the recurrent costs - the ones that keep coming back - salaries, utilities, rent - so that you can predict what your costs will be in future years.
costs: running coststop of A-Z
A vague term usually taken to mean the costs of running an organisation or a project. If you use the term state clearly what this does and does not include - salaries? all direct costs? indirect costs?
costs: unit coststop of A-Z
'Unit' in this phrase means 'one' as opposed to many, so the unit cost means 'the cost of one'. For example if you get 100 pamphlets printed at a cost of �300, the unit cost (the cost of producing each one) is �3.00. If it costs you �500 to have 1,000 of the same leaflets printed, the unit cost has fallen to 50p.
costs: variable coststop of A-Z
Variable costs go up or down depending on how much activity you carry out. Things like photocopying, travel, childcare expenses and stationery are likely to vary according to what you do.
covenantstop of A-Z
A covenant is a promise made in a formal way. It is the word used to describe a tax-effective way of giving to a charitable organisation. The donor promises to pay a certain amount of money (from which tax has already been deducted) over a minimum of four years. The charity reclaims the tax (at the standard rate) from the Inland Revenue. If the donor is a higher-rate tax payer, the donor too can claim some tax back.
creditorstop of A-Z
The people that you owe money to. On a balance sheet contrasted with debtors - these are the people that owe you money.
The standards or characteristics required by somebody judging something. With funders, their criteria are the 'rules' about who can apply. One funder's criteria, for example, might be that applicants have to be a national organisation and have to work with older people.
The word criteria is plural. One requirement is one 'criterion'.top of A-Z
Data Protection Acttop of A-Z
Under the 1998 Data Protection Act, which came into force on March 1st 2000, all organisations (whether registered with the Information Commissioner or not) have a duty to deal with personal information (information about living, identifiable individuals) fairly and lawfully. This means, as a minimum, informing 'data subjects' of the fact that you hold information about them, telling them what that information is, and how you use it or intend to use it.
The Information Commissioner is at:
Cheshire SK9 5AF
information line 01625 545745, switchboard 01625 545700
debtorstop of A-Z
On a balance sheet, debtors are the people that owe you money. The people you owe money to are called creditors.
deficittop of A-Z
If you spend more than you receive over a given period the difference is a deficit. It is the opposite of a surplus. Deficits are often shown in brackets or with a minus sign
depreciationtop of A-Z
Things fall apart and lose value, even capital assets. A few months after you've bought it, a computer is worth considerably less than what you paid for it. If you produce accounts that put a value on your capital assets, you need a way of calculating what that ever-decreasing value is. Depreciation is an accountant's way of doing this. It only vaguely corresponds to what you might get for the stuff if you really tried to sell it.
There are two ways of doing depreciation. In one something loses value until it is worth nothing; in the other something loses a percentage of its value every year, worth less and less but never reaching zero.
If you depreciate something until it is worth nothing, you first decide over how many years you are going to depreciate it. If you think the life of a new photocopier that cost you £1,000 is 5 years, you depreciate it over 5 years. So after a year you have an asset worth £800, after two years you have something worth £600, after three years £400, and after four years £200 and after five years your photocopier is, on paper, worth nothing. You might do the same thing but set a 'scrap value' instead of 'nothing' to end up with. This method of depreciation is called straight-line depreciation.
Organisations often choose to put an equivalent sum (£200 in this example) into a special fund every year, so that at the end of the period they have in theory saved up enough to buy a new photocopier.
If you used the percentage method of depreciation, which is called reducing-balance depreciation, you might say that your photocopier was going to lose 20% of its value each year. After the first year its value would be £800. After the next year it loses 20% of £800 (£160), so its value would be £640. After the third year it loses 20% of £640 (£128), so its value would be £512. After the fourth year it loses 20% of £512 (£102.40), so its value would be £409.60. And after the fifth year it loses 20% of £409.60 (£81.92) so its value would be £327.68. You go on like this indefinitely because although it loses value each year, it is always worth something.
disseminationtop of A-Z
Literally spreading the seed. So it means telling other people about something: writing it up, distributing the video, holding a conference, or going to talk to other groups, for example.
earned incometop of A-Z
Income from contracts, sales and/or fees - not from grants and donations. Some funders see a proportion of earned income as evidence that the group is dynamic and enterprising, that it offers services others value and that it has business-like management.
economytop of A-Z
One of its meanings is keeping the total cost of an activity as low as possible. Economy, Effectiveness and Efficiency are referred to as 'the 3 Es'
effectivenesstop of A-Z
Effectiveness is about how far your stated objectives have been met. It takes into account the longer-term impact of an action. You distributed a leaflet about safer sex to every young person in the area. You may have been very efficient, but you will only have been effective if your leaflet helps change the way young people behave.
efficiencytop of A-Z
Efficiency is about how well available resources are used. Economy, Effectiveness and Efficiency are referred to as 'the 3 Es'.
Most funders will want to see that the organisations they give grants to have a commitment to equal opportunities. By this they will probably mean that the organisation has
- fair employment and management practices which don't discriminate against people on the grounds of (at least) ethnicity, gender, age and disability and (possibly) sexual orientation and caring responsibilities for others; and
- actively ensures that the services it offers don't discriminate either.
Many funders will expect groups to have a written equal opportunities policy. They may also look at the membership of the organisation, the composition of its Board or Management Committee, the language used in the annual report and other publications, and the sorts of people that use its services for evidence that the group has thought about equal opportunities issues.
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An assessment of an organisation or project, sometimes done by the people involved (in which case it's called self evaluation), sometimes by an independent person or agency. Often, evaluation is based on the results of monitoring. The evaluation might look at
what impact the work has had
what progress has been made towards achieving the aims and objectives of the work
how satisfied are users or others involved.
It usually works best if evaluation is built in at the start of the project, rather than bolted on as it nears its conclusion.top of A-Z
To be useful, evaluations either have to tell organisations what they don't already know, or help them come to terms with what they know or suspect - but can't say themselves. In both cases thought has to be given to who is actually going to use this evaluation, and how.
executive agencytop of A-Z
One kind of Non Departmental Public Body (NDPB) set up by government departments. The Prison Service is an executive agency of the Home Office, for example.
exit strategytop of A-Z
Usually used to describe a plan for managing and financing a project or service when some particular bit of funding comes to an end. If a project doesn't have a natural end, funders often want assurance that a project is sustainable or that someone else is prepared to take on the responsibility before they commit money.
expenditure, resources expendedtop of A-Z
Expenditure is sometimes just used to mean 'money spent', but is used technically in Income and Expenditure (accruals accounting) to describe all the revenue spending relating to a particular period of time.
Charities preparing a Statement of Financial Activities have to show all resources expended - money expenditure and also the value of donated goods, services or facilities used.
Funders may want proof - or at least good evidence - that a large project is feasible before investing large sums of money in it.
A feasibility study should make clear the conditions under which a project is feasible. It can involve
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looking at the experience of similar enterprises,
thinking through practical problems,
making projections about level of use, resources required, how income will be generated in future and sustained, necessary co-operation from other agencies, and
specifying the management and organisational requirements.
Financial Services Authoritytop of A-Z
Since 2001 the Financial Services Authority has registered 'mutual' organisations: industrial and provident societies, friendly societies, building societies and credit unions.
financial yeartop of A-Z
For accounting purposes, organisations have a financial year. At the end of the year they produce annual accounts. In the voluntary sector very many organisations have a financial year that runs from 1st April to 31st March.
Reserves are your savings and free reserves are those that your organisation is free to spend on anything it likes.
If you have been given a one-off grant to do a particular thing and you haven't spent it all, the money may show up in your accounts as a surplus. But you can't spend it 'freely'. The Statement on Recommended Practice (SORP) on Accounting for Charities requires charities to show this kind of money in their accounts as a restricted fund.
Other money (even funds you have 'designated' for something in particular) are sometimes considered free reserves by funders.
Some funders consider a year's running costs as the maximum appropriate level of free reserves. top of A-Z
full cost recoverytop of A-Z
Full cost recovery is the principle that organisations - particularly those contracted by government to provide a service - should be able to 'recover' (be paid for) the 'full cost' of providing the service. The full cost includes all the relevant overheads. Advice is now available about how to allocate overheads so that a funder is asked to pay the appropriate proportion. See www.fullcostrecovery.org.uk
funding strategytop of A-Z
A way of thinking ahead about the money your organisation needs and how you're going to raise it.
Gift Aidtop of A-Z
A tax-effective way of making a one-off gift to a charity.
governancetop of A-Z
The very highest level of power and responsibility in an organisation - the Board of Trustees or Management Committee, for example. Governance is concerned with guarding the values and purpose of the organisation, setting direction and policy, acting as a final court of appeal for internal disputes and overseeing management, but not getting involved in day-to-day matters.
governing document or governing instrumenttop of A-Z
The written rules which set out the purpose of an organisation and how it should be run. If the organisation is an unincorporated organisation, the document will probably be called a constitution. If it's a registered company, the rules will be called the Memorandum and Articles of Association. If the organisation has been set up as a trust, the rules may be called the trust deed. If the organisation is an IPS (Industrial and Provident Society), the word used will probably be rules.
granttop of A-Z
A gift of money to support an organisation or an activity. A grant is not a contract; there is no legal obligation on the recipient to provide a particular service or product.
hubstop of A-Z
'Hub' is a fashionable word at the moment and there are many hubs. In particular, the government's ChangeUp programme is partly being delivered through hubs. There are six 'national infrastructure' hubs established to provide expert advice information and help for voluntary and community organisations in areas that are crucial to their success: governance; ICT; performance improvement; workforce development; volunteering; and finance. Look at the website for all six for details.
in kind (gifts, help)top of A-Z
Something other than money. A company that gives you some redundant office equipment or a prize for your raffle is giving support in kind rather than in cash. Volunteers that give their time to an organisation are giving support in kind.
income, incoming resourcestop of A-Z
Like 'expenditure', income is used in everyday speech but is also used technically in accruals accounting to describe all the money received relating to a given period.
Charities preparing a Statement of Financial Activities (SOFA) have to show all incoming resources - money and also the value of donated goods, services or facilities.
income and expenditure, receipts and paymentstop of A-Z
Accounts that show Income and Expenditure for a given period are prepared on an accruals basis. They give an account of all the money received and paid out relating to activities that took place during the period. So they do not show (for instance) money received that relates to the preceding year's activities, nor do they show money paid out for goods that will be delivered in the following year. Income and Expenditure accounts are always accompanied by a balance sheet. In the commercial world they are called Profit & Loss accounts.
Receipts and Payments accounts are thought to be easier, and small charities (income and expenditure less than £100,000) are allowed by the Charity Commission to use this system of accounting if they wish. Receipts and Payment accounts show all the cash transactions that happened during the period, regardless of which financial year they relate to. If you produce these sorts of accounts you should also produce a statement of assets and liabilities.
incorporated organisationstop of A-Z
An organisation becomes a 'body' in its own right and is described as 'incorporated' if it becomes a registered company or an Industrial and Provident Society or is incorporated under statute or royal charter. An incorporated organisation can hold property or land or investments in its own name and the liability of the people who are responsible for the organisation can be limited.
If voluntary organisations decide to become a company, they usually become a 'company limited by guarantee' rather than a company with shares (the appropriate structure for profit-distributing companies).
The accounting requirements for incorporated organisations are different from unincorporated ones. Registered companies account to Companies House. Industrial and Provident Societies are supervised by the Financial Services Authority.
incrementtop of A-Z
A small amount that is added. So in pay scales an annual increment is the step up of one point on the scale that staff receive each year, until they reach the top of the band for that post. This is different from the annual pay award or cost of living award. This increases the value of all the points on the scale by so many per cent.
independent examiner (of accounts) top of A-Z
Charities with an income of less that £250,000 (at summer 06) can choose to have their accounts independently examined, rather than audited. An independent examiner doesn't have to be professionally qualified, though the Charity Commission recommends that he or she should be a qualified accountant if the organisation's income is over £100,000. The person must be 'impartial' so they shouldn't be involved in the charity in any way that might influence them, and the trustees must be satisfied that the examiner has the necessary expertise and ability to carry out the examination.
The Charity Commission produces Directions and Guidance Notes about exactly what is required. The Commission also produces a standard form for the independent examiner's report (and also the trustee's annual report) for charities with a gross income of less than £100,000.
independent sectortop of A-Z
A phrase used to mean 'independent of government' or 'not central or local government'. It is used when local authorities contract with organisations to provide services. The independent sector consists of voluntary not-for-profit organisations and commercial, for-profit organisations.
Index of Deprivation, IODtop of A-Z
The Index of Deprivation ranks districts to show relative deprivation. It uses 12 indicators of deprivation, covering such things as income, housing, education, environment, crime and health, and measures how much a district is above or below the national average. The individual scores are then added together to produce an overall 'deprivation' score for each district.
inflationtop of A-Z
Inflation is when money loses its value over time. In our economy this tends to happen, so goods that cost you £100 one year ago, for example, might cost you £103 today. This is inflation of 3% per annum. If inflation continues to run at 3%, the same goods next year will cost £106.09.
The opposite of inflation is deflation.
infrastructuretop of A-Z
All the things and systems that aren't directly involved in providing a service, but which have to be there for services to operate efficiently or consistently, like management and administration, or communications and distribution networks.
In the world generally, infrastructure means things like sewage systems, roads and bridges and electricity grids. In the voluntary sector, the word is often used to describe organisations like local development agencies (LDAs) which help other voluntary organisations work better by providing them with - amongst other things - information, advice, training, co-ordination, representation, and back-room services (like payroll).
Inland Revenue Charities sectiontop of A-Z
The part of the Inland Revenue which deals with charities is at:
HM Revenue and Customs Charities
St Johns House
Merseyside L69 9BB
telephone 0151 472 6000
textphone 0151 472 6112
innovativetop of A-Z
New, not been done before.
inputstop of A-Z
The resources put in - money, equipment, buildings, people's time, energy and imagination.
IPS (Industrial and Provident Society)top of A-Z
A legal structure for organisations available to co-ops and voluntary organisations carrying on an industry, trade or business for the benefit of the community. IPSs register with and are supervised by the Financial Services Authority.
Most funders will expect you to have a written job description for any job they are helping pay for. They may ask to see it at the time you apply to them. A job description should include
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- what the title of the job is
- what the main purpose of the job is
- what the main duties involved are, and
- what the salary/wages and main terms and conditions of service are.
joined up thinkingtop of A-Z
The idea that different agencies or departments should plan and work together to provide seamless services to people. Joined-up government means the same thing but specifically applied to government.
LDAtop of A-Z
Local Development Agency
This is a term used to describe organisations that help 'develop' local voluntary and community groups. There are a number of different definitions of LDAs but 'develop' usually includes providing support of one kind or another.
leveragetop of A-Z
When you use one thing to make something else happen, particularly when you use one grant to 'lever' money out of other funders. Some funders calculate the ratio of their funding to money from other sources and look for a particular level of leverage.
liabilitiestop of A-Z
What you owe. Current liabilities are the amounts due to creditors that you will pay in the next 12 months.
management accountstop of A-Z
The accounts that an organisation produces for its own purposes (for instance, quarterly figures that go to the Management Committee) rather than the accounts it produces for others (The Annual Accounts for Companies House or the Charity Commission, for example). The form that management accounts take will depend on what information the 'managers' want.
match fundingtop of A-Z
Funding that depends on others also contributing - either the group's own fundraising or other grants or earned income.
mission statementtop of A-Z
A mission statement sets out simply and directly what an organisation is trying to do.
monitoring top of A-Z
Monitoring is the regular, systematic gathering of information about an activity. See also Performance Indicators. Monitoring is about counting and measuring, without particularly making any judgement about the results. In contrast, evaluation is about interpreting the results.
Some funders have their own monitoring systems - for example a form to return every three months giving numbers of users, or a statement of how you have been spending the money.
Monitoring can be vital if your funding is related to outputs. In these sorts of arrangements you may not get back money you have spent unless you can show that (for instance) you've been dealing with the "right" sort of trainees or users.
NDPBtop of A-Z
Non-Departmental Public Bodies
A term used by civil servants to describe organisations which have a role in national government but aren't themselves government departments or part of government departments. Similar to quango.
non-profit, not-for-profittop of A-Z
Generally taken to mean not distributing the profits to the owners of the organisation, though the term is not recognised in UK law. If an organisation distributes any profit or surplus to its members or its committee members or its shareholders, it is 'for-profit'. All charities are automatically non-profit distributing.
Non-profit organisations don't have to make a loss, or just break-even. The important point is that if they make a surplus, that surplus is used to further the objects of the organisation.
The steps on the way to achieving your aims.
Some people say that objectives should be SMART:
Specific - avoid a vague, all-embracing wish-list
Measurable - how can you tell if you've achieved them?
Agreed - within the organisation, with funders
Realistic - can they be achieved?
Time Limited - by when?
The EU uses the word 'objective' to describe different programmes it funds to achieve its aims. For example some areas had 'Objective 1 status' because they were in a part of Europe which qualified for the 'Objective 1' programme. In the UK these used to include South Yorkshire.top of A-Z
OSCRtop of A-Z
The Office of the Scottish Charity Regulator, the independent regulator and registrar of Scottish Charities.
the impact or effect on people and the environment
the difference that a project really makes
the point of doing it all
Outcomes are often contrasted with outputs. Maybe 6 people came on your course. That's a measure of output. Like a factory churning out products, you've put 6 people through a training course and they've come out the other end. But the outcomes might be quite different. Did the course do what it was supposed to do? Did it make any difference at all to the people who came on it?
Many funders look at the work they fund in terms of outcomes. With these funders you will need to demonstrate that your project will 'make a difference'. You will need to describe the work in terms of the difference it will make to the beneficiaries. Then you will need to show that your project has in fact made some difference.
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outputs, outturns, output fundingtop of A-Z
Some funding regimes, particularly statutory ones, link funding levels and payments to outputs. Output measures tend to stress things you can easily count - numbers rather than quality, outputs rather than outcomes, which can be difficult to measure.
output: training course and a number of trainees, a leaflet,
outcome: better health
Outturn (what gets turned out by a process) is similar to output. They are the end result of inputs.
overheadstop of A-Z
'Overheads' can mean different things but is generally used to mean some or all the fixed costs that you have to meet no matter how much or how little of an activity you undertake - rent, heat, light, rates, core staff, for example. If you use the word, state clearly what it does and doesn't include.
p.a.top of A-Z
per annum = per year
partners, partnershipstop of A-Z
Words that are used a lot to (supposedly) demonstrate that everybody is consulting and involving everybody else. Government money often requires evidence of 'partnerships' between the public, private and voluntary/community sectors.
pathfinder projectstop of A-Z
Government jargon for pilot schemes which test out new ways of doing things.
payroll givingtop of A-Z
A tax-effective way of giving, whereby people in work give to charities of their choice, the money is deducted from their pay packet and their employer does the paperwork.
performance indicatorstop of A-Z
Performance indicators provide a way of measuring how well an organisation is 'performing' so that it can be compared with others or with past achievements. Performance indicators often become tied up with targets. They are a key part of Best Value, and already used by many local authority funders.
Designing the right performance indicators takes a lot of thought. It's easy to measure irrelevant performance or just to measure those things that are easy to measure. And it's easy to assume that, for instance, more equals better, or faster equals better.
If, for example, you said that the percentage of enquiries dealt with successfully within 1 hour would be an indicator of how well an advice bureau was doing, you might find that advice workers started to direct people on to other services rather than get involved in case-work and actually solve problems.
person specificationtop of A-Z
The list of essential and desirable qualities needed for a particular job. If you are employing someone, funders may expect you to have a job description for the post (which says what the duties are and where the job fits in to your organisation) and a person specification (which says what qualities are needed to do the job). Being able to show that you both selected candidates for interview and made an appointment by seeing how well applicants match your person specification is one way of demonstrating good equal opportunities practice.
PESTtop of A-Z
Political, Economic, Social and Technological factors. Like a SWOT analysis, looking at the political, economic, social and technological factors that have a bearing (or might do) on your organisation can provide a good starting point for planning.
philanthropy, philanthropictop of A-Z
Philanthropy means the love of mankind, universal good will. A philanthropic act is one which benefits other people, and a philanthropist is a person that does good to others.
pilot schemetop of A-Z
When something is tried out for the first time it is a 'pilot'. Pilot schemes often trial something in a small area or with a small set of people. If successful, the scheme is 'rolled out' elsewhere.
primary caretop of A-Z
Primary care is the front line of the health service - GPs, district nurses, health visitors.
private sectortop of A-Z
Used in contrast to the public sector and the third sector or the voluntary sector, the private sector is that part of the economy not controlled by government and operating for commercial ends, 'for profit'.
profittop of A-Z
If you make more than you spend on a given thing or over a given period, you have made a profit. In voluntary organisations this is usually referred to as a surplus because the money isn't dished out to shareholders or staff, it's used by the organisation to further its aims.
project, project fundingtop of A-Z
A project is usually understood as something that a group or organisation does - an activity or a service - so it's part - but not necessarily all - of the organisation. Many groups run several projects, in which case what's not a project is often called the 'core' of the organisation. There is a big debate about the funding of core costs.
Because of the difficulty of getting funding for core costs, some organisations have become very good at packaging up their core functions as separate 'projects'. So their newsletter is a separate project, their need to buy publications becomes a 'library and resources' project, someone answering the phone is a 'helpline' project, and so on.
proposaltop of A-Z
Application, bid, tender. The word is often used for large projects where the document is quite long and complicated.
providertop of A-Z
The organisation that actually runs a service is the provider. Used in contrast to the 'purchaser'. A health authority might purchase a service that a voluntary organisation provides.
public sectortop of A-Z
That part of the economy that is concerned with providing government services (health, education, social security etc) at all levels.
pump-priming moneytop of A-Z
Money to start something off.
purchasertop of A-Z
The organisation that pays for a service. Where several agencies have an interest in a service, one may be described as the 'lead purchaser'.
qualitative and quantitative measurementtop of A-Z
Quantitative is about quantity - how much, how many? Qualitative is about the 'quality' of an experience - how did people feel?
quangotop of A-Z
Quasi Autonomous Non Government Organisation similar to an NDPB. Usually in receipt of government money, with members usually appointed by government, usually spending government money. Because quangos are 'semi-autonomous' and their members not elected, quangos are often thought to be less accountable that other spending agencies.
quote, quotationtop of A-Z
An estimate of how much something will cost, provided by a supplier. If you are planning to spend a lot you should get several estimates. A written specification makes sure that they are all quoting for the same thing.
receipts and payment accountstop of A-Z
Accounts drawn up on a receipts and payments basis should provide a factual summary of all money received and paid during the period they are reporting on, as well as a list of the organisation's assets and liabilities at the end of it. Receipts and payments accounts just show all the transactions that happened during the period. Unlike accruals accounting, it doesn't matter if the money received in one year relates to a service provided in a different financial year, and it doesn't matter if money spent in one year is for something received in another.
If you prepare accounts on this basis, it is important to be consistent - i.e. account for similar items in the same way in each year's accounts.
Registrar of Friendly Societiestop of A-Z
Up until November 2001, the Registrar of Friendly Societies registered 'mutual' organisations pursuing social objectives, allowing them to have limited libility status. Since November 2001, the Financial Services Authority has taken over this function.
Reserves are another word for 'savings'. If they can be spent on anything the organisation does, they are called free reserves. If they can only be spent on something in particular, they are restricted.
Organisations need reserves for several purposes, and how much they need will depend on their size and commitments. A Reserves policy might consider how much you need for:
working capital - enough to deal with cash-flow ups and downs
contingency funds - enough to meet contractual obligations to staff if, for instance, you had to pay sick pay or redundancy, and enough to cover other obligations (like building repairs) that might arise.
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restricted funds, designated funds
Under the charities SORP, charities have to distinguish between money that has been given for a specific purpose (and must be used only for that), money that has been set aside by the trustees of the charity for some particular purpose, and money that can be used on any of the charity's activities.
Money that has been given for something in particular must be shown in the accounts as restricted.
Money that the Management Committee has formally decided to put 'on one side' for a specific purpose, such as mending the roof, shouldn't be shown as restricted - because the Management Committee could decide to reverse its earlier decision and use the money for something else. Funds of this type are sometimes called designated funds.
Funds that are not designated and not restricted are often called 'general reserves'.
Some funders use the term free reserves to include general reserves and designated funds.
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revenuetop of A-Z
The money that runs through an organisation - that comes in and is spent within a year. Not capital.
ring-fenced fundingtop of A-Z
Money that can only be used for a particular, specified purpose.
service level agreement (SLA)top of A-Z
SLAs are used by local authorities to fund particular services provided by many voluntary organisations. They are more like a contract than a grant; more often than not they are contracts.
Local authority jargon. Key questions are
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What is the need?
What will the need be?
What services are in place now?
Where are the gaps and the overlaps?
signatory, signatoriestop of A-Z
The person, or people, who sign a document or cheque.
social economytop of A-Z
The French term l'économie sociale is widely used in Europe and refers to co-operatives, mutual organisations and 'associations' (which are like our voluntary organisations). In the UK the term probably means organisations that have social objectives instead of, or as well as, commercial ones. Social enterprises, co-ops, credit unions, community businesses, self-help groups, professional associations and charities might all be considered part of the social economy.
social exclusiontop of A-Z
A phrase first use by the EU bureaucracy and now commonly used in the UK, particularly by government (which has a Social Exclusion Unit). It is often used instead of the word 'poverty' in discussions about disadvantage. It refers to people who are 'excluded' from society and so do not play an active part in the life of the country. What causes people to be excluded is usually lack of money, jobs, opportunities and training, but other factors may also cause social exclusion.
social responsibilitytop of A-Z
The idea that organisations and individuals have a responsibility to the society in which they operate and should contribute to it. Many companies do their grant-making through departments of social responsibility.
Statement of Financial Activities required by the Charity Commission if charities submit accruals accounts. It is used instead of a statement of Income and Expenditure. What is required is described in the SORP.
The main differences between the SOFA and conventional Income and Expenditure accounts are:
the SOFA must include capital transactions as well as revenue transactions
the SOFA must include transfers between capital and revenue accounts
instead of 'income', the SOFA should have a heading called 'Incoming resources'; this section should show the value of donated goods or services as well as money income
instead of 'expenditure', the SOFA should have a heading called 'Resources expended'; this section should show the value of donated goods or services used up as well as money expenditure
'expenditure' is usually divided up into 'natural' categories like salaries, office costs, printing, whereas the SOFA splits 'resources expended' into
costs of generating funds
charitable activities; and
The value of volunteers' time should be included.
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SORPtop of A-Z
(Statement of Recommended Practice) sets out standards for accounting by charities, including what information should be included in annual accounts. It applies to virtually all charitable organisations in England and Wales, Scotland and Northern Ireland. The only exceptions are charities that have their own SORP (e.g. the SORP for Registered Social Landlords).
sponsorshiptop of A-Z
Sponsors give money to good causes in return for the right to have their name connected with that of the good cause. How much of a connection they get has to be negotiated and will depend on the nature of the cause, the nature of the sponsor, and the amount of money involved.
staff development and staff managementtop of A-Z
If you employ staff, funders may want evidence that your organisation follows good employment practices. They may want to know about terms and conditions of employment, about your equal opportunities policies and they may also want to know what procedures you have in place for supervising, appraising and reviewing staff. As usual, having something on paper gives them confidence that you have thought about it and have implemented a policy.
stakeholdertop of A-Z
People or organisations who have a stake in an organisation, or an interest in a service or issue.
Stakeholders in a voluntary organisation include management committee members, other volunteers, staff, users of the service, funders, customers, suppliers, neighbours in the community.
pensionstop of A-Z
Stakeholder pensions are designed for people without access to
employer sponsored pension arrangements. Most organisations
that employ 5 people or more have to ensure that their
employees have access to a stakeholder pension, though they
don't necessarily have to contribute towards one.
If you are employing people and aren't sure if you need to
provide access to one, the 'decision tree' on the Pensions Regulator website at www.thepensionsregulator.gov.uk
helps you work it out.
statutory/statutetop of A-Z
A statute is an Act of Parliament; hence statutory bodies are organisations set up by Act of parliament. They often have statutory responsibilities - things that they must do by law. For example, local authorities have a statutory responsibility to provide appropriate care for people with disabilities.
strategy, strategic planning top of A-Z
Being strategic is about thinking ahead.
Strategic planning concentrates on the steps an organisation needs to take to achieve its goals. It takes into account what else is going on, and the impact that other agencies or events might have. Organisations look at what might happen and what might go wrong, as well as what they expect to happen.
surplustop of A-Z
If you receive more than you spend over a given period the difference is a surplus. It is the opposite of a deficit. If the organisation is a commercial one, the surplus is usually described as profit.
sustainabletop of A-Z
If something is sustainable it can be kept going. Funders may want evidence that a project is 'sustainable'. This means they want to know how the project will be paid for once their money comes to an end.
SWOTtop of A-Z
A SWOT analysis considers Strengths, Weaknesses, Opportunities & Threats.
targetstop of A-Z
Something specific you work towards achieving.
terms & conditionstop of A-Z
The phrase 'terms and conditions' is used about employment and refers to the things covered in a contract - things like hours of work, salary and holiday entitlement.
It is also a phrase used by some funders. Some attach formal 'terms and conditions' to the offer of a grant. If you don't comply with the terms and conditions, the grant may be withdrawn.
third sectortop of A-Z
Voluntary organisations, community groups and other non-profit organisations are sometimes called the third sector because they are not part of the public sector or part of the private sector. They phrase is sometimes used instead of the voluntary sector because people think 'voluntary sector' is misleading; it implies that the sector is only about volunteers.
Third Sector is also the name of a magazine targeted at voluntary organisations.
transparencytop of A-Z
Transparency is about openness with information, being able to see how something works. The opposite of 'transparent' decision-making is decision making 'behind closed doors'.
trusteestop of A-Z
Charity trustees are the (unpaid) group of people responsible for the running of a charity. They may be called a Management Committee or Board of Directors or something else. The charity may be an incorporated body or an unincorporated one.
Holding trustees or custodian trustees are people who 'hold' something (property or land, for instance) 'in trust' for others. This is necessary if an unincorporated association has property or land or investments - because an unincorporated organisation isn't recognised in law as a legal entity. So individuals or a corporate body have to hold the property or land or investments on behalf of the group. The only function of these trustees is to hold whatever it is; holding trustees are not responsible for the running of the organisation.
truststop of A-Z
In the world of funding, 'trusts' is often shorthand for charitable trusts. Trusts don't have to be charitable, though. They are just a legal way of ensuring that some people (the trustees) control money or resources provided by the founder in a way that benefits someone else. Only charitable trusts can be set up to last forever.
turnovertop of A-Z
Usually the total amount of money coming into an organisation in a year.
unincorporated organisationstop of A-Z
An unincorporated association is a organisation set up for non-business purposes which is not a legal entity in its own right. It is treated in law as a collection of individuals. This means that the individual people who manage the organisation can be held liable as individuals for the organisation's debts and other claims against the organisation. Because the group is not considered as a 'body' in law, an unincorporated association cannot hold property or land or investments; individual people (called holding trustees) have to hold things on its behalf.
An unincorporated association is likely to be governed by a constitution (however informal) or be set up under a trust deed.
Voluntary organisations of a certain size (particularly those that employ staff) often become incorporated in order to limit the liability of the Board or Management Committee members.
upskillingtop of A-Z
Training, improving people's ability to undertake certain tasks.
Value For Moneytop of A-Z
The idea that public services should be based on Economy, Efficiency and Effectiveness.
Now being replaced by Best Value.
vision statementtop of A-Z
A rather woolly term, probably meaning a short phrase or sentence that provides an inspiring picture of the organisation at some point in the future.
voluntary organisationtop of A-Z
Not a statutory organisation, set up by law, nor a commercial or private organisation, run for profit.
A voluntary organisation may use volunteers, or all the work may be done by paid staff; what makes it voluntary is that the legal responsibility for the organisation rests with a group of people who are not paid and who choose to be involved (often called the Management Committee or Board).
voluntary sectortop of A-Z
All voluntary organisations, as opposed to the statutory sector or the private sector.