Addressing financial difficulties within a charity

The Charity Commission has published two reports which show that trustees who take early, pragmatic steps to actively identify and manage their financial difficulties will secure better outcomes for their charities and their beneficiaries. The reports have been published as part of a proactive project exploring the financial resilience of the charitable sector and identifying wider lessons for charities who may be experiencing financial distress.

The reports highlight a number of key themes and wider lessons for other charities. These include that:

  • the case studies demonstrate that early steps to address financial difficulties and confront them pragmatically minimised the risk to beneficiaries
  • charities have a number of different options to explore including the possibilities of mergers and collaborations to achieve positive outcomes despite their financial difficulties
  • the future outlook for charities remains challenging; trustees must stay alert to the risks of financial distress and manage them actively

The two reports are: