Financial difficulties and charity resilience
04 May 2010
Charities in Financial Difficulties
1. Charities have never been immune to financial difficulties, even in the best of times. However the global economic recession and the long term implications have presented and will continue to present significant challenges for charities.
2. As the regulator, OSCR is uniquely placed to adopt a long term perspective, with particular reference to our vision of a flourishing sector. This includes assessing the long term impact of recession and recovery and what this means for charities, for OSCR and for the public as well as offering appropriate short term support, guidance and, where necessary, intervention. However OSCR is not the guarantor of financial viability and sadly, we expect to see charities facing financial difficulties for a variety of different reasons.
3. OSCR has today published a policy statement on Charities in Financial Difficulties. The policy makes clear what the regulator does, and also what we do not do when charities are faced with financial difficulties.
Jane Ryder, Chief Executive said, “OSCR recognises that charities have different financial challenges and different needs at different stages of their development. As regulator, our aim is a strategy that so far as possible assists individual charities to navigate their way through their financial difficulties to a managed outcome which is best suited for the charity and its beneficiaries in the long term.”
Resilience Research
4. An element of the strategy is to provide information which will enable OSCR , and also individual charities and their advisers to identify and address risks to the overall sustainability of the charity . At the same time OSCR has published a short study of resilience in Scottish charities. This independent report provides analysis of OSCR data and insight into common factors which tend towards resilience – or otherwise – of charities from the perspective of the regulator’s experience. Financial considerations play a part, but the study also identifies the critical importance of governance.
Read the Resilience Research report:
Jane Ryder, Chief Executive said, “This first study provides information, conclusions and recommendations of great interest to OSCR and many of our stakeholders. The study establishes a baseline which we will aim to repeat at appropriate intervals to establish trends and identify further indicators.
Meanwhile we will be taking forward a number of the recommendations directly and in conjunction with sector organisations and advisors”.
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