One of the most important duties of a charity trustee is to safeguard the assets of the charity and ensure that they are used in the most effective and efficient manner possible to achieve the charity’s aims. At its meeting on 8 December, the Council of Management, the trustees of the charity, considered one of the most important items in its annual cycle of business. It agreed plans for the 2010 revenue budget and business plan.
The revenue budget is a forecast of the charity’s income for the year ahead and a detailed description of in which areas the charity will spend its money. It is one of the most important planning tools that the trustees use during the year to measure and monitor the charity’s financial performance. The business plan runs in parallel to the revenue budget. It is a detailed analysis of all the activities that the charity plans to undertake during the year. Priorities and objectives are set for each department to achieve with outcomes that can be measured and assessed for progress as time goes by.
Creating the budget and the business plan starts in September each year. Council steers and monitors their development until it considers final drafts in detail in December. Part of the decision about what to do in 2010 was determined by what happened in 2009. Council heard that last year had been a very good financial year for the charity despite the challenging economic conditions. This was due to a very healthy level of income from people leaving money to the charity in their Will. More than £1.3 million was left to the charity in this way in 2009.
With this solid background, Council decided that the priority in 2010 must be to sustain the charity’s services and to apply any surplus funds from 2009 to help to do this. As a result, Council has planned for a deficit on the charity’s main General Fund of £174,758 in 2010, to be funded from the charity’s reserves. With total reserves of £3.7 million, such a deficit is very affordable.