Taking control, adopting a people-centred approach and seeking professional advice

Use this page to learn about how to take control of your situation, the importance of adopting a people-centred approach and when seeking professional advice is important.

Even with plenty of advance warning, you can still end up in severe financial difficulty. Sometimes, we just won’t be able to predict the events which result in serious financial challenges.

Or we can predict them but due to factors outside of our control, there’s little we can do. In this situation, it’s important to take full control of the situation swiftly.

Having a clear understanding of your duties and obligations is essential. It allows you to think about recovery plans and prepare for closure or merger.

This is especially true for the trustees of a charity as they are legally responsible for the organisation and have obligations in relation to its solvency.

For useful guidance on managing finances, read The Charity Commission’s guidance: CC12: Managing a charity’s finances: planning, managing difficulties and insolvency.

Managing any kind of financial difficulty is emotionally challenging. It’s a pressured time for all involved. People can be fearful of what may be ahead and the possible impact on services and those you seek to serve.

Staff may be concerned for their own financial security. Trustees may need to make decisions rapidly, often with incomplete information. It can feel like a daunting and lonely time.

Recognising this and finding space to raise and talk about these concerns can help build a supportive and constructive way forward.

Many sector membership bodies provide support to their members. For example:

• ACEVO
• Association of Chairs
• Honorary Treasurers Forum
• Charity Finance Group

You can also read our guidance on supporting mental health and well-being at work.

If you think your organisation is facing serious financial difficulties then you should seek professional advice. This is because it’s possible to break the law even while trying to do the right thing. 

Getting advice early means you're more likely to develop an effective recovery plan or managed closure.

This can sometimes feel like a big step, and it can feel unsettling. Making time to do this collectively as a board and senior staff team where appropriate, can help create a mutually supportive environment.

NCVO cannot offer advice on insolvency as we are not lawyers or insolvency experts but there are sources of support available below.

• Read West Yorkshire’s Community Accounting Service (WYCAS) range of practical tools and examples on managing your finances.
• Read Embrace Finances’ guidance notes on completing a cashflow forecast.
• The Charity Finance Group (CFG) is a charity that specialises in advising charities on financial management knowledge and skills. They have a helpline for charities seeking advice on managing financial difficulties. Contact Sudhir Singh, partner head of not-for-profit on sudhir.singh@mhllp.co.uk or by calling +44(020) 7429 0547.

You may also wish to seek legal advice to make sure you’re meeting your obligations.

Specialist providers offer professional advice on a fee-paying basis:

• Crowe provides a range of financial advisory services to charities and has produced free guidance on insolvency.
• The Insolvency Practitioners Association can help you search for accredited providers.

NCVO worked with Liz Pepler at Embrace Finance to create this guidance.