Week 4: Working with financial information
Every voluntary organisation, no matter how small, needs to consider the role of financial information in its operations; that is, the money it has coming in and the costs involved in paying staff, running services and projects, rent, utilities, and so on. People often think it is the accountants or other specialist financial staff who are in charge of finances but, in reality, many staff, trustees and volunteers have some input into managing financial information, fundraising and setting budgets. This week will help you if you are asked to take responsibility for a budget or to comment on financial information within your organisation.
Good financial management is important for all organisations, even those with small incomes, and registered charities are regulated to ensure that they are being run appropriately, particularly in terms of how money is raised and spent.
You will look briefly at some of the key financial terms that relate to voluntary organisations (particularly registered charities), which will help you understand your organisation if you are new to working or volunteering in the sector. You will focus primarily on budgets this week – what they are, why they are important, and how to interpret them – as this is an area where many staff and volunteers are required to contribute information.
Budgets are used at different levels – organisational and departmental as well as for individual projects and activities. Understanding budgets can prove to be a useful skill, whether in your work or in your personal life. You might think that budgets are just about working out costs and doing calculations, but actually much of the budget process relates to asking questions, and presenting information clearly and communicating well.
You can also attempt the first compulsory badge quiz this week.
Start by watching this video in which Julie Charlesworth introduces you to Week 4.
By the end of this week, you should be able to:
- understand different terms relating to financial management in the voluntary sector
- outline the different sources of income available to voluntary organisations
- describe the importance of budgets and why they are set
- interpret a simple budget
- describe how to balance a budget.