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With charities continue to feel the effects brought about by COVID-19, our July 2020 webinar provided practical advice and good practice tips on managing money - including an emphasis on financial forecasting.

It also offered important reminders for charities as they move into the new financial year, perhaps approach important reporting deadlines, and think about their annual general meetings.

Webinar transcript

Chris Riches

Hello, everybody, and welcome to today's webinar. Welcome back to the ACNC Webinar Program after a bit of a break. We've missed the opportunity to connect with you through our webinars. We hope you're all well, hope you're all staying safe. We hope that today's webinar can help you and your charity through some pretty extraordinary times.

Today, we're going to be looking at how charities can step forward in financial management, money management, and that sort of thing in the changed circumstances that have been brought about by COVID-19.

My name is Chris Riches. I'm from the ACNC's Education Team. Joining me today is Mel Yates, the ACNC's Director of Reporting and Red Tape Reduction. Hi, Mel.

Mel Yates

Hi, Chris. Hi, everyone.

Chris Riches

Cool. We're all connected. This is wonderful. As you can guess, we are operating remotely so we may have some interesting background noises as we go along. If that's the case, be entertained and bear with us.

Before we start, some very quick housekeeping points, if you've got any troubles with the audio for the webinar, you can try listening through your phone. Call the number listed in the email you have received upon signup. Put in the access code and listen to the webinar that way. We have the ability to take your questions as you wish to type them in as we go. We have Maggie and Matt who are going to be looking to respond to those questions so feel free to send them through as we go and we'll get some responses through to you where we can. We'll try and answer all the questions as they come through. If we can't, what we'll do is if you want to send us an email through, we'll get back in touch with you.

Recording of this webinar as well as the presentation slides, they'll be published on the ACNC website as soon as we can do so, hopefully in the next couple of days. As always, we'll send out an email with the links featured in this webinar so you don't have to write everything down. We've also included a list of useful websites and reference points in the handouts that accompany this webinar.

Final thing, we really value your feedback. If you have any suggestions for ways we can improve our webinars, please let us know.

So onto things, it says hitting a button. There we go. Look, this is what we're going to cover today. The webinar is going to be split into some different parts. The first part is going to be a little bit of context, a little bit of reference for where things are at. The main body of the webinar is going to be devoted to obviously charity money management and its components. Some of the things we're going to be covering include charity forecasting and planning, charity spending, some good practices there including issues like fundraising, the use of charity reserves.

Mel, we've also got a couple of other things we're going to looking at too?

Mel Yates

We do. So we want to focus a bit of time on meetings and decision making and some of the things that you need to think about there, which are very important. We'll also talk about charity reporting including some tips and things to remember about your charity's reporting. I guess as part of all of these expectations and responsibilities of registered charities and what they need to think about in relation to their registration with the ACNC, that's what we'll try and focus on.

We're also going to move through some tips, as I said, some reminders and some things that charities really should be thinking about at this time, particularly in terms of money management as charities might be entering a new financial year. Obviously, charities are currently going through the AGM season as well.

Chris Riches

Now, just to start with some context because clearly, we know there's been an impact on charities relating to COVID-19. Many of you will be feeling those impacts directly, some indirectly. Some of these impacts have been on obviously charities' actual work. Some of that work has been impacted or even curtailed due to physical distancing measures, isolation-related limitations, those sorts of things.

At the same time, many charities have also seen an increase in demand on their services as the impact of COVID has been felt. There's been an impact on fundraising activities. Clearly, face-to-face fundraising has been hit hard. With that, I guess fundraising stapled out of bounds. Many charities' liquidity has been affected. Some charities had to make some decisions, some alterations to shore up their financial position. They've embraced new fundraising methods. We've sought out funding from alternative sources, have used reserves. Some charities have even decided to just call a bit of a halt to their programs or have even gone into a little bit of a recess just for now as well.

Another impact has been on charity staff and volunteering. There's been issues obviously in relation to staff. Volunteering situation has again been impacted. Organisations are facing challenges in attracting, engaging and retaining volunteers as well. So they are some of the contexts. The next couple of slides will look at where there's been a couple of recent surveys about some of the impacts that charities have felt. Now, let's see. We've got this one here. Mel, if you wanted to just take us through that one.

Mel Yates

Thank you. I guess combining all of them together, it's not surprising that there's a lot of anxiety. There's a lot of uncertainty and there's a lot of fear amongst the charity sector. So a recent survey of Australian Community and not-for-profit sector groups which coincided with the Giving Tuesday now, a period a bit earlier in the year, found that 33% of organisations believe that COVID-19 poses a significant threat to their ongoing viability, 53% described post-pandemic future as uncertain, and 14% described their future stage as weaker. There's more on that survey available at the website which has been included or will be included in the materials that are circulated.

Chris Riches

Indeed. It's the Institute of Community Directors Australia website. So go have a look at the links there and have a bit of a look around there. As well as Australian impacts, obviously overseas, charities have felt this. In the UK, the story has been pretty similar. There's been a number of surveys of the sector over the past months, 90% of charities expected to receive less income and forecasted over the next six months. Many expected COVID to have a negative impact on their ability to meet charity objectives across that similar timeframe. Many charities also reported noticeable and even substantial losses to their total income, 80% of small charities have had to alter or drop services.

Now, as you probably know, I know we mentioned it in our last webinar before we've took a bit of a break, we've got our page here, our COVID-19 page that's been constantly updated on our website. There's a lot of information on there. It's the first port of call we would probably recommend that you can have a look at that. There's all manner of links and all manner of relevant bits and pieces to help your charity. That's Take some time to refer to that. Bookmark it, all of that sort of stuff. So some contexts, Mel, if you wish.

Mel Yates

Thank you very much, Chris. I guess we're now going to start going through in a bit more detail, some of the considerations that your charity really should be thinking about at this time. Many of these are financial considerations, some are operational, some are reporting. But they're just a series of things to think about in terms of your own charity. Now, the majority of charities have just started a new financial year on the first of July and also, we've got the AGM season currently being progressed by many organisations across the sector as well. We've got reporting responsibilities falling due so really, now's the time to I guess jump into it. Thanks, Chris.

Chris Riches

Now these times, obviously at any stage, the importance of charity leadership is a constant factor and a constant topic. But at these times, it becomes extra important, I suppose. We would perhaps say that good charity leadership maybe has not been more important in recent times. Australia's charity sector is vibrant obviously. It's innovative. It moves. It's agile. There's always been a willingness to try new things to get the job done. Much of this attitude does start at the top with leaders and times like these require reliable and innovative leadership. This is where good charity leaders come in. So this is our first sort of message here I guess.

During times like these, charity leaders really have a role to step up, to think about the information available to them, not only from the ACNC but from other good sources as well, and to ensure that the learnings that they have today, two weeks ago, two weeks in the future, those sorts of things are implemented in their charities.

Mel Yates

Thanks, Chris. So thinking about all of these things, there's one really key message that is very important that charities and particularly Responsible Persons, their leaders such as yourselves, need to take into account. That is at the top of this slide, the best interests of the charity must always be paramount and at the forefront of all decision making. When you're thinking about what your next steps might be, what you need to do, how to move forward, your starting point must always be what is in the charity's best interests? That's a key part of any Responsible Person's role as defined by the ACNC Act and it's a requirement of the ACNC.

Chris Riches

Indeed, it is. Now, when you're working through these issues and some of the things that we're going to talk about to that, charities and the Responsible Persons are going to quite obviously face some balancing acts, some tradeoffs. Some of them you might already be familiar with. We've got a couple here on screen, the immediate needs and short-term interests versus the longer term ones, balancing them and the challenges that it brings. The reduction in expenditure versus the continuation of delivering outcomes for those that you aim to work with or help and that's not just now. Obviously, that's into the future as well.

The front of mind points here, you need to think about whether the decisions you are making are in line with your charity's purposes and they're in line and they mesh with your charity's governing document. Now, how can you do this? How can this occur? Mel?

Mel Yates

Great. What does it mean to act in the best interests of the charity? So some practical ways that this can happen and you can demonstrate that you are always thinking about the charity first and foremost is documenting any decisions that are made by the charity, decisions that are made by Responsible Persons. Make sure you keep records of all of these decisions I should underline that keeping records is a requirement, both operational records but also financial records.

Making sure that financial information and regular financial information is made available to people that are making decisions. So it's really important that Responsible Persons have the information they need so that they can make decisions that are in the best interests of the charity. So if you are a Responsible Person and you need more information then it's really important that you speak up and ask for that.

Chris Riches

Definitely and don't be afraid of speaking up. Seek the advice and seek the guidance that's out there that you need to ensure that you're doing the job and you're doing the job to uphold the best interests of the charity that you are a part of.

We briefly touched on elements of forecasting when looking at some of the sector survey results just a few slides ago. When we talk about forecasting, and this is something that we're going to devote a little bit of time to, what are we actually - what is the actual meaning here, Mel?

Mel Yates

So when we talk about forecasting, really what we're doing is we're trying to understand our cash flows. Where are we going to get money from and what do we need to spend money on to keep our charity operating? So it's really about making sure that you are thinking about the charity. You're preparing the charity to understand what the future is likely to look like in terms of any revenue coming in.

It's a really good process to think about really what's likely to happen. But also in this time of uncertainty, it's probably really sensible to think about a worst case scenario. So be quite conservative. If you're wondering whether you're going to receive perhaps donations or revenue from particular sources but you're very unsure, then it might be worthwhile doing some forecasting on the basis that you don't think you will receive those donations to see how the charity will cope and what that actually means for the organisation.

Chris Riches

Now, as I mentioned before, we're going to spend a little bit of time here looking at forecasting simply because it is a key component in terms of financial planning and the management of your finances during challenging times like these. Mel has just mentioned briefly forecasting realistically and perhaps even conservatively. What are some of the things that that does encompass, Mel?

Mel Yates

So really thinking about the sources of revenue, where does the charity receive revenue from, whether that be donations, whether that be from government, whether that be from investments or from many other sources? So really understanding where the money that comes into the charity, where that comes from and the reliability of those sources of revenue.

It might be of assistance to look at historical information. There might be insights that you can get from looking at what happened last year or the year before. But it's also really important as I said to be realistic. So even though you may have received a donation from a community business or from an organisation within your local area, think about the impact that COVID-19 is perhaps having on those other businesses. They might not be in a position to provide that donation at the moment.

So what does that mean for your charity? So thinking about the economic consequences of COVID to your organisation, but thinking broadly because the sources of revenue might be impacted with what's currently going on. There's also a really important consideration here is thinking about any programs of assistance, whether that's from government or other organisations to assist the charity. There's been a lot of talk about economic stimulus and your charity may be entitled to some sort of benefit or assistance through one of those programs.

I guess the last point, health considerations, I think this is really important because there may be issues around either volunteers who would normally help your charity that are unable to participate in any volunteering at the moment because of the physical distancing measures that are in place or because they're vulnerable. So it's also thinking about the impact that that might have on the ability of the charity to earn income or deliver any services.

Chris Riches

I guess when we're talking about this sort of thing, mindset is important here. Mindset is important with a lot of things but mindset is important with forecasting and that sort of stuff. Obviously, we've discussed thinking about a more conservative approach on money and spending. What necessary changes does your charity need to make to accommodate the current situation? That situation might be ongoing for a little while still. An example might be just simply not committing to any more expenditure or even cutting expenditure if necessary.

We've talked about the ideas behind forecasting, a bit of a starting point or a bit of a run through here, Mel, of some points to consider when you're actively setting out the forecast.

Mel Yates

That's right, Chris. So really, the point of forecasting is to try to understand what is going to happen. That can be really challenging particularly at the moment where there are so many question marks and a lot of the environment is really, really uncertain and unsettled. So it's good to think about the information that you know. Use that as a starting point. What can be relied upon? What do you know is going to happen? Then you can think about what you expect or what you think will happen. It will be really, really sensible and acting in the best interests of the charity to think about some different scenarios. So some what-ifs, and think about some of those what-if scenarios and what that means for the finances of your charity.

Sometimes, it might help if you do some really short-term forecasting. So it might be better for your organisation to do forecasting more regularly, but do it for a shorter period. Because you might not have any certainty about what's going to happen in 12 months' time, but you might have some certainty about what's going to happen over the next three months or four months. So this might be a process that you need to repeat throughout this year.

You need to think about what happens if the charity doesn't receive some funding that it has received in the past? I talked about donations. Your charity might be reliant on a very generous donation from a local business for example. That business might not be operating at the moment so they might not be in a position to continue that donation. So what does that mean for your charity without those funds?

Also again, the health restrictions, there might be reasons why your charity cannot undertake a particular program and what does that mean? How will your charity either deliver it in a different way? Or perhaps your charity can't deliver that program at the moment. I guess the process of forecasting, it should be useful and it should be practical, and it should be realistic to help the charity make informed decisions about the path forward.

Chris Riches

Indeed. Now, we've got some different types of forecasting here. We'll mention them quickly here and I'll let you mention them quickly, Mel. We've got a couple here listed. Cash flow forecasting is one. Income and expenditure forecasting is the other. Very quickly, Mel, what are the definitions or what are the ideas behind these two types of forecasting?

Mel Yates

Cash flow forecasting is really about thinking and making sure about your cash flow. Are you going to have cash available when you need it? Or are you going to identify that you're going to have a shortage of cash at a particular point in time? So this is really helping the charity to provide any awareness or understand any warning signs to help avoid any future financial problems. So when you need cash, you need to make sure that the charity has cash at that time. That's really around the timing of when you're going to receive income or revenue and when you need to make payments. So you need to also think about when you need to pay a bill. When is the bill due? Are you going to have money in the bank at that time in order to make that payment?

An income and expenditure forecast is slightly different because that's thinking about trying to understand and identify any potential revenue that you're going to get for the period or income, also thinking about the expenditure that you're expecting to incur within that period. So it might be a sensible scenario to think about, what if our income dropped by 10%, 20%, 30%? What is that going to mean for the charity?

Now, a couple of points to remember. Forecasting is designed to give you information so that you can make informed decisions with some degree of certainty or a level of comfort that you're making the decisions that you need to make for the charity, in the best interests of the charity. It's also really important that Responsible Persons outline the key activities of the charity and are involved in the process. So it's a tool toward the viable operation of the charity. So, Responsible Persons are ultimately accountable. It's really important they're involved in the process so that everyone has a shared understanding of why decisions are being made and what's expected to happen.

Chris Riches

Indeed. We touched on this point here just a couple of slides ago. Another part or another aspect towards this forecasting is even asking or considering the question on whether there is a need to change your charity's forecasting entirely to treat this period that we're in right now as a bit of an outlier and to put in place plans that look to cover, specifically maybe just the coming 6 months, 9 months, 12 months, depending on what you're comfortable with. So keep that option in mind as well.

Now, conservative forecasting, verging on perhaps worst case scenarios, using known information scenarios and contingencies, all these sorts of things. In forecasting, we often start or the most obvious point to start is factoring in income and things like fundraising obviously because of its direct relationship to income. But we will touch on fundraising and those sorts of issues in a second.

There are also other things to consider as well and one of these, as you can see on the screen right now, is fixed costs. Now, fixed costs, we're talking about things like rent and mortgage payments, loan repayments, any technology agreements you might have, security insurance, all of that sort of stuff. Now, what should charities be looking at when they're doing their forecasting in relation to fixed costs, Mel?

Mel Yates

It's really, really trying to understand what your fixed costs are, whether there is any flexibility with those fixed costs, or whether they can be reduced, or they can be deferred so they can be pushed out and paid later. A couple of things you talked about there, Chris, in terms of rent or mortgage payments or loan repayments. So there might be an opportunity to be a bit flexible with making some of those payments. But obviously, you're going to need to have a talk to banks, lenders, perhaps your landlord, funders, or anyone else to see what conditions and arrangements are associated with all of those fixed costs and whether there is any flexibility to defer them or reduce them or come up with a different timetable for making those repayments.

If you're finding that certain arrangements are perhaps coming to an end then you'll have to weigh up your options or consider organising further arrangements for example.

Chris Riches

Now, that's forecasting in terms of fixed costs. Another aspect of forecasting here is staffing. Charities are likely to have to make decisions on staffing if they have staff. I guess what we'll do is we'll perhaps loop in volunteer numbers here as well. As you move forward, decisions will again need to be made on things like staffing hours, the financial impost of both staff and volunteers. There's a couple of obvious ones that come straight to mind here.

Does the charity need to stand down employees? Now, that's not something that we want to really consider but it's something you're going to have to if you've got employees. What government systems may there be to help us and our staff? Is there an opportunity to perhaps make use of some of those offers there? But also, there needs to be a thought about is your charity able to operate your programs without some staff? Are there ways that you can maybe temporarily use volunteers rather than staff for certain tasks? If so, does that mean that staff can be tasked with different things or can they have their hours reduced?

One of the impacts on staff and volunteers being unable to do their normal role due to for example, family impacts, the ongoing, particularly in Victoria, remote learning arrangements that are in place for school aged children, the physical distancing that continues in some parts of the country. Also, there's obviously a consideration for leave entitlements too. It may be appropriate to ask some staff to use some of their leave to reduce liabilities if their hours have been reduced for example. We mentioned the liabilities. Mel, if you wish to speak a little bit further about some liabilities.

Mel Yates

Absolutely. I mean ultimately, liabilities are things that are owed. So if your charity owes any money, whether that's for rent or whether that's for a loan or a mortgage or anything like that, it's really, really important to look at whether there is any flexibility with these arrangements. You've also got to think about any kind of agreements or restrictions or covenants that are in place in relation to all of these liabilities.

You need to think about whether you can defer something, whether you can reduce it temporarily. Or if you're lucky, you might be able to have a conversation about a particular liability and someone else might agree that the charity no longer has to pay that liability. That might be a really, really practical and helpful way that your charity can continue with a little bit more certainty. But I would suspect that that's probably not going to happen a lot of the time.

So also thinking about the timing of things, if you have got perhaps a lease that's coming up that's about to end then you might still need the premises that fall under that lease. It might be a good time to think about any renegotiation that needs to happen. But it's really important that you have the information available so that the RPs or the Responsible Persons for the charity can make informed decisions and be participants of informed discussions to think about what options are available for the charity.

Most importantly, I think this dot point here, Chris, is that you've got to be able to have the conversation. Some of the conversations might be really difficult and they might be very challenging, but you've got to think about what's in the best interest of the charity. You've got to be brave and have those conversations thinking about the charitable organisation and the purposes that the organisation undertakes.

Chris Riches

Absolutely spot on. Some of these conversations aren't going to be easy. There is an element of having to grit your teeth at times and you do need to do it. As a Responsible Person of a charity, you do need to do it. Clearly, as you can see on the screen, fundraising, there's been challenges that many charities have felt. We've seen charities that are reliant on fundraising in a usual face-to-face fundraising manner. They've been very, very hard hit.

But even for those who aren't as reliant on this type of fundraising, there's been impacts, clearly. Fundraising events have been cancelled or postponed. There's a changed donations landscape, obviously upon us at the moment. The ability to just get out there and try and attract donations has become more challenging. The difficulties of engaging supporters and donors have grown. Again, there's no single simple answer to addressing those challenges I guess. But Mel, what are some of the things that charities should be doing and should perhaps continue to do?

Mel Yates

For sure. I think it's important to note that the whole sector is having to change and navigate this uncertainty. So I think we need to actually acknowledge that we're all in this together and we're not alone. Many charities have already started doing things a little bit different and I think that point there around the new normal is really important because we don't know how long we're going to be in this environment for.

So it's really important that charities start to take steps now so that they can put their organisations on a sustainable footing sooner rather than later, rather than waiting until the point where it is too late. It's really important to explore what can be done online, what can be done in a virtual way, rather than perhaps the normal of being in a face-to-face environment.

It's really important also I think to be flexible because some things might not work successfully. You might try something and it might be a terrible failure but that doesn't mean that you shouldn't stop trying something else. I think there needs to be an acknowledgement that the organisations that you're all working as part of, there needs to be a bit of flexibility. What works for your charity might not work for someone else's charity. So you might see an idea from another organisation and you might think that's a great way to do something but it might not be appropriate for your particular organisation.

I think having an awareness of different options and having different options to think about and select from is really, really healthy. But there just needs to be perhaps an understanding that you need to think about your particular charity, what's in the best interests of your organisation because some things might be more appropriate than others.

Chris Riches

In that context of thinking about what might be best for your charity, there's obviously some options here. We discussed the online fundraising platforms and then some ability and availability of those options. A number of charities, a number of organisations as a whole are holding virtual events, virtual fundraisers. I won't say remote fundraisers. That doesn't sound so good, but virtual events and those sorts of things.

The use of technology and the connection online, these sorts of options are there and they're available. They're ones that clearly a charity should be looking at, should be considering and seeing if they are right for your charity. Obviously too, if you are doing these sorts of things, you're getting online, you need to remember your permits, fundraising permits, obviously, fundraising regulation online. You need to be thinking about your licenses and permits and the things like that that you might need.

When we talk about the fundraising challenges, we might also have to talk about a deeper look at your strategy. Do you need to review your overall fundraising strategy? Do you need to review it so that it better reflects the challenges and the changes in the fundraising landscape that are currently affecting your charity and the entire sector? When we look towards doing that, Mel, what are maybe a couple of things, a couple of very quick things that charities should think about if they're looking to review their fundraising strategy?

Mel Yates

Absolutely. I think this is where it ties back nicely to forecasting. How your charity is going to receive any funds or any goods that it needs in order to service your beneficiaries and run your programs, that's sort of going to impact on that forecasting process. So you need to think about how you might do things differently and what the flow-on effects are for your organisation in terms of the money or the goods that it receives in order to keep providing those to beneficiaries or running programs.

They are linked and also the forecasting process can perhaps influence what your strategy is for fundraising, if it's identified that particular strategies would be better in a particular environment or at a particular point in time. So they are linked and they need to coexist. They need to support each other so that the charity has information that helps Responsible Persons make good decisions.

Chris Riches

When it comes to these sorts of decisions, the strategies and the forecasting, one thing that is very important to remember is the need to continue to communicate with your people, with your supporters, your donors, members, staff, volunteers. When you're making decisions about charity money and fundraising, clear communication has to be key. Now that we're going to touch on meetings a little bit later in this webinar, we'll quickly go through that. That's one way that your charity can communicate.

But obviously, you should be looking to harness all manner of communication methods and channels; your website, your social media, perhaps if you have a regular e-newsletter or publication that comes out. You have the desire or the ability to put together a podcast for example. Maybe you can do it with a senior person at your charity or interview with a charity leader for example.

Communication provides your people with the information they need. It keeps them informed and updated and allows you to get your messages across. This communication, while it's important for issues that are linked to charity fundraising, of course, should be a key consideration on a wider scale, on a more general level as well.

Now, we'll verge from communication to collaboration, which is a nice bit of alliteration. Charities should really continue to seek out opportunities to collaborate. That's the considered shared resources or other shared efforts that may reduce cost or may increase the work efficiency. Collaboration may mean different things to different charities of course, but there are quite a few ways to pursue collaboration.

One really simple way is to share information and experiences, speaking to other charities and people, sharing knowledge, sharing experiences, reaching out and asking and talking. Again, as Mel said earlier, we're all in this one together. What are some of the other considerations here, Mel?

Mel Yates

Absolutely. It's really important to take some time to assess what the benefit would be from collaboration. Will your charity actually get a benefit from working with another organisation or another charity? If you actually start by perhaps speaking to another charity or another organisation to better understand what each organisation is doing to avoid duplication for example, but sharing knowledge, best practice and learning from each other can be really helpful and give you some really key information that you can use within your charitable organisation.

Would it be better to work alone and continue to service your beneficiaries independently, alone? Or would it be better to work together? Would it be better to work with a charity that does something similar to your charity? Or is there any benefit in working with a charity that does something completely different because you can perhaps share resources, for example?

But I think it's really important to have a conversation. Ask questions and get a better understanding on whether you can work together to raise funds, to reduce costs, to share any burdens or any overheads or anything like that. There are ways and means of collaboration and it could be very different for very different organisations.

Chris Riches

Also, we'll make a quick mention of this article on Pro Bono Australia's website last month that looked at this issue. If you want to see the website there, it was called Has COVID-19 Accelerated Funding Collaboration? Again, we'll link to it in our follow-up email and also in the handout that you will have access to. It's well worth a read and well worth a look. Maybe you're wondering then have a look.

Charity reserves is another issue and an issue that's come up repeatedly over the last little while. Charity reserves, if you're lucky enough to have money set aside for a rainy day, spare money if there can ever be such a thing, it's tempting to perhaps think about accessing it in times like these. There might also be things however, to be mindful of. Again, if your charity is in a position where they have reserves, Mel, what do you believe that they should perhaps keep in mind?

Mel Yates

Absolutely. You just mentioned that some organisations are lucky enough to have money for a rainy day or funds set aside for a rainy day. I think it's fair to say that it's raining at the moment right across Australia and in many parts of the world. So if your organisation does have any funds held in reserve, you need to think about whether they have been kept aside for a specific reason.

Your charitable organisation might have funds set aside for a specific purpose or there could be conditions attached. So you need to think about whether you have got the ability to make decisions to use those funds or whether those funds are essentially out of bounds and they can't be used for the rainy day that we're currently experiencing.

Also have a think about whether your organisation has any policy. Do you have any agreement on how reserves are going to be used, what amount of reserves you are happy to use at a particular point in time? As I said earlier, it's really important to make any decisions and document them so that everyone is in agreement and if anyone needs to look at the decisions that have been made they are able to find evidence of those decisions being made.

Back to what you were saying earlier, Chris, around communication, it's really important that if you're making decisions then it's important to communicate those decisions to stakeholders, donors, people that might be giving your charitable organisation the funds that it needs to undertake its programs. Make sure they're informed. Make sure the public are informed. Make sure any members are informed. Anyone who's involved with the charity should be aware of how those funds are being used and why they are being used at the moment.

I think also the last point, any flow-on impacts, it's important to think that or to recognise that if you have funds set aside, if you spend them now for a particular reason, they aren't available in the future for perhaps the reason that you might have been setting aside those reserves in the first place.

Chris Riches

I guess it's important to realise that when you're talking about the flow-on impact again, we look back at things like forecasting and things like budgeting and those sorts of things, being able to look a little bit into the future. Now, again, another aspect when it comes to charity money here is funding arrangements and agreements, maybe grants, projects that are part of an agreement with a funder. This is something a lot of charities might have already moved on, chatting about these sorts of projects funded by others with those who they're working with.

Now, if those projects are up in the air, being held over, delayed, those sorts of things, it's important to have again that conversation with the people who you need to talk to, to just make sure that the message gets across, particularly if you're worried that your charity might not be able to hold up its end of the commitment. So talking and holding those conversations again is vital.

Mel Yates

Absolutely. Charities need to think about whether their priorities have changed. For many charities going through COVID and the current environment following the bushfires and drought, many charities have changed what they want to do in the immediate short term and also in the medium to longer term. So it's really important to think about what is the purpose of your organisation, what is its mission, and what is its strategy? Make decisions about what can still be delivered in terms of programs.

Importantly, talk to anyone who is funding your organisation and potentially, if you need to think about changes then discuss alternatives. There might be a delay to a particular project or a project may need to be changed so it may need to look a little bit different. Does that mean that any grant agreements need to be adjusted, the timelines need to be changed? Milestones, any outcomes that have been agreed or key performance indicators or payment schedules, does anything need to change in any of those areas?

I think it's also important to talk about potential extensions to grant agreements to provide the charity with certainty if that will help the organisation. Or if you've been given a grant for a particular reason but you haven't spent it all, does that mean that those unspent funds can be kept or can be rolled over into a future period or used for another reason? So, all of these things are really important for charities to start thinking about. There's a really useful piece on the SmartyGrants' site which is called Grantmaking in a COVID-19 world. That's aimed at grantmakers but it still does contain some useful information to grantees as well.

Chris Riches

We'll include a link to that piece too, again in the handouts and in the follow-up email so that you've got a link to it and you can have a read. It's well worth having a read. Government stimulus and financial reporting considerations. I'm having a look at my clock and we've only got 10 or so minutes. So, my goodness, I've forgotten how quickly some of these webinars can go.

But on these topics, there's been a number of obviously stimulus and support measures been put in place. Again, there's a good rundown on our COVID page particularly when it comes to ones from the government. The ATO website, the tax office website has a lot of information available too, as do websites from state and territory governments.

But if your charity has been receiving some benefit or stimulus or one of the packages from the government perhaps, it may be reaching a time where some of these measures are wrapping up. Now, if that's the case, we probably need to be a little bit mindful of some of those things. What are perhaps some of the examples, Mel, just quickly of a couple of them that might be wrapping up very soon?

Mel Yates

Sure. The one that everyone is probably aware of is JobKeeper. That's currently scheduled to finish on the 27th of September. There's also some Safe Harbour provisions that were introduced by governments relating to insolvent trading for companies limited by guarantee. But the ACNC has made a statement that it will apply those principles to all registered charities. That finishes on the 25th of September.

It's really starting to think about the end dates for these things and what that means for the charity. Now, we know that the government is going to make announcements about some of these programs. We haven't yet heard those announcements but you need to start thinking about what will happen if they do end.

Chris Riches

A key thing here too is to be realistic, isn't it, Mel, to perhaps again start having the talks with the people you need to talk to?

Mel Yates

Absolutely. So if you've got an accountant, if you're lucky enough to have the expertise of someone or any professional who provides advice, make sure that you're asking questions and starting to plan for these potential outcomes now so that your charity is informed and in a good position to respond accordingly.

Chris Riches

Now, financial reporting consideration is here as well. There are some end dates coming up on a couple of requirements related to reporting to the ACNC. One of them, obviously as you probably know about is the extension to charities' Annual Information Statement lodgements. For the 2019 AIS, the extension runs until the 31st of August. Now, there's also relief for the Governance Standards and ECS that ends on September the 30th. Responsible Persons again need to be aware of these things. What else do we have there, Mel?

Mel Yates

Absolutely. It's really making sure that Responsible Persons and all directors start to think about their charity's operations and the going concern basis for financial statements. Now, that's an accounting term which I won't go into now. But really, what that means is when your organisation prepares financial statements the default position is that those financial statements are prepared on the basis that the organisation is going to continue for a further 12-month period.

So if there is any reason that the organisation will not continue because of particular uncertainty, then that needs to be disclosed in the financial statements. If your charity has been receiving any government stimulus payments or packages, then be open about that. Be transparent and disclose that in the financial statements. If COVID-19 has had a really big impact on your operations or has really affected the charity, again disclose that and be transparent so that anyone looking at your financial statements can be quickly made aware of how that impact has affected your organisation.

It's really important again if you use reserves. Explain that in the financial statements and make sure that members or any other important stakeholders that support your charity, make sure they're aware of the financial statements. Make sure that they have an opportunity to ask questions and document and capture any decision making.

Chris Riches

Definitely. We look at, and there's some points here on the screen too, issues around the preparation of charity financial statements. The Responsible Person's declaration, that there needs to be the proper declaration of anything that might be important to the reader of any financial statements that should be disclosed. Responsible Persons are also reminded that they will need to sign off on the solvency declaration when submitting to the ACNC at the same time so that we know and they know, that they say that they can pay off their debts when they're due and when they're payable. Again, as a reminder, charities should be looking to refer to the ACNC COVID page again,

Now, we'll whizz through these. Meetings and AGMs, another very obvious, very practical way that charity operations have been affected by what's been going on here and around the world. One thing that is clear is that there are many organisations who are holding meetings very differently to how they may have held them even six months ago.

The way we've experienced meetings over the past few months has changed with the use of Skype, Zoom, Teams, those sorts of things. That's increased greatly. It's been a very tangible way. We felt the impacts of physical distancing due to COVID-19. Lots of charities and non-for-profit groups are preparing to approach their AGMs and the changed way we stage meetings will again become very relevant to them.

The rules and regulations surrounding the ability to hold meetings and AGMs using technology have changed in many respects. They've changed to allow greater flexibility in online or tech-dependent meetings, again more info on that on the COVID page. But when it comes to holding meetings remotely and even AGMs remotely, Mel, what maybe some very quick tips that we would have for charities?

Mel Yates

If it's more efficient to use technology to run a meeting virtually then think about how that can be incorporated going forward. Can virtual meetings work? Are they better and what, if any, operations can be maintained online? But be aware that if for example you're an incorporated association then you need to make sure you're aware of what your state or territory requirements are. Some jurisdictions have changed and as you said, provided a bit more flexibility. But some haven't necessarily provided that flexibility. So it's really important that you understand what applies to your particular charity.

Chris Riches

Look, there's a very, very good resource that we've recently put together that's up on the ACNC website on virtual meetings or remote meetings as they're called. It's Definitely take a look at that. That's well worth a read, very informative, very heavy resource.

A few more practical points here when it comes to actually staging the meetings. Ensure everyone can connect and properly communicate, speaking and listening. Communication flows both ways. Ensure members are allowed the opportunity to ask questions, particularly at AGMs. It can be a really good idea to organise for something as simple as a test meeting or for people to connect early if you're meeting virtually or remotely for the first time. This can be a very practical way to ensure that everyone is able to connect and everyone is able to hear and to speak.

Ensure people have access to the key documents including financials, agendas, meeting minutes, all of those sorts of things. If there are votes needing to be staged as well, ensure these are done clearly easily and transparently. There are apps. There are ways of doing those online. A suggestion would be to have a bit of a look around the internet or again, talk to fellow charities to get a little bit more information about perhaps what they've used. There are definite options there though.

So the final little bit, recordkeeping. Again, if we're doing forecasting and financials and all of that sort of stuff, recordkeeping of course comes into play again. Charities are of course obliged to keep records. Recordkeeping is vital right now, particularly when it comes to documenting your charity's decisions and where it's going with its finances. The first key thing to remember here is that recordkeeping doesn't just mean having printed files and it doesn't mean that you only have printed files. Electronic recordkeeping is fine, isn't it, Mel?

Mel Yates

Absolutely. It's really important. Whatever way your charity decides to document decisions, whether that's electronic, paper, virtually, whatever it is, it's really important that it is done well and it's a sign of good overall charity governance. Also, it's really important, a reminder, that charities need to document when there are changes to their Responsible Persons. So a quick plug that that can be done through the ACNC charity portal.

Chris Riches

Indeed. Now, we've got about four or five quick tips that we'll run through just before we finish things up. Thank you to everyone for hanging online. We know we have a 1:00 deadline. We've got about two minutes ahead of us. So thank you again.

What we'll do, our top tips – first top tip, the best interests of your charity in line with its purposes and its governing documents. It's a key thing for Responsible Persons to remember when they're making decisions, when they're forecasting and that sort of stuff. The second tip is that financial forecasting needs to be realistic. As we mentioned earlier on, as Mel mentioned earlier on, perhaps verging on the conservative, and maybe worst-case scenarios need to be considered as well. What are our next two tips here, Mel?

Mel Yates

Does your fundraising strategy and your activities fit the new normal? So think about changes that you need to make for your organisation to navigate the changes that we've seen in our current environment. Thinking about collaboration, can you work with any other charity, any other funders or any other organisations to improve your charity's operations to get better efficiencies or to learn new ways of doing things?

Chris Riches

The fifth tip that we've got here regarding meetings and the decision-making process is ensure that they're accessible. Ensure that the decisions are made transparently and recorded properly. Again, record keeping is vital here.

Now, we're going to have questions but I've subtly skipped over that one because we're almost out of time. So what we'll do is we'll wrap up here. Again, just a reminder that the recording of this webinar, the slides, web links and other relevant stuff, it's going to be up on the website in the coming days. We'll also get an email out to everyone who registered so that they can read the articles that we've mentioned and go to the various relevant pages that we got up on our website.

What we'll also do is we'll have a recording obviously of the webinar up on the ACNC website as quickly as possible. You could be able to access that through, this most recent one and all of our ones in the past as well. As you can see, these are other ways you can stay in touch with us. Note our new e-monthly, The Charitable Purpose. That contains a lot of good information, news resources and the regular Commissioner's Column as well so well worth a look. Finally before we go, a big virtual remote thank you to everyone who has attended today and a big virtual remote thank you to Mel. Thank you very much, Mel.

Mel Yates

Thank you, Chris.

Chris Riches

Thank you, to Maggie and to Matt, who have been typing away madly in the background answering people's questions. Hope that you've enjoyed our presentation today. Thank you very much for coming along. It's been great to be back and doing this again. We look forward to you joining us again in the near future. Have a great day everyone and stay safe most importantly as well. See you later.