Charity governance performance review reveals room for improvement

first_img About Melanie May Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via www.thepurplepim.com. Tagged with: governance Research / statistics Charity governance performance review reveals room for improvement  353 total views,  2 views today A new measure of charity compliance with the Governance Code has found charities scoring an average of 52% according to audit, tax and consulting firm RSM.RSM analysed 85 charities with incomes of over £5m to determine whether they were demonstrating behaviours and evidence of compliance with the Governance Code.Charities were scored out of 100 according to evidence of adoption of the Code and evidence of compliance within their annual reports and on their own websites. The overall rating also included a score for a charity’s compliance with each of the seven principles contained in the Code. These principles include organisational purpose, board effectiveness, openness and accountability, diversity, leadership, decision-making and integrity.Of the 85 charities surveyed:The average overall Governance rating was 52%, indicating that charities are applying the Code but have significant room for improvement44% acknowledged the Code within their annual reportsA quarter of all charities surveyed consistently demonstrated a strong application of good governance with scores of over 70%The highest scoring charities rated 91%, while the lowest performing charity achieved a 17% rating.According to RSM, larger charities with over £20m in income tended to score better with an average score of 58%, suggesting that resource plays a significant part in an organisation’s ability to implement a strong governance framework and demonstrate compliance. Smaller charities (£5m to £10m revenue) scored 47%, on average. However, mid-size charities with incomes between £10m and £20m scored less at 39%.Medical and health charities, animal/environment charities and overseas aid charities achieved relatively higher scores, while sporting and arts charities appeared to have most scope to improve.Common failings identified in the research included the failure to outline a board’s review processes when it came to making executive appointments, trustees exceeding their suggested nine-year terms without explanation and failing to address senior staff remuneration levels in annual reports.In terms of the seven principles included in the Code, one area where many charities were falling short related to diversity. In many cases, there was no evidence of compliance with the diversity principle. RSM advises that at the very least charities should be including a diversity statement in their annual report and on their website, and should also consider a diversity policy that acknowledges the key areas in the organisation which need improvement.Nick Sladden, RSM’s head of charities and the author of the report said:“One of the biggest challenges currently facing charities is one of trust. Several high-profile scandals have rocked the reputation of the charity sector as a whole. Further deterioration could hit charities’ bottom lines with knock-on effects for staff and the services provided to beneficiaries.“Demonstrating effective governance is therefore absolutely key to ensuring that the sector can continue to rely on public generosity, interest and support. However, our research shows that while there are examples of best practice, average scores are disappointing and some charities have a lot of room for improvement.“One of the more interesting findings in our research was that those charities that have adopted the latest Charity Governance Code scored higher governance ratings than those that hadn’t. For charities that have been watching and waiting, now is the opportunity to embrace the Code and drive up governance standards.” Advertisement AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to LinkedInLinkedInShare to EmailEmailShare to WhatsAppWhatsAppShare to MessengerMessengerShare to MoreAddThis17  354 total views,  3 views today AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to LinkedInLinkedInShare to EmailEmailShare to WhatsAppWhatsAppShare to MessengerMessengerShare to MoreAddThis17 Melanie May | 30 May 2019 | Newslast_img read more

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Supreme Court amends IOTA rule

first_imgSupreme Court amends IOTA rule Mark D. Killian Managing Editor The Florida Supreme Court has amended Bar rules to open the IOTA program to financial institutions other than banks and require those holding the trust accounts to pay interest rates or dividends commensurate with those offered to their non-IOTA depositors.“Not only does this amendment have the unanimous endorsement of the [Bar] Board of Governors, but nearly all of the comments received have been overwhelmingly in favor of the purpose behind the amendments,” the unanimous court said in its June 14 opinion amending Rules 5-1.1(e). Case no. SC01-851.The Florida Bar Foundation sought the amendment as a way to increase IOTA revenues by broadening the types of institutions that may participate in IOTA. Florida Bar Foundation President A. Hamilton Cooke said the new provision has the potential to double the money generated by the IOTA program and includes language that requires any institution that wants to handle IOTA accounts to offer the same market rate of interest or dividends on products available to non-IOTA depositors with comparable balances. “We are extremely pleased by the court’s action,” Cooke said. “Of course, the real beneficiaries are the individuals and families served by IOTA legal aid grantees. The Foundation will work directly with banks and savings and loan associations, which currently hold IOTA accounts, to implement the new rule. July 1, 2001 Managing Editor Regular News Supreme Court amends IOTA rulecenter_img “The Florida Banker’s Association was very helpful in this whole process, and we look forward to working cooperatively with our bank and savings and loan association partners, and to a smooth transition,” he added. “We also expect to meet very shortly with investment companies to familiarize them with the IOTA program and the fact that IOTA programs in several other large states have expressed interest in securing similar rule amendments.”Under the plan, the Foundation, not the lawyer, will be responsible for initiating steps to implement the new rule and for monitoring usage of banks’ and financial services companies’ existing products available to non-IOTA depositors, in order to determine compliance with the IOTA rule.In accordance with the Foundation’s request, the court made the amendment effective July 14.“However, those institutions currently holding IOTA accounts that elect to participate in IOTA under the new rule shall be provided six months to comply with the new eligibility requirements,” the court said. “The Foundation shall be charged with the responsibility of determining the initial and continuing eligibility of banks, savings and loan associations, and investment companies to hold IOTA accounts in accordance with the criteria set forth in the rule.”The old rule permitted only banks or authorized savings and loan associations to participate in IOTA. Under the new amendments, open-end investment companies will be allowed to qualify as eligible institutions in which IOTA accounts may be established. The amendment also allows the use of government money market funds for IOTA funds; however, only money market funds that are registered with the Securities and Exchange Commission, and are comprised solely of United States government securities, are permitted for use in the IOTA program. The court also said only those money market funds with a total asset value of at least $250 million would be eligible to participate.Foundation Executive Director Jane Curran said the rule change means financial services companies such as Morgan Stanley or Merrill Lynch will be able to hold IOTA accounts.Under the current program, Curran said, total IOTA revenue will amount to about $11 million this year, and has been steadily falling since the mid-1990s as interest rates have waned and bank service charges have risen. At its peak, IOTA was generating about $19 million a year for legal aid, administration of justice, and law student assistance programs. Due to the combination of low interest rates and high services changes, the Foundation has been forced to reduce grants by 15 percent over the past two years.The court also said in light of the concerns expressed in the comment of the Florida Bankers Association, the final rule was clarified to reflect the intent that there be interest parity between IOTA accounts and non-IOTA accounts held in the same financial institution.“The Foundation recognizes, however, that the interest rates offered are not based on account balance alone,” the court said.“We adopt the FBA’s suggested revisions to proposed subdivision (e)(5)(A) and add proposed subdivision (B) to the rule,” the court said. “The Foundation has indicated it has no objection to the FBA’s suggested revisions. We thank the FBA for its assistance, cooperation and constructive suggestions.”As part of the plan, the Foundation also said it will independently work with banks and financial services companies to develop appropriate products which are in compliance with the IOTA rule.That would include providing them computer and technical support needed to remit IOTA earnings to the Foundation and conduct the required reporting.More information about how the new IOTA rule will operate can be found on the Bar’s website at www.FLABAR.org. A. Hamilton Cooke last_img read more

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