Organizational audit of small charities and non-profit organizations

Are grants spent effectively?

Funding bodies who donate to small charities are increasingly requiring evidence that the money is spent effectively and achieves objectives that are congruent with those of the funding body. With conservation charities, the benefits may be intangible and difficult to quantify, such as the contribution of an open space to well-being and quality of life. Or they may take a long time to come to fruition, such as habitat improvement or new woodland. Large organizations can buy in professional organizational audit, but this is costly and inappropriate for small and new charities.

Audit instrument

This paper describes an instrument for assessing the effectiveness of an organization in achieving its or the donor’s objectives and in getting things done efficiently. Though developed for an application for revenue funding, there is a generic version, adaptable to other organizations or circumstances. The independent assessor’s report could be used as a supporting paper when applying for a grant. The assessor could be an experienced manager of conservation organizations, rather than a highly specialized audit professional. Detailed financial audit is not included in this instrument, as UK charities will normally cover this with an accountant and independent examiner who report to the Charity Commissioners. The assessment could be carried out annually as an ‘MOT’ of the effectiveness of the organization, at a cost of about £300. The instrument is in three parts:

1. The protocol

This contains lists of items to be assessed and actions to be taken by the assessor, separated, as far as is feasible, into Structure, Processes and Outcomes. Measurable, objective actions are included where possible, but some will need the assessor to make a judgement based on observation and experience. A list of stakeholders and targets is included.

2. Profile of the organization

This is a detailed document prepared by the officers of the organization setting out the aims, history, nature and setting of the charity and how it carries out its work. The names and qualifications of trustees, officers and staff are included, as well as the activities, policies, by-laws, sources of income and projects completed. Management routines and office arrangements and records are described.

3. Questionnaire for assessor

This currently contains 20 questions which the assessor will rate on a Likert scale, covering structure, processes and outcomes, public usage and satisfaction. The charity’s office and records will be inspected as well as the assets such as land, buildings and machinery. The questionnaire would need to be tailored to the project.

Are you interested?

Any small UK charities who wish to see our detailed protocol, profile and questionnaire could apply to the administrator, and these could be e-mailed at no charge. Grant-giving bodies and authorities who might wish to use this audit instrument for their own activities might be asked for a donation to cover costs.

E-mail address: peter@hurst-water-meadow.co.uk

Postal address: The administrator, Hurst Water Meadow Trust, 19 Page Furlong, Dorchester on Thames, Wallingford, Oxfordshire, UK  OX10 7PU. Website: www.hurst-water-meadow.co.uk       

Extract from Hurst 2008 report (PDF)