Managing funds for short-lived crisis-response groups
How to manage your money if your group has been set up quickly to respond to the Covid-19 crisis
If your group has been set up in response to the Covid-19 crisis, you will be wanting to act quickly. You will not have had time to open a bank account in your group’s name, and you may not have thought about producing any written guidelines at all for your group. If your group will only exist for a short time e.g. for the duration of the Covid-19 lockdown, you will not be expected to register with the Charity Commission. However, if your group will be handling money in any way, it is sensible to put some basic guidelines in place to protect your volunteers and your funds. It is a good idea to develop a:
You may also be able to apply for external funding if you have these things in place.
A constitution is simply a statement of what your group is doing and the rules you have agreed for doing it. It can be a very short and plain document. For short-lived, crisis-response groups, your constitution can just consist of a few sentences that clearly explain:
For example, you might sum up your aims as:
“To make sure everyone in xxxx neighbourhood has access to information and a place to ask for help if they need it during the Covid 19 crisis”
How you make decisions
Spend a bit of time thinking about how the group will make decisions. Will there be regular video or telephone meetings which everyone is invited to attend? Will you use online polls (eg Facebook polls)? Will you delegate decision making to a small group of people?
Whatever you agree on, write this down in your ‘constitution’ so that people joining the group can see how things work.
How you will manage your money
See below for more tips on this
What you will do with any money that is left at the end
For example, you might decide to donate any remaining funds to a local community centre or food bank. It’s a good idea to think about this in advance, so that your treasurer is not left having to make a decision on their own. It will also give some reassurance for people making donations, especially if they are giving money to a crowdfunder where the funds will be held in someone’s personal bank account.
If you would like to talk through your ideas about drawing up a constitution or a system for managing funds, feel free to contact us.
System for managing money
It is a good idea for your group to agree a simple system for how you will deal with money, and to write these agreements down. Your group’s money guidelines should include details of: banking; procedures for spending money; and record-keeping.
It is not good practice for groups to manage their money through an individual’s personal bank account. However, in the case of crisis-response groups, there is a need to act quickly and many groups have therefore started using personal bank accounts. If at all possible, it is better for groups to:
- Write a constitution and open a bank account in the name of the group; or
- Make an arrangement with a constituted community group that already exists in your area to manage your funds on behalf of your group; or
- Use an online service like Accountable, which acts like a bank and holds money on behalf of your group. Accountable is run by the Social Change Agency CIC and is designed specifically to help community groups who don’t have a bank account. Your group can simply and transparently manage your money using their online platform. The service is currently free for groups responding to the pandemic.
If your group is using a personal bank account, it is important to agree on some specific guidelines that you will follow. For example,
- Have a clear process for when and how group funds are transferred into and out of the bank account
- Have a ‘treasurer’ who keeps records of all funds received by the group, the amounts transferred into personal accounts, and the amounts transferred out of personal accounts
- If you are using an online fundraising tool, have at least two members of the group who are ‘administrators’ or owners;
- Make sure the group double checks that the treasurer’s records match the amounts that were recorded in the fundraising tool.
Procedures for spending money
Your group should agree some basic procedures for making decisions about money and approving payments. This should include a process for at least two people, who aren’t related and don’t live in the same household, to approve every payment. This is particularly important if your group is using an individual’s personal bank account. You can either use a paper form which is signed by two people, or an email which must be responded to by both people to give approval. Whichever you choose, the form or email should include:
- Exact amount of money
- What the money will be spent on
- Names of the two people approving the payment
You will need to keep some clear financial records either in a book or in an electronic account system. It is a good idea to elect one person to act as ‘treasurer’ and take responsibility for keeping these records. We have simple account systems that you can download and use for free, and more details on the role of the treasurer that may be useful.