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Exclusive: Finance 101: 5 steps for non-profit organisations to educate and empower trustees



Finance 101: 5 steps for non-profit organisations to educate and empower trustees

#Finance #steps #nonprofit #organisations #educate #empower #trustees

Strong financial governance is an important part of running an effective non-profit organisation (NPO) or charity.

Much responsibility lies with trustees, people who have a vital, demanding (and often unpaid) role in governing an NPO and directing how it’s managed and run.

Trustees make sure all decisions put the needs of the beneficiaries first. If they fail to meet their obligations, they can be held personally liable.

In this article, we cover a series of steps so you can explain your NPO’s finances to your trustees, so they can fulfil their role of signing off accounts.

Here’s what we cover:

Trustee responsibilities

Understanding financial responsibilities as a trustee

How to help your trustees understand your financials

Final thoughts: Support your trustees


Trustee responsibilities

The Charity Commission lists six responsibilities of trustees:

  • Ensure your organisation is carrying out its purposes for the public benefit
  • Comply with your organisation’s governing document and the law
  • Act in your organisation’s best interests
  • Manage your organisation’s resources responsibly
  • Act with reasonable care and skill
  • Ensure your organisation is accountable.

You could apply all these responsibilities to finance, but it’s the last point above that includes the need to produce and file statutory accounts.

The bulk of this responsibility could fall to the treasurer, working with the finance manager or other staff as appropriate. But trustees have overall control of an NPO and are responsible for making sure it’s doing what it was set up to do.

Understanding financial responsibilities as a trustee

Your trustees have responsibility for overseeing your NPO’s money.

Trustees are required to sign off on accounts, and if they are to act with reasonable care and skill, they need to understand their NPO’s finances.

However, it’s common that they find the finances hard to engage with, compromising their role and making it hard for the board to function effectively.

Trustees have a difficult job as they must shoulder a disproportionate amount of responsibility.

If they’re involved in strategic and operational discussions without sound financial understanding, they could be ineffective and potentially cause damage to your organisation’s future due to gaps in their knowledge.

Trustees must make sure that money is only spent on what’s allowed by your NPO’s governing documents and policies—if it isn’t, it’s on them to put it right.

How to help your trustees understand your financials

Understanding financial management as a trustee is vital.

Below are five necessary steps to help your trustees take an active role in the financial management of your organisation.

We’d recommend a briefing session for all new trustees and those requiring an update, supported with appropriate presentation materials.


1. Consider the trustees’ current level of financial knowledge

There’s no point in teaching financial management concepts to a trustee if they already know them.

So it’s essential to understand their current level of financial knowledge and appropriately adjust the information you give them.

Let’s imagine some trustees know the financial basics while others don’t. It may be wise to split them up into groups.

You could separate those who need a basic grounding in accountancy from those who know the basics and need more information on specific areas related to NPO finance.

2. Explain key financial fundamentals


  • Always look ahead. Financial information is out of date by default because it’s telling us what has already happened.
  • Use financial information to understand the organisation’s status with one eye on the future.
  • Forecasting budgets is crucial in giving you a picture of where you think the NPO will be in the future. It’ll help you set the right financial target.

Statement of financial activities (SoFA)

  • A statement of financial activities (SoFA) is one of the main financial statements your NPO will issue.
  • A SoFA is sometimes called an income and expenditure statement, or a receipts and payments account.
  • The SoFA corresponds to what commercial businesses call the profit and loss (P&L) account (also known as a profit and loss statement, or income statement).
  • The SoFA is a financial report summarising income, expenditure, and gains and losses incurred during a specified period—usually a month, a fiscal quarter, or a year.

3. Explain every significant income stream

With increased competition for grants and donations, you’ll have to keep a close eye on where your income is coming from.

Your trustees need to understand:

  • Who is funding, commissioning and donating? If you’re part of an NPO that trades, you’ll also have customers.
  • What activity is your NPO performing to secure the income? Examples include the delivery of grant-funded projects, commissioned services, and supply of a product if you’re trading.
  • The expenses associated with delivering each of the activities, such as major contracts and sub-contracts, as well as staff delivery, material, and travel costs. In the commercial world, these expenses would be called cost of sales.
  • Historical and budgeted income, as well as restrictions.

You should then explain all other cost categories, such as fundraising, marketing costs and overheads.

Also, provide details of any other significant contracts, such as property leases.

4. Explain balance sheet terminology

You should explain everything in your balance sheet (known as a statement of financial position for NPOs).

Fixed assets 

A fixed asset is a long-term tangible piece of property or equipment that an organisation owns and uses in its operations to generate income.

It isn’t expected to be consumed or converted into cash within a year.


A debtor is a company or individual who owes the organisation money.

Sometimes referred to as accounts receivable or receivables.



This is money in the bank.


A creditor is a person or company to whom money is owing. You typically split them between:

  • Accounts payable or payables: Amounts falling due with one year. 
  • Long-term liabilities: Amounts falling due after one year.

General fund

The money you have available to use freely to further your charitable aims.

You sometimes refer to general funds as unrestricted funds.

Restricted funds

You are given restricted funds for a specific purpose and ring-fence them as such. Sometimes time constraints are also imposed.

Once your trustees are confident about what these terms mean, walk them through your balance sheet covering each category.

5. Explain how the management accounts map to the statutory accounts

Typically, finance provides trustees with financial reports called management accounts.

These could include income and expenditure accounts, cash flow forecasts, financial projections, and a balance sheet.

There are three critical reasons for creating regular management accounts for your trustees to review.

They are to:

  • Measure current performance
  • Allow financial decision making
  • Provide evidence that you’re fulfilling financial oversight responsibilities.

Your NPO should produce management accounts regularly (ideally monthly, but sometimes quarterly).

Statutory accounts are reports produced after the end of the financial year to provide a formal record of the financial activity and position of the organisation.

  • Management and statutory accounts may have different levels of detail, aggregating and separating costs in different ways.
  • Your job is to explain any differences between management and statutory accounts.

Final thoughts: Support your trustees

We’ve given you five steps to work through in explaining your NPO’s finances to trustees, but you should also outline any other points of financial significance.

Finally, remember this point.


If you’re managing finances for an NPO, you should get trustees to a position where they understand enough about finance to ask questions and approve year-end accounts.

Good luck.


Exclusive: Spirit delays shareholder vote on merger hours before meeting to continue deal talks with Frontier, JetBlue –




Spirit Airlines says it will decide on competing JetBlue, Frontier bids before the end of June

#Spirit #delays #shareholder #vote #merger #hours #meeting #continue #deal #talks #Frontier #JetBlue

A Spirit Airlines plane on the tarmac at the Fort Lauderdale-Hollywood International Airport on February 07, 2022 in Fort Lauderdale, Florida.

Joe Raedle | Getty Images

Spirit Airlines on Wednesday delayed shareholder vote on its proposed merger with Frontier Airlines until July 8, hours before a meeting scheduled for Thursday so it can further discuss options with Frontier and rival suitor JetBlue Airways.

It is the second time Spirit has delayed a vote on its planned combination with Frontier and extends the most contentious battle for a U.S. airline in years.

Spirit originally scheduled Thursday’s vote for June 10 but had delayed that for the same reasons.

Both Frontier and JetBlue have upped their offers in the week before the scheduled vote approached.

“Spirit would not have postponed tomorrow’s meeting if they felt they had the votes,” said Henry Harteveldt, a travel industry consultant and president of Atmosphere Research Group. Spirit didn’t comment on whether that is the case.

“We compliment the Spirit Board for listening to their shareholders, who clearly were not supportive of the Frontier transaction, and adjourning the Special Meeting,” JetBlue CEO Robin Hayes said in a statement later Wednesday.


“It’s clear that Spirit shareholders have now handed the Spirit Board an undeniable mandate to reach an agreement with JetBlue.”

“This is like the end of a soap opera episode,” Harteveldt added.

Frontier and Spirit first announced their intent to merge in February. In April, JetBlue made an all-cash, surprise bid for Spirit, but Spirit’s board has repeatedly rejected JetBlue’s offers, arguing a JetBlue takeover wouldn’t pass muster with regulators.

Either combination would create the United States’ fifth-largest carrier.

JetBlue has fired back at Spirit, saying it did not negotiate in good faith, setting off a war of words between the airlines as they competed for shareholder support ahead of the vote.

Frontier didn’t immediately comment about the postponed vote.

Spirit shares were up about 2% in afterhours trading, while Frontier was up more than 1% and JetBlue was down 1%.

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Exclusive: Get hype for the first images from NASA’s James Webb Space Telescope –




Get hype for the first images from NASA’s James Webb Space Telescope

#hype #images #NASAs #James #Webb #Space #Telescope

Very soon, humanity will get to view the deepest images of the universe that have ever been captured. In two weeks, the $10 billion James Webb Space Telescope (JWST) — NASA’s super expensive, super powerful deep space optical imager — will release its first full-color images, and agency officials today suggested that they could just be the beginning.

“This is farther than humanity has ever looked before,” NASA Administrator Bill Nelson said during a media briefing Wednesday (he was calling in, as he had tested positive for COVID-19 the night before). “We’re only beginning to understand what Webb can and will do.”

NASA launched James Webb last December; ever since, it’s been conducting a specialized startup process that involves delicately tuning all 18 of its huge mirror segments. A few months ago, NASA shared a “selfie” marking the successful operations of the IR camera and primary mirrors. Earlier this month, the agency said the telescope’s first images will be ready for public debut at 10:30 AM ET on July 12.

One aspect of the universe that JWST will unveil is exoplanets, or planets outside our Solar System — specifically, their atmospheres. This is key to understanding whether there are other planets similar to ours in the universe, or if life can be found on planets under atmospheric conditions that differ from those found on Earth. And Thomas Zurbuchen, associate administrator for NASA’s Science Mission Directorate, confirmed that images of an exoplanet’s atmospheric spectrum will be shared with the public on July 12.

Essentially, James Webb’s extraordinary capacity to capture the infrared spectrum means that it will be able to detect small molecules like carbon dioxide. This will enable scientists to actually examine whether and how atmospheric compositions shape the capacity for life to emerge and develop on a planet.

NASA officials also shared more good news: The agency’s estimates of the excess fuel capability of the telescope were spot on, and JWST will be able to capture images of space for around 20 years.

“Not only will those 20 years allow us to go deeper into history and time, but we will go deeper into science because we will have the opportunity to learn and grow and make new observations,” NASA deputy administrator Pam Melroy said.

JWST has not had an easy ride to deep space. The entire project came very close to not happening at all, Nelson said, after it started running out of money and Congress considered canceling it entirely. It also faced numerous delays due to technical issues. Then, when it reached space, it was promptly pinged by a micrometeoroid, an event that surely made every NASA official shudder.

But overall, “it’s been an amazing six months,” Webb project manager Bill Ochs confirmed.


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Exclusive: Fight for Spirit Airlines goes down to the wire with competing bids from Frontier and JetBlue –




Fight for Spirit Airlines goes down to the wire with competing bids from Frontier and JetBlue

#Fight #Spirit #Airlines #wire #competing #bids #Frontier #JetBlue

The most heated airline battle in recent years comes to a head on Thursday when Spirit Airlines’ shareholders vote on a proposed tie-up with fellow discount carrier Frontier Airlines while rival suitor JetBlue Airways circles with increasingly sweetened takeover bids.

Spirit has repeatedly rebuffed sweetened, all-cash bids from JetBlue, arguing that such a takeover wouldn’t pass muster with regulators, and has stuck with its plan to combine in an also-sweetened cash-and-stock deal to combine with Frontier, first announced in February.

JetBlue’s surprise all-cash bid in April set off a fight over Spirit that last month turned hostile.

If Spirit shareholders vote in favor of the tie-up with Frontier, it would put the carriers on the path to creating a budget airline behemoth. The two carriers share a similar business model based on low fares and fees for almost everything else from seat selection to carry-on bags.

A Frontier Airlines plane near a Spirit Airlines plane at the Fort Lauderdale-Hollywood International Airport on May 16, 2022 in Fort Lauderdale, Florida.

Joe Raedle | Getty Images

If shareholders vote against the deal it opens the door for a takeover by JetBlue, which would retrofit Spirit’s yellow planes to look like JetBlue’s, including cabins with seatback screens and more legroom.

“JetBlue does not have many options to achieve a step-change in growth, and that explains why JetBlue has pursued this deal so doggedly,” said Samuel Engel, aviation consultant at ICF.


JetBlue and Frontier have each argued their proposed transactions are key to their future growth, helping them better compete with large U.S. carriers and get fast access to Airbus narrow-body planes and pilots.

Either deal would create the fifth-largest U.S. airline.

Late Monday, JetBlue said it would raise the reverse breakup fee if regulators don’t approve a JetBlue takeover of Spirit to $400 million from $350 million. It also raised the amount it would pay up in advance to $2.50 a share, from $1.50 and added a 10 cent-a-share monthly payment to shareholders starting next year until the deal is consummated or terminated.

JetBlue previously offered to divest some assets in crowded markets to calm antitrust fears, but hasn’t said it would give up its alliance with American Airlines in the Northeast U.S., which Spirit has called out as a sticking point in that deal.

JetBlue’s latest offer came after Frontier late Friday raised the cash portion of its offer by $2 per share to $4.13 and increased the reverse breakup fee to $350 million to match JetBlue’s then-offer.

Spirit has stuck with the Frontier deal. CEO Ted Christie on Tuesday called the Frontier offer “very compelling” and told CNBC the airline wants to “focus our efforts on convincing the shareholders it’s the right thing to do.”

Proxy advisory firm Institutional Shareholder Services on Tuesday said that “the enhancements by JetBlue may be enough to offset the potential upside of the proposed merger with Frontier” but said it didn’t want to change its recommendation in favor of the deal with so little time before the vote.

Spirit postponed the vote from June 10 to continue deal talks with Frontier and JetBlue.

War of words

For weeks, JetBlue has argued that Spirit’s board hasn’t negotiated in good faith or fully considered its offer. It has repeatedly urged the budget airline’s shareholders to vote against the Frontier deal.

“The Spirit Board consistently ignored or refused to engage with JetBlue until faced with certain defeat on the original shareholder meeting date and then, in an attempt to avoid the widespread perception of its poor corporate governance, pretended to engage with JetBlue,” JetBlue said in a letter Wednesday again urging Spirit shareholders to vote against the Frontier deal.

Spirit has repeatedly denied claims that it hasn’t engaged with JetBlue in good faith.


“Our board believes [the Frontier merger] is the most financially and strategically compelling path forward for Spirit with a greater likelihood of closing,” Christie said in a video message addressing shareholders on Wednesday.

All three carriers have traded heated words as they try to win over Spirit shareholders before the shareholder vote.

JetBlue late Monday wrote a letter to Spirit shareholders detailing its latest sweetened bid and accusing Spirit of making “misleading statements” regarding its antitrust doubts.

Frontier fired back in a lengthy news release Tuesday saying that “a Spirit acquisition by JetBlue would lead to a dead end — a fact that no amount of money, bluster, or misdirection will change.”

The high drama is coming from an already-consolidated industry that hasn’t seen a major airline deal since 2016, when JetBlue lost out to Alaska Airlines for Virgin America.

“This is as much as a potboiler for the summer than any trashy novel,” said Henry Harteveldt, a former airline manager and president of of Atmosphere Research Group.

High regulatory bar

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