Charity Finance Group has launched a sector-wide consultation on banking and payment systems. But why are we doing this and how can you help?
Having the right access to financial services and using the most efficient payment systems is critical to the work of the charity sector. But these critical (but often invisible) enablers are ignored. Charities, like all organisations, need to be able to deposit, send and manage their resources effectively and trustees and staff have a responsible to make sure that they are getting the best deals for their charity.
We have also noted over the past few months that some parts of the charity sector have had trouble accessing financial services. Small organisations have reported that banks do not want their business or that they are being asked to do ever higher levels of due diligence.
Charities that work in fragile environments such as Syria have also come under increased pressure from banks, with some losing access to their services or having to jump through additional hoops to carry out simple transactions. Some of this is down to increased requirements from governments at home and abroad (i.e. the US) as well as a reduction in the risk appetite of banks following the financial crisis.
However, there is also a surprisingly level of ignorance and a lack of understanding amongst charities about what services are available. At our most recent Banking Forum one of the themes to emerge was the need for better communication between charities and banks. Charities are often slow to update banks about changes to way that they are operating and this can mean that charities do not get the right services for their needs or that transactions are delayed. Banks are also not often aware of the unique services that charities require and how they operate, leading to some charities being offered unsuitable services or encountering delays.
On the payment systems front we have seen the creation of a new regulator, the Payment Systems Regulator, which is currently seeking to develop its new strategy. Efficient and effective payment systems are critical to the work of all organisations and we need to make sure that the voice of charities is heard in this debate so that no changes are made that disadvantage the sector. It has been a long time since there was last an effort to understand charities’ views on their banking services and what payment systems they use.
CFG has therefore launched a consultation on these issues and is asking all charities to take the time to fill out this short survey. So far the response has been positive with a rich source of data being gathered. However, I’d encourage you to share the consultation as far and wide as possible so that we can get the best possible overview of how charities interact with these systems and the challenges that they are facing. The consultation will be running till the end of the year and will influence CFG’s work on these issues in 2016. We will also be writing a briefing note based on the responses which will lead to policy recommendations for charities, banks and for government. We are also considering re-issuing guidance on banking for both charities and financial institutions. This consultation is an important opportunity to shape the debate, so please make sure that your views are heard. CFG will also be regularly consulting with charities and banks through our Banking Forum. The Banking Forum discusses issues f you would like to attend the next meeting, please email firstname.lastname@example.org
Â« Back to all blog posts