Investing in sustainable clubs
Sustainable clubs operate sound financial systems focused on income generation and effective planning. Sustainable clubs use membership fees to cover core costs and any additional funding is used to add value to core club activities.
Sustainability in clubs
Sustainability is not just about finances. Its every bit as important to plan for sustainability in the number of people at your club in each of the following areas.
Sustainable financial model
Sustainable clubs have sustainable financial models. This should include
- income is maximised and maintained
- consistently operating within its means
- understanding the importance of having financial reserves
- implementing policies on the use of financial reserves
- an understanding of how the club sets its prices. This is a building block to a strong financial model. Structuring membership fees to cover core running costs builds a sustainable plan (potential task within session)
Financial reserves policy - coming soon
HMRC requirements – recording monies – what and how?
Understanding your accounts – balance sheets and assets
Annual accounts report – auditing your accounts and information for members
VAT – what does my club need to know?
Building sustainable projects and increasing cash flow for investment back to the club (potential task within session)
Gift Aid – could this work for my club?
Recruit a skilled treasurer - World class clubs that have effective financial controls and management systems have appropriately skilled treasurers. Treasurer- Role description
Clear policies and procedures for managing the club funds reduce any risk of confusion. Policies such as two signatories, a reserves policy, constitution that details the maximum spend before a whole committee decision is required.
Annual budget - A financial report should be made available annually but clubs can also keep in touch with their bank balance through regular updates on the club accounts.
Independent audit - An independent audit is more likely to find (If any) the simplest of accounting mistakes or the misuse of funds. Any clubs that are struggling financially can benefit from having an independent audit to highlight where they can build a stronger financial model. Charity Accountants - guidance
HMRC - Helping your charity or club pay the right tax and claim the reliefs it's entitled to
Accounting systems and software - coming soon
Budgeting/ Cash flow forcasting - coming soon
Financial risk management template - coming soon
Self generate income - World class clubs self generate income through membership fees and basic fundraising to cover basic costs with external funding and major sponsorships adding value to a clubs activities.
Add variety of income - Reduce risk by adding variety to their income from a wide range of donors, grants, service level agreements and contracts, social enterprise activity, trading goods and providing services. Diversify your income stream
Membership fees - Cover basic costs through membership fees
Grants and fundraising - Avoid relying solely on grants and fundraising. Use fundraising and applying for grants and sponsorship to add value to core club activities. List of funders
How to attract sponsorship - coming soon
Proposals - coming soon
Sponsorship agreements - coming soon
Keeping sponsors happy - coming soon
Succession planning can be defined as a process for identifying and developing potential future leaders of your club. In addition to training, succession planning can typically include work experience in a relevant key role.
Role of a treasurer
Treasurer - A treasurer is a person responsible for a clubs money. An update on a clubs accounts is often an agenda item required at all committee meetings to monitor the clubs accounts. A description some of a treasurers role is provided below.
- Responsible for the club finances
- Deal efficiently and effectively with all invoices and bills
- Keep up to date records of all the financial transactions
- Ensure that funds are spent properly
- Issue receipts and record all money received
- Attend committee meetings and present the budget report
- Prepare the end of year accounts to present to the auditors
- In agreement with the committee plan the annual budget
- Monitor the budget throughout the year.
Reserves policy for clubs
Reserves are important to clubs for:
- Contingency planning
- Fulfilling legal and moral commitments
Strategies to develop reserves
Many small clubs would like reserves but find it difficult to build them.There are two ways to develop reserves.
- Ask for more - you can try asking funders and supporters for a little more to establish reserves if you can justify the reason - this is why a transparent reserves policy is so important.
- Plan for a surplus - plan over a period of years to make a small surplus and state clearly why.
The importance of a reserves policy
Even small clubs should have a reserves policy. It demonstrates:
- Transparency and accountability to supporters
- Good financial management
- Justification of the amount of reserves
Reserves policy - What to consider?
An important factor in developing a reserves policy is to understand your clubs aspiration. Understanding where your club wants to go and how much risk is associated with your income is what will determine the size of your reserves. Agreeing a figure for your policy should answer:
- The reasons why the club needs reserves? - Are you starting a new team? Do you have long term commitments?
- How will you monitoring and reviewing the reserves policy to ensure it is current?
- What level of reserves does your committee feel the club needs?
- What steps will the club make to establish a reserve and maintain a reserve at the agreed level
Reserve Policy - Considerations
There is no absolute level of reserves that a club must have. To determine the right amount of reserves, committee members need to look at their current and future incoming and outgoing resources and ask:
- How secure is our main source of income?
- How would we cope if our income did change?
- How would our members be affected? What risks are involved if our income streams changed?
Once the club has an idea about what level of reserves it should have it should compare this to what they actually have. Clubs should have a clear understanding of the purpose of their reserves. To much reserves may not be meeting the clubs goals.