Ever wondered how Changeworks keeps all of these projects running smoothly at any given time? The big secret is having a great team behind the scenes, covering everything from HR, to IT, to finance.
One of the key people in making sure these behind the scenes functions support our work is Finance and Resources Director Graeme Farmer. In an effort to give you a better insight into how he oversees the management of our finances, we spoke to Graeme about his journey, how Changeworks stays in top financial shape, and what role charities will play in addressing the climate emergency.
What made you work in the charity sector?
I chanced upon the sector randomly when temping, and never looked back. In the charity sector, finance is treated as a valuable resource to be used as effectively as possible to achieve charitable objectives, rather than as an end in itself, to be maximised and distributed to owners. At the same time it’s also about embracing the risk, flexibility and entrepreneurial spirit of the commercial sector. The best of both worlds, in my opinion.
What is the proudest moment of your career so far?
Helping to set up Warmworks. It’s a joint venture between Changeworks, Energy Savings Trust and Everwarm formed to deliver the Scottish Government’s flagship national fuel poverty alleviation scheme, Warmer Homes Scotland. This very successful joint venture showcases the critical role that can, and should, be played by charities in efficiently and effectively delivering large government programmes.
What’s the most rewarding part?
The most rewarding aspect is working with colleagues to find innovative solutions to the myriad of issues that continually arise due to working in a very dynamic and entrepreneurial charity. I never quite know what issue is going to come up next, but I do know that we inevitably find a solution. There is no ‘business as usual’ at Changeworks.
How has Changeworks managed diversification of funding to ensure we are sustainable into the future?
Breaking into new funding streams or areas of work isn’t easy, and hard to do from a standing start. We find that working collaboratively with partners is an excellent way of delivering high-quality services in new areas – though of course it does introduce unique management, admin and governance challenges.
What sort of financial challenge does the diverse nature of our work across different projects present?
It means we can’t have a “one size fits all” finance system, as different types of project can require very different financial information and support. The needs of a contracted service are very different form those of a grant-funded project – particularly in relation to claiming income and reporting externally. This makes it difficult for our finance staff and systems to provide useful and timely information to managers – we can’t just press a button!
With a lot of our funding project specific and ring-fenced, how do we fund our innovation?
Innovation is one of our key values and we aim to be innovative in all our work, regardless of how it is funded. Working closely with our partners and funders, we aim to be continually improving our services as we deliver. However, some innovation does require time, space and asset investment outwith the day-to-day of our services. We price and budget on a “full cost recovery” principle which ensures that all contracts and grants contribute to organisation-wide costs that are essential for the charity to remain sustainable. We also have some limited designated reserves for this purpose as part of our three-year strategic plan.
How do we ensure that we are a ‘safe pair of hands’ for all our funders and partners?
We have a professional finance team, excellent financial systems and controls, and regular financial reporting to managers to assist with decision making. Our annual budget is approved every year by the board. Critically, we are very careful to ensure any contracts and grants we sign are financially viable – it is very hard to manage the finances of a bad contract. Our annual accounts are verified every year by an independent external audit, which also confirms us as a going concern. Our annual accounts are signed by the Board and are publicly available for scrutiny by our funders as part of their due diligence process.
What are the biggest challenges you see for Changeworks in the near future?
The need for our work is not likely to disappear any time soon. The biggest challenge we face financially is ensuring we continually innovate to stay at the leading edge of our work. We have to be able to show that we continue to offer practical, efficient and effective solutions.
Are you optimistic for the future of the charity sector?
Yes – the UK Parliament, Scottish First Minister and Welsh Assembly have all declared a climate emergency and tackling an emergency will require a huge amount of innovative, fast and effective work by all sectors of society working in partnership. The charity sector will have a critical role in tackling the climate crisis. It's trusted by the public, focussed on delivery, and experienced at working quickly and collaboratively.
If you have a low carbon project or goal and you think Changeworks could work with you to achieve it, get in touch with us to find out more about how we can help.