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Starting_ Running _ Developing an Organisation

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Starting_ Running _ Developing an Organisation Powered By Docstoc
					      STARTING, RUNNING AND DEVELOPING AN
      ORGANISATION
      Helping you to help yourself

      Ealing Council’s Grants Unit and Ealing Community & Voluntary Service
      (ECVS) have compiled the following information on procedures, best practice
      and model documents for community and voluntary groups. It comprises four
      sections: (A) starting an organisation; (B) running an organisation; (C)
      developing an organisation and (D) publications that focus on general aspects
      of running organisations and a link to a list of useful general resources that
      can be found via the web. Community and voluntary groups are “not-for-profit”
      organisations run by management committees who are not paid. If your
      organisation is a business, you can access information and advice on starting,
      running and funding a business at: www.businesslink.org, www.startups.co.uk
      www.is4profit.com      or     for    local     information     and     advice:
      www.gatewayenterprise.co.uk.

      Each section describes the essentials of what needs to be done and ends
      with further information that can be sought from useful websites. The first
      three sections have concentrated on the range of policies and procedures an
      organisation should have and funders expect applicants to have established.
      Further explanation of those words or phrases that have been highlighted in
      bold and italics can be found in a useful “A-Z of Funding” produced by the
      Home Office Active Community Unit (it is advisable that you print off a copy of
      this before you read further): www.governmentfunding.org.uk and follow the
      link to “Help & Advice”.

      For those organisations that do not have a computer, you can access the
      internet free of charge at Ealing Council Libraries. We have tried to identify
      those websites where practical information is available free of charge.
      However, for some information and publications a charge is made and where
      this is the case we have cited relevant publications that are at low cost.

      Ealing Council and ECVS have tried to ensure that the web links referred to
      are relevant. However, neither organisation can accept any liability for their
      accuracy or content.

(A)   Starting an Organisation: Most organisations start by a group of individuals
      coming together to pursue a common aim or interest. For a collection of
      individuals to form an organisation, they need to establish a governing
      document, which for unincorporated organisations (see below) is normally
      referred to as the constitution. A constitution is a legal document, which sets
      out the purpose of and rules for governing an organisation and is required for
      the following reasons:

              To ensure that an organisation’s aims are clear and agreed by its
               members;



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        To provide mechanisms for making decisions and resolving
         disputes;
        To gain credibility with bank managers and funders;
        To outline responsibility for different aspects of running the
         organisation and to ensure accountability;
        To enable the organisation to register as a charity, an industrial
         and provident society or a company limited by guarantee (see
         below).

Once a draft constitution has been agreed, it needs to be formally adopted at
a meeting. From that point, in accordance with the constitution, a
management committee is elected and officers (Chairperson, Secretary,
Treasurer etc) are elected or appointed and new members can join. The
organisation should also open a bank account in the name of the
organisation.

The above describes a structure which is suitable for a small organisation
without premises or paid staff. If its aims meet charitable objects, it has an
obligation to register as a charity and thereby access certain benefits. At this
stage, whether registered as a charity or not, the organisation is legally
defined as being an unincorporated organisation. An unincorporated
association has no separate legal existence and therefore cannot acquire
property, enter contracts, or commence legal proceedings in its own name.
Moreover, individual members of the management committee (also known as
trustees) can be held personally responsible for the organisation’s obligations
and debts.

Only incorporation as a company or as an industrial and provident society
will give the organisation a separate legal identity and protect, in most
circumstances, members of the management committee from personal
liability. For these reasons medium to large organisations apply to become
incorporated. It is possible to be both incorporated and be registered as a
charity.

Incorporated organisations are not necessarily structured along democratic
lines and if you wish to ensure that members have the right to elect the
management committee and to vote on amendments to the constitution etc
(for incorporated organisations this is referred to as memoranda and articles
of association) you need to ensure that this is stated in the constitution. You
should also seek legal advice.

www.volresource.org.uk/briefs/starting.htm. has a useful checklist in starting
an organisation. For a detailed step-by-step guide to establishing an
organisation see the “Getting Started” pack produced by Islington Voluntary
Action Council at www.ivac.org.uk/Downloads.htm. For the role and duties of
the management committee see Voluntary Action Sheffield’s information
sheet “Management Committees” and other guidance on setting up at
www.vas.org.uk/info4.html.




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       The        Charity      Commission’s        website       –      www.charity-
      commission.gov.uk/publications/ccpubs2.asp contains a wealth of advice both
      on starting an organisation and registering as a charity. See in particular their
      publication CC22 Choosing and Preparing a Governing Document which you
      can download together with a model constitution that you can adapt for your
      purposes. For becoming incorporated as a company see – www.companies-
      house.gov.uk. Also see the briefing note “Sustainable Funding: Trading and
      Social Enterprise” elsewhere on this site and www.westlondon-pulse.org.uk if
      you are interested in developing a social enterprise, the introduction of
      community interest companies and other legal frameworks or issues
      relating to the social economy.

(B)   Running an Organisation: In order to run activities or provide services, all
      organisations require resources - eg people, finance, equipment, premises
      etc. A key tool in organising this is the budget. Each year an organisation
      needs to draw up a budget – an estimate of how much it expects to pay out in
      expenditure and receive in income during the financial year (usually 1st April
      – 31st March). The Management Committee should approve the budget and
      use the budget to monitor income and expenditure during the year. As well
      as the budget the organisation needs to establish a system for recording
      receipts and payments and as a minimum you will require a cash analysis
      book and a petty cash analysis book.

      For all aspects on managing finance, consult Community Accountancy Self-
      Help’s (CASH) website:
      www.cash-online.org.uk/data/?sec=cashfacts&doc=&page= This site contains
      a range of “factsheets” which you can download, including a sample budget.
      See also Sample Document: Financial Procedures at:
      www.volresource.org.uk/samples/fin_proc.htm

      At the appropriate time the organisation will need to produce annual
      accounts and submit these for adoption to its Annual General Meeting.
      Accounts can be prepared on either a receipts and payments basis or on an
      income and expenditure (or accruals) basis. Receipts and payments state
      moneys received and paid out but do not include expenditure committed but
      not paid, payments made in advance, income due but not received or income
      received in advance. They therefore do not show the true financial position.
      An income and expenditure account includes the above and gives a more
      accurate financial position. The income and expenditure account is always
      accompanied by a balance sheet, which shows assets, liabilities and net
      worth (assets minus liabilities) at the end of the last day of the organisation’s
      financial year. The form of annual accounts that is required and whether they
      need to be independently examined or audited by an accountant qualified
      to audit, will depend on the requirements of the organisation’s governing
      document, whether the organisation is a charity or a company, the grant
      conditions of its funders and the level of its annual income. The organisation
      must produce its accounts in accordance with the highest requirements that
      are applicable.




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For further information see CASH’s website and the Charity Commission’s
website above. Regarding the latter the following documents can be
downloaded: CC61 Charity Accounts: The Framework; CC62 Charities SORP
2000: what has changed?; CC63 Independent Examination of Charity
Accounts; CC64 Receipts and Payments Accounts Pack 2001; CC65
Accruals Accounts Pack.


The CASH Community Accountant (based at Ealing CVS) can advise
local organisations on how to write budgets, prepare cash flows, set up
bookkeeping systems, deal with PAYE and National Insurance and
managing your group's finances. This service is free. For more details
contact Paul Boielle on 020 8579 6273 or email paul@ealingcvs.org.uk.


Organisations require some form of insurance. For all organisations it is
essential to have public liability insurance, as this will cover committee
members, volunteers and staff for injury, loss or damage caused to any
person as a result of an organisation’s negligence. Other forms of insurance
may be necessary: if an employer, the organisation must have Employers
Liability Insurance; if operating vehicles, Road Traffic Insurance; if leasing or
owning property, Buildings and possibly Contents Insurance; if providing
services and advice to the public, Professional Indemnity Insurance. Some
organisations also wish to provide Trustee Indemnity Insurance.

For further information you can download from the Charity Commission’s
website (see above) their briefing CC49 Charities and Insurance. See also
their Operational Guidance on Trustee Indemnity Insurance. Consult also
www.volresource.org.uk/services/serv_ins.htm     and     “Insuring   your
Organisation” at www.vas.org.uk/info4.html.

Finally, most funders now require organisations to have a written equal
opportunities policy and evidence that this has been implemented. By this
they mean that the organisation has fair employment and management
practices which don’t unfairly discriminate against people on the grounds of
ethnicity, gender, disability, sexual orientation and age and that the
organisation actively ensures that the services and activities it provides don’t
discriminate either. An equal opportunities policy should have four
components: a policy statement committing the organisation to combat
discrimination; the organisation’s objectives concerning equal opportunities;
procedures and a programme to implement the policy; and monitoring and
review processes.

For further information see the Equal Opportunities Commission’s website:
www.eoc.org.uk/EOCeng/dynpages/PracticingEquality.asp which contains a
model equal opportunities policy and guidance on how to implement monitor
and evaluate it. See also the Commission for Racial Equality: www.cre.gov.uk
and the Disability Rights Commission: www.drc-gb.org




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(C)   Developing an Organisation: The above has described the basic
      procedures and policies an organisation needs to establish. However,
      organisations spend most time on promoting, running and developing
      activities and services. Whilst all organisations are different in one way or
      another, there are some common themes and techniques that are useful in
      planning, organising, monitoring and evaluating activities and services.

      Whether an organisation runs a single activity or a number of activities or
      projects or events, it is useful to write a work programme. It is helpful to do
      this under specific headings, the most common are as follows:

          Objectives: An objective is a statement of what you want to achieve
           over a period of time based on meeting the organisation’s overall aim;
          Key Tasks: Each objective should have a number of key tasks that
           need to be undertaken in order to meet that objective. A key task is an
           action or activity that must be carried out to achieve an objective. Key
           tasks must be non-routine and crucial without which the objective could
           not be met.
          Targets: There should also be a number of targets that you hope to
           reach for each task. A target is the level of achievement of a task or a
           date for its completion.

      For a simple introduction to writing a work programme – see the briefing at
      www.ealing.gov.uk/volgrants where you will also find guidance on “Planning,
      Running, Monitoring and Evaluating Activities”.
      See also Voluntary Action Sheffield’s information sheet on “Action Planning”
      at www.vas.org.uk/info4.html. For a useful checklist for organising an event
      see: www.volresource.org.uk/briefs/events.htm

      In due course the organisation should monitor and evaluate its activities.
      Monitoring is about the regular, systematic gathering of information about an
      activity. It is about counting and measuring, without making any judgement
      about the results. In contrast evaluation is about interpreting the results.

      The       Charities    Evaluation      Service’s     website:  www.ces-
      vol.org.uk/html/bookshop.htm has a number of booklets on monitoring and
      evaluation at a cost of £3.50 - £5.50 each. You can also download “First
      Steps in Monitoring and Evaluation” and other downloads at:
       www.ces-vol.org.uk/html/about_monitoring.htm. See also “Monitoring and
      Evaluation” at www.vas.org.uk/info4.html and “Developing Performance
      Indicators” elsewhere on this site.

      For new and small organisations that do not have premises or employ staff,
      the policies and procedures outlined above should be adequate to address
      most development issues. However, “from little acorns…” organisations grow,
      expand their activities, obtain premises and employ staff. With regard to
      acquiring and running premises and employing staff, see the useful
      information sheets produced by Voluntary Action Sheffield: “Acquiring and
      Managing Premises”, “Employing a Worker” and “Disciplinary and Grievance
      Procedures” at www.vas.org.uk/info4.html.


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At some point in the growth of an organisation, the organisation and its
funders will require a more sophisticated approach to the strategic planning of
services.

A Quality Assurance System is a systematic approach to identifying and
responding to the needs of your users by providing an appropriate service
consistently and to agreed standards. You should also be able to provide
evidence that you are doing so. There are a variety of quality assurance
systems on the market. For an overview see the briefing at
www.ealing.gov.uk/volgrants or consult :
www.volresource.org.uk/briefs/planning.htm#mon         For    organisations
employing up to 20 staff the most commonly used quality assurance system is
PQASSO (Practical Quality Assurance System for Small Organisations). The
2nd edition of PQASSO can be obtained at a cost of £73.15 from the Charity
Evaluation Service – see their website: www.ces-vol.org.uk

A further development that may be required is to establish a business plan.
A business plan is different from other plans in that it has detailed financial
forecasts for the organisation as a whole. Some of the elements that are likely
to be in any business plan are:

    Where are we now? A description of the values, assets, activities,
     staff, expertise and experience of the organisation. Many groups use
     SWOT and PEST analyses to describe their current situation.
    Where we want to get to? A description of the overall purpose of the
     organisation, and its objectives for the next 3-5 years.
    How do we get there? The strategies (finance/fundraising, staffing, IT,
     marketing) needed to gain the objectives. The resources required –
     staff, skills, training, money. Financial and cashflow projections,
     detailed in the first year, more of an outline in years 2 and 3, etc.

For further information on writing a business plan see the briefing at
www.ealing.gov.uk/volgrants and the various sections on planning and quality
management at www.volresources.org.uk.         See also Voluntary Action
Sheffield’s   information    sheet     on     “Business     Planning”     at
www.vas.org.uk/info4.html. From a business perspective see -
www.businesslink.org or www.gatewayenterprise.co.uk


TIDE training courses are designed to give you the essential skills
needed to get your organisation started and running smoothly. Past and
present include promoting your organisation, budgeting for beginners,
applying for funding, IT skills and many more....
For more information contact Helen Stow or Joyce Timmerman on 020
8579 6273 or email helen@ealingcvs.org.uk or joyce@ealingcvs.org.uk.




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(D)   Other Useful Websites & Publications: See the list of internet sites under
      “Useful Websites” elsewhere on this site that have been identified that provide
      information and good practice by subject matter. Some of these sites have links
      to organisations that work with particular client groups (eg youth, elderly etc) or
      issue based organisations (eg, the environment, transport etc).

      You may also wish to purchase two useful publications, both published by the
      London Voluntary Service Council (LVSC): “Voluntary But Not Amateur: a guide
      to the law for voluntary organisations and community groups” (cost £28) and
      “Just About Managing: effective management for voluntary organisations and
      community groups” (cost £20.95), for further details contact LVSC at
      www.actionlink.org.uk/lvsc/ and follow the link to “publications”.




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