May 2025
Happy May Folks
This is an exciting month for us. We are launching the Embrace Finance Academy - Small Charity Finance Foundations Programme in conjunction with the wonderful Directory of Social Change. If you want top tips, step by step guides and general inspo on how to manage small charity finance, come join us!
Also, in this newsletter we bring you:
- some thoughts on the power of trading and why maybe it's time to embrace social enterprise
- free videos and slidedecks from the 3rd annual Small Charity Friendly Conference
- and last but not least some light hearted thoughts on year-end from Kemi, our Associate, who is keeping it real.
Wishing you a lovely BH filled May. Onwards and upwards folks.
Warmly
The Embrace Finance Team
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Embrace Finance Academy - Small Charity Finance Foundations
Embrace Finance Academy x Directory of Social Change
Practical Finance Training for Small Charities
We’re are super happy to be launching the
Embrace Finance Academy
and doubly thrilled to be partnering with
Directory of Social Change who are hosting the Foundations Programme Spring 2025 term.
These 9 bitesize sessions will walk us through most of the the key jobs we have when putting together a simple and effective finance function and they have been designed specifically for small charities with small charities.
👉
Reserve your spot now
Why this matters:
We are often told that getting on top of and staying on top of the finances can feel frustratring. We get it. It is heavily regulated, It can be boring. It can be anxerty provoking. But with the right knowledge, tools, and support, it can actually be empowering and sleep supporting folks.
We have designed a 9 step programme to walk you through the key steps in building a simple and effective finance function. We cut through the the jargon, strip back the noise and work hard to give you the confidence to take control of your finances – no spreadsheets left behind.
What’s in the course?
Over
9 bitesize sessions, we cover the essentials:
📊 Bookkeeping
📅 Budgeting
💰 Reserves
📉 Cashflow Forecasting
📚 Trustee Duties
…and much more.
Each 75-minute online session includes 60 minutes of clear, practical teaching and 15 minutes of Q&A.
Designed for and with small charities over many years now we are inviting you to join us for the whole programme or for stand alone sessions. These sessions are perfect for accidental finance heroes in smaller charities with an income up to £500k pa. But they also work well for any small charity folk wanting a refresher.
What you’ll get:
✔️ Practical templates and real-world examples
✔️ Actionable takeaways you can use straight away
✔️ Friendly, expert-led guidance tailored to your context
Explore the full course and book your place:
🧭
The Embrace Finance Academy – Foundations Programme
Small Charity Friendly Collective Conference 2025
Catch Up on the Small Charity Friendly Collective 2025 – Sign up for recordings now!
If you missed the April 2025 Small Charity Friendly Collective third annual conference – don’t worry, you can now access all the session recordings and slides online. With over 500 small charity leaders signed up, it was a powerful day of connecting, reflecting, and recharging for the challenges ahead.
The day opened with an inspiring keynote from Fozia Irfan (BBC Children in Need) and moved through a packed programme of practical sessions on finance and fundraising, governance, trustee recruitment, strategic planning, and upcoming employment law changes.
The event closed with a compelling message from Mohammed Afridi (Civic Power Fund) on how funders and small charities can rise to meet the challenges of our time and a heartfelt reminder on the power of the collective.
For our session this year we teamed up with our good friends at Lime Green Consulting to bring some thoughts on how finance and fundraising can work together:
- We looked at how to build a realistic income forecast grounded in what’s actually achievable, and how to use that forecast to shape strategy, guide decision-making, and avoid mid-year funding shocks.
- We covered the need to factor in return on investment for income streams and aligning finance with service delivery (including a modest surplus!).
- We followed with a principles-based approach to building financial resilience rooted in purpose.
- From avoiding “jenga tower” budgets to embracing full cost recovery, we also noted the need to reflect our values through our finances.
- With strategies like modelling best and worst case scenarios, knowing when to walk away, and being “more starling” (flexible, adaptive, collective), we invited small charities to adopt a mindset shift—toward resilience, realism, and long-term impact.
Whether you're looking to strengthen your financial resilience, update your governance, or simply feel a little more connected, you'll find insights and tools to support you.
🎥
Catch up here
How Small Charities Can Benefit from Trading: A Mindset Shift for Sustainability
In an era of tightening public funding and growing demand for services, small charities are under increasing pressure when it comes to raising much needed £££. One often-overlooked but powerful option is charity trading—running a social enterprise activity to generate income for charitable purposes.
Trading offers small charities several clear benefits:
- Financial resilience: Unlike grants or donations, trading income can be more predictable and within your control. Plus it is unrestricted!
- Mission alignment: Many trading activities, such as running a community café or selling educational materials, directly further a charity’s purpose
- Community engagement: Offering goods or services builds stronger relationships with the people you serve.
Yet, many small charities hesitate, understandably, when it comes to being more enterprising. The regs often get in the way.
Understanding the Rules: CC35 and the Legal Framework
The Charity Commission’s guidance,
CC35: Trustees, Trading and Tax, provides a clear outline of what’s allowed:
- Primary purpose trading (activities that directly further your charity's aims) is generally safe and permitted.
- Non-primary purpose trading (to raise funds) is allowed, but must be managed carefully—especially when it exceeds the small trading threshold (currently £80,000 for most small charities).
- For larger or riskier trading, a separate trading subsidiary may be required.
Understanding CC35 isn't just about compliance—it’s about unlocking potential. With the right governance and planning, trading can become a robust income stream which is entirely mission focused.
A Mindset Shift: From Grant Dependence to Entrepreneurial Thinking
Many charities still view trading with suspicion, worrying it conflicts with their ethos. But we are firmly of the view that
trading does not have to be mission drift when done with purpose.
Having worked with many small charities on the Lloyds Bank Foundation's Trading and Sustainability programme over the past 6 years, our advice is:
1. Stay true to mission
Try and find the sweet spot in what you do already. Think about your expertise. Can this benefit others if you package it as a product to sell? A training offering? A toolkit perhaps? Who might really benefit from this expertise and have the pockets to pay for it?
2. Build quickly, fail quickly Once you have your product in mind, build it, test it and work out what works and what doesn't. This will help you find the right price point, test the market and get some feedback. If it's not working, work out why and change it up.
3. Pilot first, then scale Once you have something that works, then put your efforts into offering it commercially and plan carefully to build into a steady income stream. Make sure you have a good margin and that it is actually making a profit.
4. Think enterprise, stay charity. Often the biggest challenge is giving ourselves permission to think and act like an enterprise. Remember, everything we do is in service to beneficiaries. And the more financial freedom we have the longer we can serve. Just make sure you follow the Charity Commission guidance.
Final Thought
Trading isn’t a silver bullet, but it can be a valuable tool. With a solid understanding of the regulations and a willingness to rethink traditional models, small charities can trade ethically, legally, and effectively. Maybe it's time to see trading not as a threat—but as a lifeline.
Still not sure? Why not read
these success stories from the LBFEW trading and sustainability programme?
Want to know more about the potential of enterpreneurialism? Why not check out
The Enterprise Accelerators Festival 2025
curated by the brilliant Penny Wilson.
Have Your Say: Two Key Charity Consultations Now Open
The Charity Commission is currently seeking views on two important consultations that could impact how charities operate.
The Consultation on Thresholds explores potential changes to income and audit thresholds—vital for small charities navigating compliance. If you think the audit threshold should be raised have your say now! Read the Charity Commission guidance here.
Additionally, the Consultation on the Charities SORP invites feedback on proposed updates to the Statement of Recommended Practice, which underpins charity accounting standards. Visit the Charities SORP page here.
These are valuable opportunities for charities to influence future regulations—don’t miss your chance to respond.
Finally, if you too are battling a financial year-end, we leave you with thoughts from Kemi, our Associate who is very much keeping it real😊
This is a busy time of year for most accountants. We will not fully benefit from the downtime that Easter and the pending May bank holidays should bring.
People often assume that once the 31 March (or whenever your organisation’s year end is) passes then it’s all over. You then get the question “is it all finished now “ with increasing surprise and disbelief as the weeks pass and the answer is still no. Speaking to my peers in accountancy here are our top ten reasons:
1) Various departments have kindly decided to dump a batch of invoice requests and contracts into our inboxes in March, many of which they’ve stockpiled for months but are now urgent and need to be sorted by year end. We’re still trying to sort through and fix these, Olivia Pope Scandal style.
2) These unexpected gifts now mean any forecast information we’ve previously given to senior management is now a work of fiction and we need to explain why.
3) We’ve also been given a backlog of expense claims, many of which are unintelligible to the human eye, devoid of dates, descriptions and receipts.
4) We haven’t submitted our own expense claims (doctors make the worst patients as the saying goes).
5) We can’t find our receipts for our own expense claims (see above).
6) We circulate the draft annual accounts. The cc list grows exponentially by the day and the track changes have become mini discussions between colleagues over what to include and change. We’re trying to transform this into something suitable for public consumption (invoking our inner Olivia Pope again).
7) All those things we vowed to do after the last year end to make life easier this time round, yep we haven’t done them.
8) We can’t find where we put the said list of things we’d do to make life easier.
9) The audit will miss items that demonstrate our meticulous planning and will randomly find the items that are “complicated. “
10) Despite staring at these accounts for weeks on end, the final version will have an obvious error we’ll only spot when they’re about to go to print.
Happy year end to my accountants, I’m with you in spirit.
That's all we have for now folks. Let’s build stronger, more financially resilient charities—together.
If there is anything you want to share with us we would love to hear from you by email to
hello@embracefinance.org.uk.
With solidarity,
The Embrace Finance Team
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