Financial safeguarding isn’t just for those in charge of the purse strings. For smaller charities, large training programmes may not be possible. We go over the basics of financial safeguarding and how to prevent fraud.
What is financial safeguarding?
Safeguarding practices are used by charities to prevent abuse. Policies and training help charity staff spot and handle misdeeds. Procedures ensure that staff are able to deal with vulnerable people, both as staff members and beneficiaries.
To summarise, the NCVO says of safeguarding procedures: “[They] actively prevents harm, harassment, bullying, abuse and neglect. It’s also about being ready to respond safely and well if there is a problem.” Having this framework in place allows charities to react with care to the vulnerable, young, and those less able.
For staff, safeguarding also includes whistleblowing serious failures by senior management.
From a financial perspective, safeguarding means protecting somebody’s money, situation, and preventing fraud. The Social Care Institute for Excellent give a useful definition: “[Safeguarding prevents] financial or material abuse, including theft, fraud, exploitation, pressure in connection with wills, property or inheritance or financial transactions, or the misuse or misappropriation of property, possessions or benefits.”
Financial safeguarding in practice
Smaller charities on a budget don’t need to skimp on financial safeguarding. Following the right steps, charities can avoid and head off potentially dangerous situations.
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Have policies in place
To make sure that your charity operations have financial safeguards, codify the procedures. The UK Government offers guidance on what to include. The four integral parts of policies, at a minimum, should:
- Protect people from financial harm
- Make sure people can raise concerns
- Have a process for handling incidents
- Have a procedure for involving authorities
Small charities can look to others for sample policies. Talking Money, a charity helping those out of debt, has an exemplary public safeguarding policy. They have included a purpose statement, definitions, and procedures for financial abuse. They also outline what to do in case incidents need to be reported.
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Know what financial abuse looks like
Taking advantage of vulnerable people can take many forms. The NHS describes what financial abuse is in general. They say perpetrators typically steal money or victimise people by inappropriately spending what is not theirs.
Charities operating legacy programmes should take special note. As they often deal with finances and legal wills, it’s important to safeguard against specific abuses.
Kent County Council’s financial safeguarding digital toolkit includes detailed examples of abuses to watch out for:
- Staff and volunteers borrowing money from beneficiaries
- Altering ownership of property without consent
- Influencing wills, inheritance, and other asset considerations
- Pressurising victims to accept more/less services than needed
Many of the above examples of financial abuse could happen during fundraising, volunteering sessions, or any other events in connection with normal charity operations.
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Train your staff
Training and educating staff around financial safeguarding is one of the best ways to stay alert. The Ann Craft Trust works with organisations to improve safeguarding measures. In terms of awareness, they offer both online and physical courses for adults, young people, and those engaged in sports. The trust also creates bespoke programmes to cover niche topics.
In addition to the Ann Craft Trust, the NCVO and the NSPCC offer safeguarding courses. The NCVO’s courses tend to the basics, including policy writing, roles and responsibilities, concern and risk management. The NSPCC’s classes target charity trustees. The online work focuses on the legal frameworks, responsibilities, and how leaders can create a secure environment.
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Examine the role of charity trustees
Trustees are role models for the organisation and lead the way when doing good. As part of the leadership team trustees are mandated by the UK Government to “take reasonable steps to protect from harm people who come into contact with their charity”.
From the government perspective, trustees have a personal duty to ensure the safety of everyone who comes into contact with the charity. This applies even if trustees delegate responsibilities to other staff members.
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Report to the regulator
As part of a functioning financial safeguarding policy, the escalation procedure should be noted in detail. According to the NCVO, a feature part of this is how to make reports to the regulator.
Financial, and any other safeguarding concerns, should be reported to the correct regulator. These include the Charity Commission, The Quality Care Commission, Office for Standards in Education, Children’s Services and Skills (OFSTED), National Crime Agency, and any other relevant professional bodies.
In serious cases, the police may need to be notified.
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