Frustration on both sides? Yes.

Necessary? Absolutely not!

The reality is that trustees are volunteers. They are not accountants. Many are expert campaigners, subject matter specialists, community leaders or business professionals who donate their time because they care deeply about the mission of the charity they serve. But we give them financial information in spreadsheets and reports created for accountants, not trustees.

The result? Boards take decisions without full clarity on financial position or performance; red flags go unnoticed until it’s too late; and opportunities are missed because trustees don’t have the information they need to see them.

This doesn’t have to be the case. Boards of trustees should receive regular financial updates in the form of a trustee dashboard. Dashboard reporting isn’t a new concept. Many businesses, particularly publicly-listed companies, produce excellent dashboards for their boards of directors. But charity boards are different to company boards, so developing an effective trustee dashboard requires a slightly different approach.

In this article, I’ll explore what makes a good trustee dashboard. I’ll also highlight some of the issues I’ve encountered when reviewing trustee reporting practices across the sector.

Trustee reporting: The good, the bad and the ugly

In addition to working with charities as a consultant, I have also examined the trustee reporting practices of dozens of organisations in my current role. Some are small local charities with turnover of under £100,000 per annum. Others are national charities with budgets of tens of millions. What’s striking is that the good and the bad trustees receive when it comes to financial reporting are, more often than not, the same.

At one extreme, trustees receive next to no information between annual accounts. A bank statement and “all’s fine” from the treasurer might be deemed adequate by the finance team. But it isn’t good enough for trustees who have a responsibility to ensure the organisation is using it’s funds and assets reasonably, can demonstrate it is and will remain solvent and do not put the charity’s endowment, funds, assets or reputation at risk. Running the charity shouldn’t come down to trust.

At the other end of the spectrum, some charities believe more information is better. Long agendas packed with full management accounts, schedules upon schedules of expenditure, project-by-project breakdowns, accompanying narrative reports…you get the picture. Hours of reading and number-crunching for trustees who are attempting to digest all this information between their day jobs and volunteer duties.

The questions are;

• Does any of this information help trustees fulfil their legal responsibilities?
• Is the dashboarding happy?
• Are variances against budget, prior year and targets spotted and explained?
• Is everyone clear on where the charity stands financially?

Nope. None of that reporting helps trustees do their jobs.

Dashboarding essentials for charity trustees

So what would help trustees? Trustees need information on the financial health and performance of the charity they are governing. They need it regularly, and they need it in a format they can understand. They don’t need to know the nuts and bolts of every financial transaction. They do need to know if the charity is meeting it’s income targets, staying on budget, and has enough reserves should it experience a sudden drop in income.

Providing trustees with this information in a consistent, easy-to-read format is where dashboarding comes in. A trustee dashboard should contain key financial information about the charity presented in a clear visual format. Ideally it would take the form of one (or at most two) pages that trustees see at every board meeting.

Dashboarding best practice is built on three foundations. These are:

1. Visual clarity
2. Consistent reporting, and
3. Providing context for the numbers

Visual clarity

A picture tells a thousand words. Or in this case, a financial trend graph tells you far quicker than staring at a column of numbers. Charts and graphs are your friends. Line graphs to show income/expenditure trends over the last twelve months. Traffic-light style charts to flag up values sitting outside of policy thresholds. Pie charts to show income/expenditure by category. Get creative!

That’s not to say you should exclude figures completely. We still want to see those numbers for specificity. But use visualisations as the primary method of communication on the dashboard and pick just a few key metrics to include.

Consistent reporting

The dashboard should be presented in the same format, including the same metrics every time. Resist the temptation to tweak the format or add additional graphs as you discover ‘other things that might be useful.’ Consistency is key for two reasons.

Firstly, it allows trustees to understand the format intuitively. They know where to find the information they are interested in, without having to learn a new reporting format each quarter. Secondly, it allows comparison. If this month’s dashboard looks vastly different to last month’s because you’ve changed the layout or metrics included, it’s harder to spot trends or changes.

Provide context

Lastly, never show a figure on it’s own. Every metric on your dashboard should be compared to a meaningful reference point. Budget? Prior year? Target? Policy threshold? It doesn’t matter what you use for context, so long as it’s there. £150,000 in reserves looks impressive. But show that alongside a reserve policy that recommends three to six months of costs, and current monthly operating costs of £40,000 and suddenly we know that reserves are healthy at 3.75 months.

Where figures deviate from expectations (whether that’s budget, prior year performance or a target) explain why. Was income 15% down because a large grant was delayed? Was expenditure lower because a planned investment didn’t go ahead? A few words to explain variation can turn numbers into meaningful information.

Building Blocks: Financial KPIs for Charity Trustee Dashboards

Ok, so every charity is different, and different trustees will want to see different things. But at a basic level, there are some financial metrics that will be relevant to most charities’ trustee dashboards. Here are the ones I build into every dashboard, unless there’s a specific reason not to. They align with my experience across the sector, but also map pretty neatly to the Charity Commission’s guidance on financial controls.

Financial position year-to-date

It’s useful to start with the overview: is the charity currently in surplus or deficit? Your dashboard should clearly display total income and expenditure year-to-date, showing both the absolute variance from budget, and the percentage variance. This should be accompanied by a simple trend line showing the cumulative position over the last twelve months.

Obviously many charities have seasonal income and expenditure patterns – lots of fundraising activity in the spring and autumn, or grant payments received in two particular spending quarters. The trend helps to show these patterns, and whether the current position is normal or needs investigation.

Your cash position

Cash position is obviously critical for any organisation – trustees will want to know not just where you are now, but where you’re heading. A simple line graph showing your projected cash position for the next six to twelve months will show that clearly.

You’ll also want to see reserves – total reserves (or “unrestricted funds”, if your charity uses fund accounting) broken down by restricted/unrestricted (and further, if applicable) and compared to your charity’s reserve policy. If your reserve policy specifies a range (eg “holding reserves equivalent to between three and six months operating costs”), show where in that range you currently sit.

If your charity has restricted funds, you’ll also want a summary showing the current balance of each major restricted fund, and any concerns around restricted income being received ahead of committed expenditure.

Income performance

Trustees will want visibility on income figures – these should be broken down by major category (grants, donations, trading income, investment income etc) showing actual year-to-date figures against budget for each category.

For charities whose income is primarily from fundraising, you may also want to drill-down further – individual giving may have associated metrics around number of active donors, average gift value, donor retention etc. Major donors may have their own pipeline of prospects and proposals you want to track. Event income may be shown against costs to demonstrate net contribution to the charity.

Charity customer relationship management platforms can usually track most, if not all, of these metrics and feed data directly into your dashboard reports. Dashboarding software integrated with your charity finance software will do the same. This means no manual compilation of data, and trustees seeing information that’s up-to-date rather than several weeks out of date.

Expenditure breakdown

Similarly, trustees will want to know that expenditure is being controlled and is appropriately spent on charitable activities. Total expenditure year-to-date should be clearly shown against budget, broken down by the three major headings: charitable expenditure, fundraising costs and governance/support costs.

Trustees will also want to see the ratio of charitable expenditure to total expenditure – this is a useful governance metric that can be monitored over time. (There’s not necessarily a “right” level of charitable expenditure as a proportion of total spend. This will vary between different types of charity, and may vary as the charity develops – but trustees should know what percentage of spend is going directly on advancing the charity’s mission versus supporting expenditure.)

If the charity runs multiple programmes or service lines, a high-level breakdown of expenditure and associated outcomes by major programme/activity can help trustees see whether spending is aligned with priorities.

Restricted funds summary

Charities that hold restricted funds should also have these visible on the dashboard – trustees have a duty to ensure that restricted funds are appropriately utilised. A simple table that shows the opening balance, income, expenditure and closing balance for each major restricted fund, with blank columns for trustee comments should highlight any concerns (eg funds due to run away soon, restricted income received with no corresponding expenditure planned).

Forward indicators

Whilst historical figures show trustees where the charity has been, it can also be useful to show where it’s heading. Does your dashboard include forecast year end position based on current performance? Are there any major known income or expenditure items anticipated in the next quarter? Do you know of any known risks or opportunities coming down the pipeline?

Grant-funded and major gift charities may benefit from pipeline reporting. Showing the total value of grants/pledges submitted but awaiting decision, or prospect/donor pipeline with major gifts segmented by “stage” of the fundraising process helps trustees understand expected future income, and the uncertainty around that income.

Dashboard Design: some tips & tools

Designing a dashboard is part art, part science. Here are some of the questions I go through with my charity clients when working up a dashboard.

Ask the right questions

First step is to understand what trustees actually need to know. Every charity is different – but they’re also Mission Driven, which means their dashboard should probably reflect that too. Is growing individual giving a key part of the charity’s strategy for the year? Donor acquisition and retention metrics should probably take pride of place on the dashboard. Managing a planned deficit to invest in the charity’s future capacity? Show progress against that plan, and how that affects reserves.

Start with the questions trustees need answers to at each meeting. What are the three to five biggest financial questions that trustees need answered every month/quarter? Design your dashboard so those questions can be answered at a glance.

Choose your chart types wisely

Just as not every question should be answered on your dashboard, not every data set needs its own unique chart type. Line graphs are great for showing trends over time. Pie charts (or stacked bar charts) are useful for showing proportions. Grouped bar charts are helpful for comparing multiple categories. Where you have targets or thresholds that you want to monitor, consider using gauges or traffic-light colours to show status against that threshold.

Pick one or two chart styles that work for you and use them consistently. A dashboard that uses every chart type under the sun will look cluttered and be harder to read.

Set your colours

Ok, so we touched on traffic-light colours already. But giving too much thought to can really improve your dashboard. Green / Amber / Red thresholds should be clearly defined, with input from trustees – what constitutes green (everything is awesome), amber (we need to keep an eye on this) and red (fire alarm).

For example, you may decide that budget variances up to 5% are green, 5-10% are amber, and more than 10% will show red. Reserve levels might be green when within policy, amber when below policy and red when significantly above or below.

Document these decisions and revisit them once a year – do they still work for your charity?

Automate, automate, automate

If you’re building a dashboard from scratch in Excel every month, you’re doing it wrong. Most charity finance software packages now include dashboard and reporting functionality that means you can design templates that update automatically with current data when you run them.

If you’re using multiple systems for finance, fundraising, programme management etc you might need something in the middle. Lots of charities use spreadsheet-based dashboards that pull data from multiple systems, or Business Intelligence platforms like Power BI or Tableau that connect to your various databases.

The up-front time invested in integrating systems will save huge amounts of staff time going forwards. Not to mention improve accuracy, and mean reporting is more timely. When creating a dashboard becomes a couple of hours of pulling a report and adding commentary, rather than several days of manual compilation, everyone wins – trustees get more timely information, and your staff have more time to do analysis rather than just pulling numbers together.

Provide context

Lastly, don’t just give trustees numbers. Charts and figures are useful, but on their own they rarely tell the whole story. Every dashboard should include trustee commentary – a couple of sentences at most – highlighting where there are concerns or queries around variances, or providing context around the numbers.

Sometimes one line is enough. “Major donor pledge of £50k received in October” tells the trustee not to worry about that huge income surplus. “Recruitment delayed on Programme Manager role” explains why expenditure is behind budget.

Test and learn

Finally, don’t be afraid to try something and iterate. Show your trustees the dashboard you build, get feedback, and refine it. Are there metrics they don’t understand? Things they want to see that aren’t included? Charts that don’t seem to be delivering the information quickly?

Agree to review the format every quarter for the first year. Then once a year. Your charity will change over time, and your dashboard should too.

How to Create a Dashboard Financial Report: Phase Implementation

Changing from presenting financial reports as they’ve historically been presented to a dashboard-style format will involve some change management. Here’s the phased implementation process that I recommend to clients:

Phase One: Design and Agree (Month 1-2)

Start by drafting an initial version of the dashboard with input from the treasurer and finance team. You’ll want to include the basic KPIs outlined above but tailored to your charity context and strategic priorities.

Present your proposed dashboard design to the full board. Discuss why dashboards are useful, explain your thinking behind each of the included metrics and encourage feedback. Are these the right KPIs? Does the visual design make sense? What questions are left unanswered by this dashboard?

During this conversation you’ll also want to develop consensus around the dashboard format itself and, importantly, agree the thresholds and benchmarks that will put the numbers in context.

Phase Two: Dashboard with Current Reporting (Month 3-5)

For three to five board meetings present both sets of reports – the standard financials and the dashboard. Having both options will reassure trustees as they acclimatise to the dashboard format. You’ll have the security of the traditional reporting as well as beginning to train everyone to think about and discuss financial information in terms of the dashboard visuals.

This phase will also allow you to refine the dashboard based on practical experience of presenting and discussing it at board meetings. Are certain metrics not as useful as you thought? Any visuals that don’t appear to be adding clarity? Any gaps in information revealed through discussion?

Phase Three: Dashboard Only Reporting (Month 6 onwards)

After a few months the trustees should feel comfortable discussing the charity’s finances using the dashboard and you can make any final refinements based on experience of running in parallel with traditional reporting. You can now switch to dashboard-primary reporting – the dashboard becomes your standard board meeting financial report and you keep detailed management accounts as supporting documentation should any trustees wish to dig deeper into the detail.

This isn’t to say that you discard detailed financial information – far from it. It means recognising that different audiences within your organisation require different levels of financial information. Trustees need the high-level strategic view provided by the dashboard. The finance committee (if your charity has one) may require more detailed management accounts. The finance team needs access to detailed transactional records.

Dashboard design: ongoing review

As a final step, agree an annual review process for the dashboard. As part of your yearly budgeting or strategic planning cycle revisit your dashboard design. Do the KPIs you’re tracking still line up with current strategic priorities? Are any thresholds or benchmarks due for adjustment? Has the charity context changed in ways that mean you need to track different metrics?

Annual reviews will ensure your dashboard stays relevant and useful rather than becoming a stale report that your trustees recite by rote.

Dashboard reporting and Charity Commission guidance

Dashboard-style reporting can help your charity comply with Charity Commission guidance on trustee duties and good governance. In CC3 The Essential Trustee, the Commission makes clear that trustees have five key duties:

• Carrying on the trust’s purposes for the public benefit
• Complying with the trust’s governing document and the law
• Acting in the charity’s best interests
• Managing the charity’s resources responsibly
• Acting with reasonable care and skill
• Ensuring the charity is accountable.

I’ve mapped each of these duties to elements of the dashboard. This isn’t an exhaustive mapping but demonstrates how the dashboard supports trustees to comply with their duties.

Carrying on the trust’s purposes for public benefit

This duty requires trustees to understand if the charity’s resources are being used effectively for its charitable mission. The dashboard gives visibility into where money is spent (by activity area) and provides metrics to link that spending to mission outcomes.

Managing the charity’s resources responsibly

Trustees have a duty to understand the charity’s financial position, ensure that it is solvent and that reserves are maintained at an appropriate level. The dashboard metrics covering cashflow projections, reserve monitoring and overall financial position supports this duty directly.

Acting with reasonable care and skill

Making informed decisions is part of trustees acting with reasonable care. The dashboard presentation format should allow trustees without accounting experience to understand the charity finances and make informed decisions.

Ensuring the charity is accountable

Annual reporting and accountability to beneficiaries are part of this duty. Trustees who understand the charity’s financial performance through dashboard reporting will be better placed to explain it to others.

Financial reporting guidance

In their CC8 Guidance on Financial Management , the Charity Commission expects charities to monitor finances and report back to trustees on a regular basis. Dashboard reporting fulfils that expectation by providing a regular (typically monthly or quarterly) board-level financial overview, carefully curated to support trustees in the strategic financial oversight role they must fulfill.

Case study: Enabling better financial governance

Let’s look at a quick anonymised case study of dashboard financial reporting in action.

The trustees of a medium-sized youth charity were struggling with trustee engagement around finance. At board meetings they would spend ages discussing the financial report (compiled by their treasurer, who was a retired accountant) going over details that they weren’t sure how to interpret.

The treasurer prepared detailed management accounts for each board meeting – typically fifteen to twenty pages of income statements and balance sheets with additional narratives providing explanation for large spends or changes in financial position.

Financial reports would take up the first forty-five minutes of each two-hour board meeting. But at the end trustees felt uncertain on what had been discussed and what the charity’s financial position actually was.

We helped the charity redesign their financial reporting process around a two-page trustee dashboard showing:

• Overall financial position (income vs expenditure and year-to-date / twelve month trend)
• Cashflow (current balance and six month projection)
• Reserves (current level vs policy minimum/maximum)
• Income broken down by source (grants, donations, earned income) including year-to-date actuals against budget forecast
• Expenditure broken down by main activity areas (three main programmes plus support costs) with year-to-date actuals against budget
• Important fundraising metrics: number of active donors, average gift size, retention rate
• Restricted fund balances for the charity’s four main restricted funds
• A forward look with bullet points on anticipated major income or expenditure items for the next quarter

Each data point on the dashboard includes both a visual element (graph/chart or traffic-light style indicator) and a short paragraph giving narrative context. Detailed management accounts were still prepared by the treasurer each month but were kept as supporting documentation rather than presented as the main board meeting financial report.

The dashboard transformed board discussions around finance. Reporting took half the time as trustees had learned to read the dashboard and could spot trends and issues without needing detailed walkthroughs. And when discussion did occur it was more strategic in nature – trustees were now asking “what do we need to do about X?” instead of “what does this number mean?”

Trustees felt more informed about the charity finances than they had in years of monthly meetings dominated by detailed (but unsupportive) financial statements.

Stretching your dashboard

Every charity is different, and as your trustees become more financially literate you might consider adding advanced reporting elements to your dashboard to answer specific needs:

Outcome reporting

We’ve focussed on financial inputs on this dashboard guide, but what about outputs and outcomes? To make truly informed strategic decisions trustees will want to know not just where money is spent but what achievement it represents. Does your charity have clearly defined outcomes per programme/activity area you could include on the dashboard? Advanced reporting might tie in costs per specific outcome (cost per person housed for a homelessness charity, cost per student served for an education charity, and so on).

Scenario modelling

If your charity faces significant uncertainty around its finances – perhaps you’re reliant on a small number of large grants, or you’re going through a period of major strategic change – it might make sense to include scenario modelling on your dashboard. This might illustrate your projected year-end position under different scenarios – best case, expected case and worst case.

Benchmarking

Some charities use benchmarking data as part of their dashboards, to compare key metrics against sector norms. Are your fundraising cost ratios typical for charities of your size? Are your reserves high or low compared to similar charities? Benchmarking can be sourced from the Charity Commission’s register, sector umbrella bodies or via commercial benchmarking services.

Multi-year comparisons

While dashboard reporting will typically focus on one financial year of data, you may find it useful to show three-to-five-year trends for key indicators. Are overall income figures trending up or down over time? Are reserves growing or shrinking on a year-to-year basis? Are certain fundraising metrics improving or declining?

Trends over multiple years can show patterns not visible when looking at one year of data in isolation.

Avoiding common pitfalls

Ok, so you’re sold on the concept of trustee dashboards – but there are pitfalls to avoid too. Here are some lessons learnt having worked on dashboards for dozens of charities over the years:

Mixing it up

Don’t include everything. It’s tempting to think of the dashboard as a way of shoehorning every conceivable metric onto one spreadsheet. Don’t. Create a visually appealing spreadsheet report instead. Resist the urge to put too much on your dashboard. If you have 30 metrics on your dashboard you’re not using dashboards anymore, you’re using detailed reports in picture form. Stick to your ten to fifteen key metrics. If trustees need to dig into detail on a particular topic, there are other forums to do that – supporting schedules or finance committee.

Changing formatting

Once you’ve settled on a format don’t change it. Don’t start adding and removing metrics each month. Don’t change your visualisations week by week. If you change it once, they’ll expect you to change it again. Part of the effectiveness of dashboards comes from the consistency of the format. Make changes if you need to, but choose them carefully and make sure trustees don’t open the folder each month to find a completely different layout.

Throwing numbers at trustees without any context is confusing.

Giving metrics context

Context is king. Numbers on their own are meaningless. Every number on your dashboard should have a reference point; budget, prior year, target, policy thresholds etc. And where there are big variances against context, give a brief explanation of the variance. Showing income 20% behind budget will worry trustees if they don’t also see an explanation that a large grant payment has been delayed.

Presenting outdated information misses the point of dashboard reporting.

Keeping it up-to-date

Dashboards are valuable because they are timely. If you are still compiling your dashboard by hand and it takes two weeks to put together, then the information may be outdated by the time trustees see it. Consider investing in your systems to pull the data together for you.

Leaving the treasurer to wade through reams of figures to explain the dashboard himself may not be the best use of time.

Don’t forget the conversation

Dashboards are meant to drive conversations amongst trustees. They should act as the starting point for financial discussions at board meetings. If your trustees glance at the dashboard then move on to the next agenda item without discussing what’s actually on the dashboard, you’re doing it wrong. Trustees should be discussing the highs and lows on the dashboard – what’s changed since last month and what we can do about it. The treasurer/finance lead should use the dashboard as a springboard for his financial report. “Here are the key things you need to know from a financial perspective. Do you have any questions?” not “trustees I have some spreadsheets which I will try and wade through over the next half hour”.

Technology doesn’t solve problems by itself

Don’t think technology is the solution to every problem. Dashboards don’t have to be techy. You can create perfectly good dashboards using manual spreadsheets. However, modern technology can certainly help.

Built in reporting and dashboards

Most modern charity finance software now includes built in dashboard and reporting functionality. Not only does this mean you can design templates which automatically refresh with live data (saving hours of manual compilation), but also many products now come with drag-and-drop dashboard creators which allow you to build fully functioning dashboards without writing any code.

Integrated CRM data

Some charities use a customer relationship management system as well as finance software. If your CRM system can integrate with your finance system you can feed key fundraising metrics into your trustee dashboard. For example;

• How much did we spend on acquiring new donors last year?
• What is the lifetime value of those donors?
• Did we spend more or less than budget on our latest campaign?
• How much donation income did it generate?

Live dashboards in the cloud

Cloud based software can allow trustees to view up-to-date dashboards at any time not just at quarterly board meetings. By accessing their charity’s secure online portal trustees can see live trustee dashboards whenever they want to see them. They can also delve deeper into the areas that interest them if they wish.

Connecting multiple systems with business intelligence

Some larger charities use business intelligence tools to bring data from multiple sources together in one central dashboard. Business intelligence platforms allow you to connect to multiple systems (finance, CRM, programme management etc.) and then visualise and analyse the data using powerful dashboard tools. BI systems tend to be more expensive than your average finance system with dashboard functionality but are ideal if you need something more robust than your finance system can offer.

Technology should always be thought of as an enabler rather than a solution in itself. Handily you can now buy dashboard software that will fit into your dashboard. The key is to spend time working out what you want from your trustee dashboard first, and then find technology to support your approach.

Summary

Dashboards aren’t just spreadsheets, they’re a new way of thinking about board level financial reporting. We’re moving away from presenting data, towards presenting insight. Instead of overwhelming trustees with detail we’re equipping them with exactly what they need to provide effective oversight of the charity’s finances.

That matters because trustees have a big responsibility. They are personally liable for certain failures of governance. They are accountable to beneficiaries and donors for the charity’s performance. And they are responsible for making sure charitable resources are used effectively to deliver public benefit. Clear financial insight is required if trustees are to meet those responsibilities.

trustee dashboards can help. Designed well, a trustee dashboard should help trustees clearly see the charity’s financial position and trajectory. This allows them to spot trends, identify issues before they become problems, anticipate challenges and help trustees make better decisions about the charity’s resources.

That doesn’t just benefit trustees though – clearer, more effective trustee oversight benefits everyone. Finance teams should also see benefits from adopting the dashboard approach. By focusing trustee attention on key issues rather than drowning them in data you’ll improve the quality of financial discussions at board meetings. You’ll create a consistent framework for board level financial reporting (rather than one set of reports for trustees and detailed management accounts for the treasurer). And you’ll have a clear mechanism for surfacing issues which require trustee input.

Not sure where to start? Speak to your trustees and ask them what financial information they need to know about at each board meeting. Design a dashboard which provides them with that information clearly and consistently. Test it out. Refine it. Then make it part of the regular rhythm of governance at your charity.

Trustees who understand your charity’s financial position. Trustees who can provide effective oversight. Trustees who ask the right strategic questions. Trustees who can confidently say they’re fulfilling their governance responsibilities.

That’s the kind of clarity every charity board should be able to have. And dashboard reporting can help you get there.

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