1. Organisational purpose

Principle

The board is clear about the charity’s aims and ensures that these are being delivered effectively and sustainably.

Rationale

Charities exist to fulfil their charitable purposes. Trustees have a responsibility to understand the environment in which the charity is operating and to lead the charity in fulfilling its purposes as effectively as possible with the resources available. To do otherwise would be failing beneficiaries, funders and supporters.

The board’s core role is a focus on strategy, performance and assurance.

Key outcomes

  1. The board has a shared understanding of and commitment to the charity’s purposes and can articulate these clearly.
  2. The board can demonstrate that the charity is effective in achieving its charitable purposes and agreed outcomes.

Recommended practice

  1. Determining organisational purpose
    1. The board periodically reviews the organisation’s charitable purposes, and the external environment in which it works, to make sure that the charity, and its purposes, stay relevant and valid.
    2. The board leads the development of, and agrees, a strategy that aims to achieve the organisation’s charitable purposes and is clear about the desired outputs, outcomes and impacts.
  2. Achieving the purpose
    1. All trustees can explain the charity’s public benefit.
    2. The board evaluates the charity’s impact by measuring and assessing results, outputs and outcomes.
  3. Analysing the external environment and planning for sustainability
    1. The board regularly reviews the sustainability of its income sources and business models and their impact on achieving charitable purposes in the short, medium and longer term.
    2. Trustees consider the benefits and risks of partnership working, merger or dissolution if other organisations are fulfilling similar charitable purposes more effectively and/or if the charity’s viability is uncertain.
    3. The board recognises its broader responsibilities towards communities, stakeholders, wider society and the environment, and acts on them in a manner consistent with the charity’s purposes, values and available resources.

 

  1. Determining organisational purpose
    1. The board periodically reviews the organisation’s charitable purposes, and the external environment in which it works, to make sure that the charity, and its purposes, stay relevant and valid.
    2. The board leads the development of, and agrees, a strategy or plan that aims to achieve the organisation’s charitable purposes and is clear about the desired outputs, outcomes and impacts.
  2. Achieving the purpose
    1. All trustees can explain the charity’s public benefit.
    2. The board evaluates the charity’s impact, outputs and outcomes on an ongoing basis.
  3. Analysing the external environment and planning for sustainability
    1. The board regularly reviews the sustainability of its income sources and their impact on achieving charitable purposes in the short, medium and longer term.
    2. Trustees consider the benefits and risks of partnership working, merger or dissolution if other organisations are fulfilling similar charitable purposes more effectively and/or if the charity’s viability is uncertain.
    3. The board recognises its broader responsibilities towards communities, stakeholders, wider society and the environment, and acts on them in a manner consistent with the charity’s purposes, values, and available resources.