Chairing a charity through financially challenging times

Chairing a charity has never been an easy job, but over the past several years, many Chairs have felt the role is becoming more difficult. They’re feeling the strain of financial pressures, such as unpredictable income, rising costs and the need to review decisions more frequently.

Chairs are holding this financial oversight alongside responsibility for confidence and trust, where staff, volunteers, executives and trustees are bringing their own cost-of-living concerns into the organisation.

We invited Chairs from across different charities to come together to discuss chairing in financially challenging times. We explored how boards are working through this uncertainty and what helps Chairs support good judgement when there are no easy answers.

Thank you to our speakers, Chris Loughran from Beamish Museum, Rosanna O’Connor from Collective Voice, Wendy Eley from MEAM (Making Every Adult Matter) and our attendees for sharing your insights.

If you’d like to join our Chair Forum and get details of our next Chair event, please contact Marie McQuade.

Charity chairs are managing financial uncertainty

For many charities, financial pressure now guides everyday decision-making.

Funding programmes often end before the next round is confirmed, local authority budgets are tightening and donation or partnership income is harder to forecast. In response, charities are drawing on reserves to manage unanticipated pressures.

Decisions on pricing, fundraising and commercial activity are becoming more complex and impacting deeply committed people who want to protect how work is carried out. Increasingly, we’re seeing income-generating activity prompting questions about how it aligns with the organisation’s values, whether through pricing decisions, commercial partnerships or commissioned work.

It’s up to boards to help navigate this. Chairs must stay close to the financial position while also taking time to explain the thinking behind income generation. Explicitness around priorities and trade-offs helps staff and volunteers understand why certain decisions are being made. Transparency doesn’t reduce the pressure, but it does support robust decision-making across the organisation.

How board culture shapes decision-making

Your board’s culture is central to how you make decisions.

Openness and trust can often help trustees work through difficult information collaboratively, while hesitation and silence make decisions harder and slower.

We discussed the benefit of being clear about the perspective each trustee brings, whether that is financial expertise, service delivery, lived experience or organisational culture. This helped other trustees to understand how people’s experiences shape their decisions, while also allowing people to respectfully and constructively challenge each other.

Having a culture of transparency means that Chairs can be open when there is no clear answer to a challenge. One speaker described how this allowed them, alongside the board, to be clear about what sat within their control and what did not. In turn, that helped maintain trust in the Chair, as they could see they weren’t operating from ego.

Supporting the chief executive and the wider organisation

Boards must also support chief executives who can also feel this isolation, particularly in smaller organisations where they must wear many hats.

Our speakers discussed the value of regular conversations that weren’t always about reaching decisions or fixing problems. By taking on a coaching approach, they created space to talk through team pressures, emerging risks and where support was needed. Reminding the CEO that the board’s role is to support the executive, rather than add pressure or expect certainty, helped conversations stay focused and productive.

This communication style extends beyond the board and executive. Clear updates, honest explanations about delays and time taken to acknowledge uncertainty help staff and volunteers understand what is happening and why.

Open communication doesn’t remove challenges, but it reduces speculation and helps foster trust and transparency, which keeps people onside, especially if they are feeling stretched.

Good governance supports resilience in challenging times

How income structure shapes risk

The risks facing a charity are closely linked to how it generates its income, particularly under uncertain financial conditions.

If your charity relies largely on self-generated income, you will have flexibility, but it can create sensitivity around pricing and access, especially when the people a charity serves are under financial pressure themselves. Small changes can have immediate consequences and need careful consideration.

If you rely more on grants, contracts or fundraising, you face exposure to delays, competition and shifting priorities that sit outside your control. This can make planning more difficult, particularly when funding cycles end before replacement programmes are confirmed or decisions take longer than expected.

Diversification as a longer-term response

Diversification is one way boards are managing this risk. Some organisations were broadening their mix of income streams to reduce reliance on a single funder or contract. Others were reviewing whether existing services could be funded differently, or whether parts of their work might attract support from new partners without changing the organisation’s purpose.

But diversification is not quick or straightforward. It takes time, requires close monitoring and depends on realistic expectations about return. In some cases, it also involved upfront investment or accepting that new income streams would take time to mature.

Boards play an important role in overseeing and challenging this work, asking where risk is genuinely being reduced and where it might be shifting elsewhere.

Using board structures to focus attention

Your board structure also becomes more important as financial pressure increases. For instance, strong finance committees can spend time on the details, ask focused questions and bring clarity back to the wider board. This protects the rest of the board from operational decisions that aren’t within their remit.

Sub-committees can help boards address issues that need more consideration. This can involve reviewing how the organisation presents its work to funders or partners, particularly where funding priorities are changing. Some charities were refining how they described parts of their offer, while staying clear about their purpose and the boundaries they were not prepared to cross.

Used well, these structures allowed boards to slow complex conversations down and get deeper into other conversations, without overwhelming executives or trustees at a time when capacity was already stretched.

Clarity about roles and responsibilities

Chairs spoke about the need to be clear about roles when the board is acting in a fiduciary capacity or contributing to strategic thinking.

This direct approach helps working relationships function more smoothly, as trustees are clearer about their responsibility and executives can engage openly.

Clear agendas, shared language and regular communication help to balance responsibility, particularly when decisions need to be made quickly.

Create a clear sense of direction

It’s also important to have a clear sense of direction that everyone on the board and executive can point to. Decisions should be weighed against this and allow the team to orient around a common understanding.

One Chair described setting a small number of priorities for the years ahead, while accepting that circumstances might change. This helped refocus on what mattered most and provided context for difficult trade-offs when time, funding or capacity were stretched.

It also helps teams to understand why certain choices are being made and what the organisation needs to protect.

Supporting chairs into the future

Chairing now involves holding uncertainty over longer periods, supporting executives who are carrying multiple responsibilities and helping boards stay focused when decisions feel more complex and harder to revisit.

It helps to know that other chairs are feeling the same way about the current challenges facing the charity sector.

By sharing these stories and what we can learn from them, we reduce the feeling of loneliness people can develop and acknowledge some of the more difficult parts of the role – whether they’re common or not.

We know these pressures are unlikely to ease quickly. We are launching our Chair Forum to promote connections with other chairs across sectors. Supporting each other will help to navigate uncertainty and offer different perspectives.

Please contact Marie McQuade if you’d like to join this group.