Accountability of Muslim charities – We talk to British Muslim TV (Sky 752)

“Accountability of Muslim Charities” – Nasir Rafiq talks to Mohammed Shafiq on BMTV Questions live during Ramadan 2021, Wednesday, 28 April 2021, 4pm.

 

Nasir Rafiq is the Founder Director of Dua Governance Chartered Accountants and Business Advisors. He is Financial Governance Expert and provides a wide ranging accounting, internal audit and financial advisory services to a large portfolio of Muslim charities of all sizes in UK.

 

Nasir regularly writes a professional blog for those involved in the charity sector. He analysed the accounts of top 20 Muslim charities to assess the impact of lock downs during Ramadan. Link https://bit.ly/3bPB4a6.

 

He also analysed the overheads of Muslim charities. Link https://bit.ly/3veyX7p.

Who Controls?

I work with Boards and the CEOs of many large charities and NGOs and I often come across this dilemma between Trustees and CEOs. I was once asked in Board meeting of a large NGO by a Trustee that sometimes, the Board is too controlling and sometimes it is the CEO – how can we find a balance?

 

I feel this is a wrong question and therefore any answer to this question will be a wrong one.

At Board and Executive level, the issue of “Control” should be third in line and should be discussed in the context of two greater issues. Objectives and Risks.

 

Charities are charities and Trustees become trustees because of the stated “Objectives” of the charity / NGO they belong to – the CEO is appointed to help the Trustees achieve these corporate objectives.

 

The utmost priority has to be to achieve the “Objectives” – any activity that harms this, should be considered a “Risk” to the charity. Once the “Objectives” and the “Risks” are clear, it should THEN be about “Control” – for example how are the risks controlled.

 

If the “Controls” requires CEO to take the lead, then be it and if it requires the Trustees to take a lead then be it. As long as the “Controls” reduce the “risks” and helps to achieve the “Objectives”.

Outside the above context, the issue of “Control” between Trustees and CEOs becomes an issue of mistrust or ego and therefore will never result in a compromise and positive outcome.

 

So how do we find the balance?

In the above battle and contrary to what many think, I often find the CEOs on the wrong side. The Trustees were involved in setting up many of the large charities and work voluntarily, having made many sacrifices. Naturally they have “control”. The CEOs often complain that Trustees do not give them control –

 

The question that is often ignored by the CEOs is “What will the CEO give in return to the Trustees for that control?” The solution to all issues in my experience hides in how “effective, compelling and professional” the answer is.

 

By Nasir Rafiq BA ACA – Governance Expert

Webinar: Discretionary Grants Online application

 

In this webinar hosted by Waqar Altaf, (Governance Manager), Nasir Rafiq talks through the online application process for discretionary grants at Birmingham City Council. He focuses on Mosque charities and on the expected general approach of Councils.

 

Webinar Speaker

Nasir Rafiq BA, FCA (@Dua Governance)

Nasir Rafiq is a widely experienced Chartered Accountant and a Charity Financial Governance Expert. He is the Founder and Director of Dua Governance – a professional firm that provides a wide range of accountancy and advisory services to many charities (www.duagovernance.com).

 

During the lock-down crisis, Nasir has been helping Mosques and charities by writing blogs at www.duathoughts.com and by holding webinars. Recently and on behalf on many Mosques he has now engaged Birmingham City Council to address specific concerns they have around grants.

Unity FM Radio: Local Councils approach for making Covid19 support grants to Mosques

 

Lockdown Special Edition

4th June 2020, 5:30pm

Unity FM presenter Ahmed Bostan talks to Nasir Rafiq (Chartered Accountant and Charity Finance Expert) about Birmingham City Councils approach towards Mosques in relation to Covid19 support grants. The current approach of the Council is making it hard for Mosques to apply despite being heavily financially effected by the lock down.

Covid19 – Abysmal Government support to UK Mosques

Mosques are hard hit during the Covid19 lockdown crisis. All Mosques across all sects and cities adhered to the Government guidance immediately and shut their doors to daily worship.

This was a difficult and painful decision for Mosque management, daily and Friday worshipers and for parents who sent their school children to study Quran every evening in the Mosque. This pain was aggravated as the busiest period for Mosques, the holy month of Ramadan fell in this period.

 

Govt support has done little to bridge the gap

 

Underlying the spiritual deprivation was the financial costs, as around 75% of Mosques income relied upon the donations collected each Friday, education fees and special donations raised during the month of Ramadan – unfortunately, the Govt support has done little to bridge the gap.

 

Furlough scheme – not fit for purpose

 

The only meaningful Govt support has been the job retention scheme which required to furlough staff, meaning sending staff on leave. This was difficult for Mosques to utilise as the paid Imam position is crucial for fundraising, not just for leading the prayers and delivering sermons. This also created a situation where an Imam who is not able to do his job properly and fully, however because of online sermons (religious obligation) technically does not qualify for the job retention scheme.

 

Misjudged guidance on volunteering

 

The Governments advise on placing restrictions on volunteers misjudged the importance and the role of volunteers within the faith sector specifically – much of the volunteering is driven by spiritual reasons which followers of the faith consider obligatory on themselves. Placing restrictions on volunteering within the business sector made sense, however the faith sector should have been exempt to it.

 

Last hope – Council grants did not work

 

After the Job retention scheme, the Mosques hoped to apply for the coronavirus grant from the local council as the business loans options was not considered suitable or viable for Mosques. All Mosques operate from buildings and due to Government advise these buildings were closed immediately to the public.

 

The Government had decided to use the local council business rates system and the date of 11th March 2020 to issue grants using rateable value (RV) and the awarded discounts under two schemes, mainly the small business discount and the expanded retail discount. In my view this was a sensible approach, however as it turns out, this discriminated against charities that did not have retail or trading operations, despite operating from a building and being subject to similar levels of business rate discounts similar to businesses.

 

Government guidance and its interpretation

 

Government guidance for Coronavirus RHL Grant Fund dated 1 April 2020 under the section ‘Properties covered by the fund’ stated that Eligible charities which have received charitable rate relief or discretionary relief can still get the grant. Local councils interpreted this guidance only relevant to charities with trading operations. This is despite the published Government guidance not explicitly excluding charities without trading operations in the guidance dated 1 April 2020.

 

Many professionals working in the charity sector understood this to cover charities already receiving discounts on their business rates with RV below £51,000.

 

Online applications not charity friendly

 

The local Government online grant applications were designed in a way that only limited companies or those that were self-employed with a UTR number could apply – Charitable Trusts often the structure for small Mosques, were left out. As a result of the local council interpretation of the guidance, charities missed out on the grants, especially Mosques during their most critical time of the year. Vast majority of applications made by Mosque charities are rejected by the local councils.

 

The use of discretionary funds – issues

 

The Government has issued new guidance on Local Authority Discretionary Grants Fund, dated 29 May 2020. Local councils are now using this guidance to consider making grants to charities without trading operations (i.e. Mosques). Local councils will now introduce a new online application in June 2020. Therein lies the issues:

  1. The new guidance gives an option to the local council for giving grants less than £10,000 – this was not the case for businesses. Local councils may use this to save monies available for grants. Mosques often run in buildings, not in rooms – even the £10,000 one off grant is often not sufficient.

  2. The additional option for granting less than £10,000 adds another consideration for local council staff, potentially delaying the grant that is already significantly delayed.

  3. All charities will have to reapply online for the discretionary funds. When the initial grants were introduced in April 2020 – On average the Councils took 3-4 weeks to process them. This means Mosques may have to wait for another 4-8 weeks before cash can hit their bank accounts.

Although the Govt moved fast to support small businesses, the approach towards supporting small charities, especially within the faith sector (i.e. Mosques) has been lacking and of a frustration.

 

My recommendations

  1. Muslims representation bodies and Councillors should lobby local councils to expedite grants to Mosques and other faith institutions – during the lock down crisis, many Mosques and other faith institutions became community hubs to distribute food to the vulnerable and NHS staff. They play a vital role in the community and for promoting the spiritual and mental well-being.

  2. Local councils must understand the impact of Ramadan lock down on Mosques.

  3. Central Government should be lobbied to make Imams and faith leaders exempt from the volunteering restriction within the job retention scheme.

  4. Large Muslim charities should consider partnerships with Mosques to help them with their immediate financial issues. Many of the donors to Muslim charities not only use these Mosques, it is the sermons and reminders delivered through the Mosque that encourage many to donate in the first place.