filter – duagovernance

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Visiting Lecturer appointment at Birmingham City University

We are pleased to announce that Nasir Rafiq has been appointed a visiting lecturer at Birmingham City University to support the MSc Internal Audit and Consultancy programme, accredited by the Chartered Institute of Internal Auditors. For the past 24 years, he has conducted high-profile internal audits in the government, corporate, and charity sectors. he has worked in Big 4 accountancy firms, FTSE 100, and founded the practice, Dua Governance. His Internal Audit experience has taken him to Europe, Africa, Southeast Asia, and the Far East. This position will allow him to share his experiences with students already working in internal audit across sectors in prestigious organisations. It will also enable him to further flex his thoughts in this area and inspire him to complete his book covering this area for faith-based charities. “Robust Internal Audits are the corner stone for Good Governance” The Charity Commission and good governance code require charities to manage risks with effective policies and a sound control system. The charity’s internal assurance system helps leaders determine whether the controls and policies effectively manage actual risks. This system is a tried-and-tested modern system that has been known to strengthen governance in charities. Email: info@duagovernance.com End –

October 22, 2024 No Comments

Blogs

The Journey of life, its paths & destinations

I went for a walk in a nearby Valley Park. This comes after some emotional and thoughtful weeks after the sudden death of a university sister. I worked with her in the Leicester University Islamic Society, which I presided over 24 years ago. She died from an illness that she hid from her closest. Her death shocked all who knew her and worked with her. She was loyal, shy, caring and principled. After leaving University, she took on her family business and expanded it. Many remember her conduct with family, employees, suppliers, and customers. She was a role model for many, and many relied on her for her leadership and the selfless care she gave to them. Her death invoked memories among the group of her university friends. Although it had been 24 years since I had met or spoken to her, it also made me revisit my steps back then. As I walked through the park, I contemplated my life journey. Strangely, the changing scenery and paths around me started to talk to me in my imaginary world. I began to paint a picture in my mind of my life journey. This path led to other paths; sometimes, I took the wrong turn, turned back, and chose another path. This reminded me that our lives take similar paths and turns. I started my walk in the park by choosing a path with a target destination: Swan Lake. This path led to other paths; sometimes, I took the wrong turn, turned back, and chose another path. This reminded me that our lives take similar paths and turns. After University, I took a path and made decisions that dictated my next 24 years. I started to revisit and question my paths as my memories returned to those moments 24 years ago. The weight of the “what if” moments started to play heavily on my chest as if failures of lost opportunities underpinned my worldly successes. Allhamdulillah, I may have had a promising career and life that many may desire. I discussed this in a recent radio interview (see link below). Yet, my mind started questioning this for all the paths I could have taken, the lost opportunities, and the many achievements that could have been different and perhaps better. The weight of the “what if” moments started to play heavily on my chest as if failures of lost opportunities underpinned my worldly successes. I felt sadness and pain as I walked and crossed different paths. This was not about personal wealth but the impact on broader society and infrastructure. Was I lost in my life journey? I questioned myself as I continued my walk. Lost in my thoughts, the path opened to my set destination. It is a beautiful lake with stunning majestic swans gliding through the water under a clear blue sky, making everything clear to observe and enjoy. A painful reality hit me as I sat on the bench to soak in the moment, processing my thoughts. The sister’s death reminded me of the temporary nature of this destination, this world, these life paths that we choose to walk on, these destinations that we set ourselves, and all our life struggles. It all eventually dies and moves on. What is left after we are gone is what matters. What matters are the memories of the moments we live, the impact we have on the lives of others, and how they remember us, just like the memories of this sister. What is left after we are gone is what matters. What matters are the memories of the moments we live, the impact we have on the lives of others, and how they remember us, just like the memories of this sister. We remember her legacy, kindness, principles, leadership, and caring nature. This realisation influenced me and replaced my immediate memory of my path choices. I remembered the sounds of the birds chirping, the cool breeze, the happiness of people who walked past me, and the kindness of the old couple who warned me of some rough paths ahead. I concluded that it is not the choices of the life paths that we take that matter; it’s what we do with them and how we conduct ourselves as we walk them that define us. I revisited my life journey to find these moments. I was accompanied by a loving and caring wife, the childhood of my beautiful daughter, and our travels as a family, making every moment worth living for. During my professional work, solving and resolving problems in charities and successfully dealing with crises they find themselves in is an aspect of my life that matters, not career choices. We may think we chose the wrong path or ended up in the incorrect destination—this does not matter, as it all ultimately dies. God decides our paths to test us. We may think we chose the wrong path or ended up in the incorrect destination—this does not matter, as it all ultimately dies. God decides our paths to test us. We should focus on what stays and lives on: the memories and impact we leave on this temporary world. We need to fill our paths with these memories, regardless of the paths that we embark on. Content with my conclusions, I returned to my car as if I had found a treasure in my quest as I remembered this special sister. Having lived my old memories once more, one thoughtful memory braced me. A poetic verse of a famous Sufi poet, Altaf Hussain Hali. I read and memorized in Urdu as a kid. It went on something like this: Valuable lessons are taught to us by graves. We find this treasure from this burial. I had found my treasure through the sad death of this special sister of ours. May Allah swt grant her the highest paradise. Ameen.

May 16, 2024 No Comments

Blogs

The Gaza Crisis, UK Mosques & Muslim Charities

The recent Gaza crisis has affected us all. Thousands of civilians have lost their lives in Gaza. The social media and news coverage of women, children and the vulnerable being killed is heart wrenching. Over 2m of the population of Gaza is deprived of water and fuel and face a dire humanitarian crisis as highlighted by independent UN agencies. In times like this, many feel obliged to act and campaign – this is not only a natural human response, but also embedded within the faith of many Muslims. In times like this, many feel obliged to act and campaign – this is not only a natural human response, but also embedded within the faith of many Muslims. The Muslim international relief charities play a crucial role and provide a valuable service in facilitating this donation to the intended population of Gaza. Recently I have been contacted by concerned individuals asking various questions relating to donating or raising funds to Gaza. In this blog, I provide some answers to three questions: Question one: Can my charity raise money for Gaza? It all depends on the charitable objectives and purpose of your charity. If your charity has an objective to provide relief from poverty and / or to provide relief to disaster-stricken people and it does not restrict to a particular location other than Gaza, then your charity can raise funds for Gaza. The following consideration are important to note: 1. Due diligence of delivery partner – Hamas proscription Vast majority of Muslim charities, if not all work through a delivery partner in Gaza. Funds are transferred to these partners to deliver the relief projects. Gaza is governed by Hamas and under UK law it is proscribed as a terrorist organisation. Hence it becomes illegal if any funds of a UK charity end up with Hamas. So, UK charities must satisfy themselves on the following: the delivery partner is not controlled by individuals on the UKs sanction lists. The delivery partner does not use suppliers connected to a sanctioned entity or individual. The delivery partner does not pay rent or taxes to the Hamas regime. Vast majority of Muslim charities, if not all work through a delivery partner in Gaza. 2. The ability to deliver relief Charities will also need to check the ability of the partner to deliver the projects in Gaza. This can be checked by obtaining the following: Governing documents, Bank statements, past project reports, organisational charts, policies, project proposals and references. 3. Satisfying the banks Transferring monies to Palestine generally and Gaza especially is not easy. Banks expect charities to have done their due diligence and will often request evidence to confirm this. Lack of timely evidence after the bank requests information often results in the UK bank or corresponding bank or banks in Gaza blocking or returning the funds. 4. Disclosing the name of the delivery partner When preparing the annual financial statements, charities are subject to charity accounting rules called (SORP). These rules require charities to disclose the name of the delivery partner used in that period and the amounts paid to them in that year and in the prior year. I sometimes find some charities attempting to omit this information in their annual statements giving a false impression to readers of the statements as if the charity directly delivers projects in Gaza. Overheads paid to separate entities that deliver projects on behalf of the UK charity are not disclosed in the UK charity accounts. This is one of the reasons why for transparency purposes the charities are required to disclose the name and total amount paid to the deliver partner in their annual financial statements. Overheads paid to separate entities that deliver projects on behalf of the UK charity are not disclosed in the UK charity accounts. Question two: Can my Mosque raise funds for Gaza? Yes. and this depends on the charitable objectives of the charity that runs this Mosques. Mosque charities often have objectives that are restricted to furthering the religion of Islam by providing a facility to worship – this may not allow fundraising for international relief projects unless a clear link can be made with the act of worship. For example, Mosques may be able to raise Zakat funds and use a delivery partner in Gaza to execute the Zakat funds to the needy. Mosques can partner with international relief charities and provide them access to their congregation and facilities to directly raise funds for Gaza. Mosques can enter into agreements with these charities to restrict the funds to specific projects and be compensated on any costs incurred in raising these funds. Question three: Can Mosques carry out political campaigns and activity for Gaza? Generally, the answer is No. Charity Commission has detailed guidance on this topic. The link to this detailed guidance can be found here. The general rule is that a charity can carry out campaigns and / or political activities only if it furthers their objectives stated in their governing document. Mosques seldom have human rights objectives in their trust deeds or constitutions. Therefore from Mosque platforms and / or using Mosque resources to lobby local or central government for a foreign policy change in relation to Gaza may not strictly be considered an allowable activity. This does not mean Mosques cannot or should not voice their concerns or carry out activities in responding to this crisis. Below is a list of activities Mosque can and should carry out: 1) Educating the congregation on the current situation in Gaza through religious sermons and lectures. 2) Making statements that link back to faith, sanctity of life, religious harmony and coexistence with other faiths. 3) Providing facilities and access to congregations to activists for education, petitions, protests all for awareness purposes. 4) Providing young people safe spaces to discuss the issues with a faith lens and in the context of the society Mosques operate in. 5) Inviting local politicians to address the congregations on their

October 21, 2023 No Comments

Blogs

Bank Account Closures & UK Muslim Charities

The Nigel Farage’s bank account closure with a bank for the rich has hit a nerve for the Government and the media. The calling of the banking leaders to Downing Street and the resignations of the Group CEO and its subsidiary Banks CEO shows this was no little crisis. This whole saga as it played out questioned the role of banks in our lives and wider society. I deal with banking issues regularly for my charity clients, large and small. I have seen many examples, good and bad, so it’s imperative to understand the role each plays to understand the real issues. The Banks and their role in business and society Banks are private businesses, set up to make money for their shareholders. They are not politically aligned (we think so). Yes, during the banking crisis of 2008, the Government stepped in and now owns 39% of the NatWest Group – this is rare and did not change the business objectives of the bank. Banks are subject to stringent anti money laundering and government sanctions regime with hefty fines when it goes wrong. All designed to regulate the banking conduct to the government domestic and international needs hence international events and wars make this a constant changing environment for sanctions. The introduction of the Politically Expose Person (PEP) protocols to stop corruption by people misusing public office adds another dimension to banking responsibility and risk management. Nigel Farage was picked up by his bank as a PEP but what made the story interesting is that after he made a subject access request, he found that his political views were also considered as a reputation risk for this niche bank and its niche clientele. “The Nigel Farage story has shaken the very foundations of trust in the wider banking system”. This has shaken the very foundations of trust in the wider banking system. Given the control banks have on individuals and entities, this very notion that banks consider political views when not obliged by regulations, becomes problematic. So where do the Muslim charities in the UK fit into all of this? The impact of 9/11 was a game changer for Muslim charities operating in the West. Muslim charities suddenly found themselves working in high-risk countries subject to sanctions or where sanctioned entities operated. The resulting sanctions regime instantly choked many international charity banking facilities without explanation. No regard was given to any legal or illegal activity as the “perception” of the “ability” to breach sanctions started to dictate the banks risk management process and de-risking. The Muslim sector became guilty until proven otherwise. The International relief sector already had inherent risks of money laundering, aid diversion and fraud for banks to consider, for the Muslim charity sector, it became just that more challenging to convince banks in this new environment. “As a result of de-risking of banks, many individuals unfairly paid the price and their associated charities despite having done nothing wrong or illegal” Another dark side of this additional scrutiny by banks was the spotlight on Trustees. Their social media profile and historical news coverage on the web searches started to become a vital part of the bank’s due diligence. The banks started to de-risk charities based on unfounded risks and perceptions relating to trustees. Many individuals unfairly paid the price and their associated charities despite having done nothing wrong or illegal. Despite this, the Muslim charities in UK generally responded positively. Charities improved their due diligence processes and vetting of partners and responding to banking queries. Many Muslim charities now use the same due diligence software to vet their partners and staff as the banks. Despite the pressures since 9/11, the Muslim sector in UK has exponentially grown with talks of annual income reaching £1bn in UK. This could not have been possible without the partnership Muslim charities have with their banks. However, in transferring money abroad charities continue to face blocks and funds returning. In some instances, and surprisingly, banks have been trigger-happy in closing banking facilities without any explanation. Even charities with just UK operations also affected. So, what should be done, a question I am often asked. My response: 1. Financial Standards must not only be improved, but they should also be exhibited. The Muslim community bruised by constant unfair and malicious media headlines, at times feels as if the whole world is against them. So, when a bank asks legitimate questions, some wrongly see this as an attack on their faith, creating an “us and them” narrative. This approach risks undermining real issues relating to good governance, compliance systems, proper due diligence, and effective audit trails for “end use of funds”. “Muslim sector should confidently and boldly market and exhibit the progress made in addressing compliance and governance issues” Muslim sector should confidently and boldly market and exhibit the progress made in addressing compliance and governance issues. Muslim organisations should sign up to a standard that works for banks and helps to demonstrate good financial governance. Sometimes the race to raise monies creates pressure to look good before donors with emotional marketing material in the year-end financial statements, ignoring the needs of other key stakeholders like banks. Muslim charities like all charities should learn from the mainstream charities that practice good governance. Often such charities, in their annual audited financial statements, will discuss their governance or when it fails against their actions plans and risk management extensively. They do this to assure their stakeholders that they understand the risks relevant to them and how they mitigate these risks. 2. Effective or meaningful third-party check or oversight over the banks decision to close an account. When a charity finds itself with a bank closure notice, it finds limited alternative options for new banking facilities. This has a devastating impact on the vital and often life and dignity saving work charities deliver. “There is no effective or meaningful third-party check or

August 2, 2023 No Comments

Blogs

Turkiye / Syria Earthquake, the Relief and Sanctions

The scenes of the earthquake rescue have been heart wrenching. With the coldest nights upon the effected, seeking shelter in the buildings that have survived, has become a challenge for many. This risk of collapse, aftershocks and the memory of the disaster that struck, is too much. Many charities are reporting a record-breaking fund-raising campaign. The world has responded, and UK charities have once again responded to the call. Many charities are reporting a record-breaking fund-raising campaign. Despite the cost-of-living crisis, rich and poor have reached deep into their pockets, some even donating their household items to awaiting containers ready to go. The dark open secret In the midst of this crisis where the best of humanity has come out, there is an open secret with dire consequences on the most desperate – the sanctions over Syria. As the Syrian crisis began, banking financial sanctions were imposed on the Syrian Government, making aid transfer of funds to Syria impossible. The current focus is on the eastern Turkyie and only the areas of Syria under the control of Turkyie Government. The rest of Syria under the Syrian Government control is out of reach with the affectee losing out. The sanction regime The UN and / or the UK government place financial sanctions / restrictions to achieve a specific foreign policy or national security objective. The Office of Financial Sanctions Implementation (OFSI), part of His Majesty’s Treasury (HM Treasury), provides information for charities operating internationally in its guidance for the charity sector. Those working in the international charity sector must refer to this. In the banking world, the risk associated with charities working in sanctioned countries is considered to be high. Consequently, Muslim charities working in Syria often become a target. UK financial sanctions apply to all entities and persons subject to UK law, wherever they are in the world. These cannot be ignored as it is crime to breach these sanctions. The banks take sanctions seriously and will not engage in business if there is a risk of a sanction breach. In the past banks have attracted hefty fines from regulators for facilitating a sanction breach. In the banking world, the risk associated with charities working in sanctioned countries is considered to be high. Consequently, Muslim charities working in Syria often become a target. Recently an update to Syrian sanctions regulation came into force. Although this opened a restricted corridor for INGOs, I expect only the large mainstream non-Muslim INGOs to benefit. Many Muslim charities may still lose out. So what should charities do A meaningful due diligence is a must to have any credibility with the banks. Five key components being: 1. Know the sanctions: Its not enough to operate a international relief charity just driven by faith values. Those running the charities must know the sanctions regime and therefore must refer to the OFSI list of restriction before engaging an individual, partner, or supplier for work in Syria. 2. Adopt the right policies: This is the minimum standard required to operate within the international relief sector. Anti money laundering policies, sanctions compliance policy, counter terrorism financing policy, anti-fraud and bribery policies are ALL relevant – these may be separate documents or all on one. The coverage and trustee approval is what matters. Charities operating in high risk countries are often subject to enhanced due diligence by banks. As part of this, the banks assess compliance to policies and expect to see real examples showing compliance. Therefore, these policies should be relevant and up to date. 3. Audit Trail matters: High risk banking transactions are flagged up by the banks AI systems. Charities are then contacted for information relating to these transactions. This includes the following: Background on the recipient of the funds – this is where the documents confirming checks against the OFSI lists matter. Personal references do not count. Rationale of the transfer – this is where project proposals, project invoices become relevant. Charities that compromise on paperwork and run based on verbal assurances, lose out. Complying with sanctions is a legal requirement and a crime if breached 4. Employ the right people: Complying with sanctions is a legal requirement and a crime if breached. Charities should ensure that the right senior person is the overall lead for compliance to the policies. Staff normally in the finance department independent to Programmes should ensure that the necessary checks are completed and documents completed before transfers are made. Management override of policies compromises a key control for banks. 5. Relationship with the bank manager: Charities should treat the bank as a member of their team. They often have more intelligence over charity finances and business relationships than charity trustees and management think. Be open and ensure the bank to be one step ahead, so when you transfer funds, the bank systems already expect such a transfer. Banks don’t like surprises as the whole ani-money laundering regime is based on “knowing your client”. Banks don’t like surprises as the whole ani-money laundering regime is based on “knowing your client”. Working in the international charity sector requires embedded and robust due diligence processes and an able management to navigate through the complexities of international fund transfers. Mere good intensions are not enough. And it is also the case that the politics and resulting sanctions can restrict vital humanitarian aid that saves lives and protects dignity of those in most need. There is a cost that humanity pays. End – Author: Nasir Rafiq is a widely experienced Fellow Chartered Accountant (ICAEW) and a Charity Financial Governance Expert. He is the Managing Partner of Dua Governance, a Charity Governance specialist accountancy firm. Nasir has held many senior finance positions within the UK charity sector and continues to advise many charities on financial governance matters. Email: info@duagovernance.com

February 19, 2023 No Comments

Blogs

Businesses – A force for good, the Islamic concept

Often businesses are considered to be secular, money-making entities that have nothing to with religion or morality. Attributes such as cheating, tax avoidance, aggressive marketing, deception, and exploitation at the cost of preventable harm and wellbeing are by which businesses and corporate world in general are sometimes identified with. This is not the case as far as the Islamic concept goes. Prophet Muhammed (pbuh) was a businessman when he became a Prophet at the age of 40. At the time he was married to Khadijah RA, a prominent businesswoman In Makkah. Makkah was in the middle of some famous trade routes. One route was to Shaam (Syria) in the north during the hot summer months and the other to Yemen in the south during the winter months. The nobles in Makkah were mainly traders. This is why some of the early noble companions of the Prophet Muhammed (pbuh) were traders and businessmen. They continued their trades and businesses after accepting Islam whenever they had the opportunity to do so. Some prominent companions known for their successful businesses and wealth are Abdur-Rahman ibn ‘Awf (RA) and Uthman ibn Affan (RA), both were among the ten promised paradise and glad tidings. Islam promotes business and trade – this activity becomes a force for good for humanity. Islam therefore provides a comprehensive framework for businesses to operate within. Unfortunately at times this is overlooked and ignored by Muslims over technical debates concerning permissibility of individual business transactions. Some aspects of this framework are as follows: Islam focuses on consumption, and this dictates production and supply In Islam what is not permissible (Harram) to consume is also not permissible to produce. This sets an important principle. A moral guide for businesses. Businesses become champions of promoting what is permissible (Halal). Mosques and Scholars can educate and give advice, but the actual Halal activity is facilitated by businesses, and this is what then influences consumer behavior – In Islam, business is not just about profits, they promote the good (Halal) as well. The approach of Islam to Halal and Harram is set by the Holy Quran. It allows everything and prohibits exceptions (Quran 02:173). Being religious does not restrict business thus Islam provides ample opportunity for businesses to supply and produce. Honesty and accountability should be at the heart of business ethics Prophet Muhammed (pbuh) was known for his honesty and accountability in his business dealings. This is what stood him out and led to his marriage to his first wife Khadijah (RA). Even his enemies vouched for his honesty and accountability in his business dealings. His companions followed his example. Quran refers to the story of the Prophet Shoaib (RA) and how God punished the people of Madyan (Midian) for not giving full measure and weight in their business dealings and for creating mischief (Quran 07:85). In Islam honesty and accountability is at the heart of business dealings and reporting. As part of the Islamic faith, one may be able to dodge earthly regulators, the belief dictates the ultimate accountability to be in the grave and on the Day of Judgement. This is what focuses the mind and ensures honest and transparency in business dealings and reporting. Social responsibility is a mandatory worship (Zakat) for businesses in Islam It is obligatory on every able Muslim adult, and this includes business owners to give Zakat (religious donation) each year. This is traditionally 2.5% of one’s savings more than a year less short-term liability. Islam prescribes those that should benefit from Zakat funds, these individuals being the most vulnerable in society. This way the most vulnerable in society became stakeholders in businesses and businesses contribute to the uplifting of the society they operate within. Another aspect of Zakat contribution is the way it is calculated. Its not based on in year profits as traditionally business taxes are instead the focus is on the top half of the balance sheet, being the net savings more than a year. Through this mechanism God ensures wealth is not accumulated in fewer hands in savings assets and that instead assets are put into use for generating further economic activity and charity. In Islam business performance generates and decreases wealth Usuary is prohibited in Islam and it is replaced with trade and business. Money is not treated as a product that can be hired out instead it is invested in business. The investor becomes a stakeholder in the business with success and failure resting with all. This ensures wealth is generated and decreased based on business performance and effort and not on social class and privilege. The consequence being that an Islamic business mind then becomes focused on business activity and performance and not on maximising wealth without effort or risk. The concept of business success and failure rests with the Almighty Business performances often very much rely on nature and factors outside the control of humans, business owners, employees, and suppliers. The recent pandemic has taught us this lesson in a very hard and real way. Quran (18:32-44) refers to a story of two businessmen. One boasted of his wealth and business strength and while the other reminded him of his limitations before the Almighty. The one that boasted eventually saw his crops destroyed by nature overnight with nothing left. This way the most vulnerable in society became stakeholders in businesses and businesses contribute to the uplifting of the society they operate within. Another aspect of Zakat contribution is the way it is calculated. Its not based on in year profits as traditionally business taxes are instead the focus is on the top half of the balance sheet, being the net savings more than a year. Through this mechanism God ensures wealth is not accumulated in fewer hands in savings assets and that instead assets are put into use for generating further economic activity and charity. In Islam business

August 24, 2022 No Comments

Blogs

The Power and Art of Mediation

In the past two decades, I have been involved with many high profile mediation’s. This has become a key feature in many of my past and present engagements. Be it, disputes between trustees, disputes between employee and trustees, issues with regulators or between family business partners. Each time, I came in when all options have been exhausted and there is a stalemate, risk of self-destruction or Charity Commission intervention. With Allah’s blessing, I have always prevailed and have been able to resolve the matter amicably. My suggested solutions and plans achieved satisfaction by all parties and a “win win” solution for all with a clear way forward, Allhumdulillah. Although the outcomes were satisfying, the journey to it was often bumpy with lots of grit, patience, and sacrifice involved. My approach to mediation is not conventional. Often the traditional culture forces the disputing parties to accept each other’s demands. Emotions and Islam is used to exploit each parties guilt and force corporation on moral grounds. This seldom results in long term and lasting solutions. My approach is far, from it. Mediation should be about justice, fair judgement and agreeing on what is right and fair, in the context of the overall objectives of the organisation and its expected destination. For me, mediation is about justice, fair judgement and agreeing on what is right and fair, in the context of the overall objectives of the organisation and its expected destination. This should not be about personal wins. Mediation or compromise should be about both parties winning, not the strong overcoming the weak which is often seen in traditional mediation. In each mediation, I employ the following same principles: Mediation requires a SMART overall objective I determine the overall SMART objective. Something, I can visualize and touch. Something that makes both parties stronger and win. This is the utmost important part of any mediation. Weak or no objectives, results in outcomes that are weak and at times unfair. Empathy is the ingredient to success I place myself in each parties’ shoes and explore the pressure points. Having empathy is the key ingredient for building trust. Empathy should be the starting point for any mediation. One must see wood from the trees Once the pressure points are identified, I iron them out against the overall objective. It is at this stage; I separate out the noise and the wood from the trees. Baggage needs offloading People carry baggage that they need help with offloading People carry baggage that they need help with offloading. Sacrifices and compromises must always be for a bigger objective and cause. I make an effort to identify and offload this baggage which is often built up over a longer period based on personal experiences and perceptions. Often brushed under the carpet and ignored – never dealt with and it becomes the monster that stops common sense to prevail. Once I am left with the genuine concerns and risks, I build bespoke solutions, based on my professional judgments and experiences – Again, against the overall objectives of the mediation. Closure needs work The mediation is then “closed” by all parties agreeing to “my solution”. By this time, I have earned the trust, strong emotions are ironed out and the focus for both parties is on the “win win” solution. The details are agreed and then signed off. All the above is accompanied and peppered with hard work, difficult discussions, listening, patience, moments of quiet meditations and a hard resolve from me with no compromise. Mediation is most relevant at the top People in positions of responsibility often end up carrying lot of baggage – this builds up over time, much depends on them being able to work effectively with each other. This is not always possible, and this inability of being able to work together often risks bringing the whole building down with years of “building” and “achievements” to a dramatic loss. This is where mediation then becomes that tool that can put the train back on its track. Mediation is not about making people love and hug each other – its about achieving objectives and making sure the train gets to its destination. Mediation is not about making people love and hug each other – its about achieving objectives and making sure the train gets to its destination. End – Author: Nasir Rafiq is a widely experienced Fellow Chartered Accountant (ICAEW) and a Charity Financial Governance Expert. He is the Managing Partner of Dua Governance, a Charity Governance specialist accountancy firm. Nasir has held many senior finance positions within the UK charity sector and continues to advise many charities on governance and leadership matters. Email: info@duagovernance.com

July 30, 2022 No Comments

Blogs

Important Lessons from Strawberry Picking

Strawberry picking is a fun day out for all ages. This outdoor activity has it all, sweet fresh berries, a walking exercise and a family fun activity of picking various fruits from their plants. In this innocent activity, one can also “pick” many lessons for individuals and organisations. As I walked through the various fruit lines, I started to pick many of these lessons and came across the following four valuable lessons: Lesson 1: Sweet fruits are on branches that hang down Branches full of fruit are the ones that hang down with the weight of their fruits. This is also true in real life. Individuals that are humble and flexible are the ones that attract people and affection like that branch full of fruits. Individuals and leaders that are arrogant and inflexible tend to find themselves like those branches pointing in the air with no fruit – nobody likes them or entertains them. Its not the branch that matters but the fruit on it – In real life we forget this. It’s not the person but the personality and personal conduct matters. It’s not the person but the personality and personal conduct matters – both define qualities the person and make it so that people benefit. Lesson 2: Size, colour, and design does not matter Many strawberry farms, also grow many other berries as well. From strawberries to raspberries and blueberries. Each berry is different in size, colour, plant, and taste. When ripe and juicy each of them energises the taste buds and gives immense pleasure. The key word here is “ripe” and “ready to eat”. In real life we focus too much on size, colour, ethnicity, and political affiliations, like the farm the world is full of variety – what should matter is maximising the ability and impact of individuals and organisations. When ready the fruit will taste the best on their own plant – it’s wrong to expect the blueberry to grow and taste good on a strawberry plant or vice versa. Like plants, individuals are at their best in their own environment and identity – this should be respected, celebrated, and protected for them to “ripe” and excel. Like plants, individuals are at their best in their own environment and identity – this should be respected, celebrated, and protected for them to “ripe” and excel in all walks of life and organisations. Where this is ignored, it’s the organisations and leaders that lose out from the potential talent and resource those individuals could have offered. Lesson 3: It’s the picking that dictates the quality of the basket The fun in strawberry picking comes with holding the basket and picking the fruit into it. The thousands of plants have thousands of fruits hanging on them at different stages of their life, some ripe and some not as ready. They hang in groups and on different branches. Depending on their position on the plant and branch – they can taste different, sweet, or bitter. It is how and when they are picked determines, the quality of the fruit in the basket. A farm full of fruit that looks unripe may still generate a basket with ripe and colourful tasting fruit. This requires effort and time for the picker to dig deep in finding the ripe fruit. Organisations that have good quality staff have impeccable recruitment practices – they reach out and plan carefully to find and retain the right talent. These organisations then stand out and achieve their objectives – It is then the basket of fruit gives the right pleasure and visuals. Those that go on a “picking” spree influenced by numbers and digits (nothing more) tend to end up with the wrong mix of fruits in their basket. Those that go on a “picking” spree influenced by numbers and digits (nothing more) tend to end up with the wrong mix of fruits in their basket. The basket will eventually cost them at the counter and the fruit will be of no use, leaving a bitter taste. I see this often in organisations, especially charities. Lesson 4: Season and gardening make the difference As we are walking out of the farm, we came across some berries out of season – their plants were fruitless and resembled wild bushes with no use. We were so wrong. Given the right season, care and effort the farmers will put into them, they are to taste better than the sweet berries in season we were tasting today. In real life, the same mistake is made with individuals and organisations. We are trigger happy to right them off not realising that we may be meeting them in the wrong season or all they require is care and effort to blossom. Instead of waiting for the right season or investing in care and training, we judge them and leave them with wrong labels. Hence losing out from the ability and impact they could have shown. Like sweets berries, individuals and organisations require the right environment, care, training, mentoring and guidance to grow and bear fruits for many to enjoy. End – Author: Nasir Rafiq is a widely experienced Fellow Chartered Accountant (ICAEW) and a Charity Financial Governance Expert. He is the Managing Partner of Dua Governance, a Charity Governance specialist accountancy firm. Nasir has held many senior finance positions within the UK charity sector and continues to advise many charities on governance and leadership matters. Email: info@duagovernance.com Website: www.duagovernance.com

July 24, 2022 No Comments

Blogs

The question of control

Trustees often battle with this question with different answers and approaches. Often conflicts between trustees and management are underpinned by this predicament. Charities are set up by humans and run by humans. The mistake is made when the human factor is ignored. The answer to the question of control lies in how humans normally behave and respond. When a child is born and throughout the toddler years, parents feed, clothe, hold their hands and constantly check on them. When the same child grows up, becomes an adult and starts university the approach of the parents changes. There is no need to directly feed, clothe or hold hands. The parents approach changes to now ensuring enough money is in the bank account, direction is set, good university is secured with appropriate accommodation. The constant physical checks turn into keeping an eye on academic results, who the friends are and quality of work experience and references. Same child, same parents, same love but the whole approach changes. If the approach does not change and the parents remain like they were when the child was a baby or teenager then relationships between parent and child risk becoming sour, challenged and damaged. Charities are the same. When they are set up, they need full attention and involvement of the Trustees, however when they grow large, the whole approach must change. When it does not, this results in relationship between trustees and management to suffer and eventually breakdown. Like the parents learning from other parents before them, trustees must also learn and apply successful experiences of other trustees and charities. Below are some techniques that have always worked. Reconciling bank statements to information held by the charity This should never be underestimated. Tidying up book keeping, preparing good quality year end accounts and picking up fraud, all depends on it. This applies to Charites of all sizes and complexities. Banks are third party organisations and they hold information in a certain way reflecting the instructions from the charity trustees and / or management. When the bank information is reconciled against information held by the charity which reflects how the charity is run, this has an effect of a third party check over charity finances. This is why a charity with good financial control will always have an effective bank reconciliation process. Trustees should concern themselves about it as it aids control. Checks and balances on the CEO A charity with a paid CEO / Manager suggests the charity has grown and requires a different approach. Hand holding by trustees and constant checks should no longer be the case. If this is the case then there is something wrong with either the trustees and / or the CEO. The following are five key checks and balances that have proven to work in larger charities: 1. A robust strategic plan and budget that sets out the framework for the CEO to operate within. Without it, a blind ends up leading a blind, creating issues of trust when difficult decisions need to be taken. 2. A CEO reporting and feedback protocol against the agreed strategy and budgets. The reporting skill of a CEO should be assessed at recruitment stage. 3. A competent legal and audit firm that regularly meets trustees and comments on Management decisions and plans. Trustees should make time for such professionals and should take their advice seriously no matter how difficult it may be to accept. 4. Fair and clear HR policies that dictate how human resource is managed with no trustee or management override. HR issues are often bubbling in the background, if not sorted with good policies and their application, then these bubble burst with ugly consequences. 5. An Audit Committee supported by a professional Internal Audit function. Its not enough to have independent members of the Audit Committee if it is not supported by an competent Internal Audit function. The key message is that Trustees can remain the same in a charity but the approach must change as the charity grows and enters new challenges. Author: Nasir Rafiq is a widely experienced Chartered Accountant and a Financial Governance Expert. He has directed large finance, HR, facilities and IT functions in charities. He is the founder and director of Dua Governance, a charity finance specialist accountancy and business advisory firm.

July 17, 2022 No Comments

Blogs

Charity Leaders: Why personal conduct matters

The charity sector represents public benefit. Leaders of charity offices often preside over limited resources in the context of the job required of them. They also take decisions on donor funds and their decisions can have a far-reaching impact on the people that work in charities and / or the beneficiaries. Staff may be asked to sacrifice for the greater good, for beneficiaries sometimes this can be a matter of life and death or economic survival. Charity leaders must be able to lead an effective team; their success depends on it. Charity leaders must be able to lead an effective team; their success depends on it. In doing so leaders often have to take difficult decisions to bring the best out of them. The team must be able to trust and respect the leader. Leaders can train future leaders only when their followers can see them as role models and mentors. In this context the personal conduct of a leader especially in the charity matters. It becomes the difference between success and failure. A leader may move mountains, people and followers will forget that – however the conduct on how those mountains were moved is what becomes the legacy of that leader. It’s the personal conduct that touches people and followers and becomes part of the human memory and emotional history of the leader. Below are some common leadership characteristics and conducts that I have experienced in the charity sector that are proven to make a difference: Trust requires building People and followers must be able to trust their leader. It is only through the trusting, it becomes easier for the people, followers and teams to sacrifice and backdown at their personal cost. Trust is created by being able to follow through on promises without compromise. Trust must be earned and does not automatically come with positions – The leader can build it or break it. Trust must be earned and does not automatically come with positions – The leader can build it or break it. Trust is built by being transparent in public and private communications. Consultations promote trust especially when the followers / team members know that they will be consulted – this builds trust within the team. Trust grows in humility by accepting mistakes when they are made, and all leaders make them. All this requires consistency and patience by the leader. Fairness come what may Leaders enjoy powers entrusted to them over those that follow them. How they use these powers for the greater good of the office they represent identifies their conduct. Those leaders that don’t compromise on fairness tend to be more powerful and effective than those that compromise to benefit family, friends, or personal business interests – A leader may have favorites on a personal level – this must not skew the balance of fairness in the organisation. Nepotism eats personal conduct like termites eating wood Nepotism eats personal conduct like termites eating wood. One the face of it the wood has structure, the termites eat it from within. The wood sound then becomes hollow when tapped, just like the leaders that constantly compromise on principles over nepotism. When these leaders are tested, their teams abandon them over their hollow rhetoric. Being fair and more importantly the perception of being fair (as important) is a crucial conduct that effective leaders often display. This requires the leader to stick to policy and process and become a role model in doing so. Justice is not for the weak Humans are not angels – they make mistakes or do wrong. Teams and followers are not immune from it. An effective leader when confronted with wrong, deals with it. As not dealing with it promotes it, grows it, spreads it – there is always a limit on how much dust can be swept under the carpet. Whenever (and it will) the carpet is removed, all is laid bare, and it is then reflected on the conduct of the leader. Justice has its value when it can be felt and seen. This sets the standards and creates an environment where mistakes and wrongs are less made and discouraged. It becomes the moral compass for leaders and their followers / teams – with this compass they cannot go astray. Being just becomes the moral compass for leaders and their followers / teams – with this compass they cannot go astray. The good practice that is practiced Leaders that tend to take personal conduct seriously, often lead organisations with: effective HR and operational policy and processes that are followed, good and consistent performance management processes, effective organisational structures that achieve good quality consultation and accountability, fair and effective recruitment policy and processes – the right person the right job, a skillful rotating board that appoints the leader on merit and holds the leader accountable. End – Author: Nasir Rafiq is former Interim Finance & Corporate Services Director of Islamic Relief Worldwide (2016-2019). He has held many senior finance positions within the UK charity sector and continues to advise many charities on governance and leadership matters. Nasir is the Managing Partner of Dua Governance Chartered Accountants and Business Advisors. A firm specialising in the charity sector. He is a widely experienced Fellow Chartered Accountant (ICAEW) and a Charity Financial Governance Expert. Email: info@duagovernance.com

July 12, 2022 No Comments

Uncategorized

Dua Financial Standards for (all size) Charities

During the past decade the number of Muslim charities raising funds has increased. Smaller charities have become large and larger charities have become more complex. As the size and reach of charities increases, the need for better and robust financial governance significantly increases. It is only through this, donor monies can be protected and spent properly on charity projects the donors intended for. In addition to donors, the banks and the Charity Commission take financial governance and anti-money laundering risks very seriously as well. When things go wrong, interventions from both can have an effect of impairing charity operations significantly. Charity Commission interventions have sanctioned Trustees and CEOs and when Banks feel unfordable with financial governance they have closed bank accounts and / or stopped bank transfers to vital operations. What does good financial governance look like in a small or large charity? – this is where wrong questions can result in wrong answers – Trustees, managers and donors sometime fall prey to this. What does good financial governance look like in a small or large charity – this is where wrong questions can result in wrong answers – Trustees, Managers and Donors sometime fall for this. Low or no overheads does not mean good financial governance and neither does a good marketing pictorial report on beneficiaries nor a slick emotional video shown by a fundraiser. Donors have the right to ask questions as it is donor money at the end of the that becomes management salaries, admin costs and relief to beneficiaries. However, these questions must be the right ones to ensure charities prepare the right answers. The Dua Financial Governance Standards do exactly that – they provide a comprehensive and meaningful framework for the right questions and for charities a relevant standard through which they can demonstrate their governance. The Dua Financial Governance Standards does that – provides a comprehensive and meaningful framework for the right questions and for charities a relevant standard through which they can demonstrate their governance. There is lots of guidance already available online – the problem with much of this guidance is the lack of knowledge and experience how they should be applied. Not one size fits all. These various guides are often not tailored to the size or the charity risks. They often have an effect of identifying gaps the charity already knew existed. Dua Standards The Dua Standards helps charities demonstrate responsibility, create trust and transparency, and reduces risk of fraud, error & inefficiency. The standards focus on four clear outcomes: The Trustees are adequately involved and accountable. High level financial controls are in place. The staff and skill dealing with finance are suitable The charitable spend including Zakat spend is adequately controlled The outcomes are matched to a total of 18 criteria tailored to four different income sizes of charities. This ensures the standards remain relevant to income size and underlying risks of the charity. Approach The approach to assessing compliance to the standard is designed to also produce / recommend credible action plans where gaps are noted. These action plans help those charged with governance to steer the management and charity in the right direction. The result is an improved and enhanced financial governance that protects donor monies and makes the monies reach and travel further for the charity beneficiaries worldwide. Next steps Email the team at Dua Governance info@duagovernance.com for further information and timings for an independent professional review. This will include a certification with a credible action plan for any gaps identified.

May 29, 2022 No Comments

Blogs

The Nightmare of Reporting

As I woke up one day, the strangest event had occurred. Suddenly and permanently the requirement to report audited financials had been lifted and no longer required. Just like that, no more annual accounting protocols, costs, or deadlines, no regulators, no fines and no shaming in red. As I switched on the TV news, there was chaos all over the world. The Stock markets had crashed as investors were pulling out. Investments had been made based on guesstimates and bias representations from companies that did not materialise. Safe businesses were suffering huge losses and companies were running out of cash and being forced to close. As legal disputes between shareholders and company managements were being drawn up by expensive lawyers, masses were being made redundant and risked losing their homes and livelihoods. The Government was up in arms as suddenly there was a huge hole in their coffers as many companies understated their results for tax purposes. Hence, the public finances took a hit with many hospitals and schools now risked facing closure. I frantically went online to assess the situation in the charity sector and was taken back by the result. Although there was no shareholding or profit making, the impact was equally severe. Many Institutional funders pulled out from funding charities to implement their projects. These charities had failed to pass the minimum due diligence that came with annual audited accounts. As charities pitched for funding, they overstated their ability to deliver and ended up wasting and losing funds meant for beneficiaries in dire need. The public trust on charities took a hit as there no longer was a credible mechanism to assess if these charities kept their accounts in proper order and if their accounts were true and fair. What shocked me the most was the sudden holes in the finances that many charities were reporting. As if cash had disappeared. I had considered these charities to be strong in financial governance. These charities were now facing significant error or fraud in their accounts and there was no easy answer as there was no reference to an independent professional check. Consequently, many Trustees and CEO’s were removed from their positions in disgrace. The World had ended up in chaos and it seemed no one was left immune, the rich and poor were equally and adversely impacted. All organisations were paying the price of this catastrophic change in the World. As my confusion and shock peaked, I felt a tap on my head, and it was my wife waking me up for the morning prayer. She was waking me up from this never-ending nightmare. As I sat on my prayer mat after my prayer, it dawned on me how important the annual financial reporting process is to the current World order and trust when dealing with finances. Organisations that take the annual financial reporting seriously not only fulfil a regulatory need they contribute to today’s World order and transparency. I also learnt that preparing and compiling year end accounts process not only fulfils external reporting needs, it also has an effect of providing assurances internally that the accounts are free from any material misstatement, error or fraud. Humans make mistakes and are susceptible to greed or quick wins. If gone unchecked this can accumulate significant harm in finances in the short and the long run. The role of external scrutiny of the accounts is to keep this in check and have a credible reference for internal and external stakeholders. The external reporting process is important to financial governance and therefore requires priority, investment, and attention by those charged with governance of their organisations. They can either treat it as a box ticking exercise or an exercise that keeps their nightmares at bay. End – Author: Nasir Rafiq BA FCA is a widely experienced Finance Professional and Governance Expert. He works with business and charity organisations of all sizes and complexities. Nasir is the Founder Director of Dua Governance Chartered Accountants and Business Advisors. A firm that specialises on governance advisory services to the charity and business sector

February 20, 2022 No Comments

Blogs

Charities and Banks – A difficult relationship

Banks are the most important stakeholder for charities with international operations. The relief they provide saves lives and protects dignity of beneficiaries in the most remote and desperate places worldwide. However, they can do this properly only when the banks allow them to do so. The role of banks is often misunderstood – is it a regulator? is it an evil business? is it a money transfer agent? or is it a government spy? The answer is No, it can be all of that and more. The role of banks is often misunderstood – is it a regulator? is it an evil business? is it a money transfer agent? or is it a government spy? The answer is No, it can be all of that and more. Banks are private or public limited businesses and have all the pressures a business has – Yes, they can go bust and as we saw during the 1990s banking crisis, size did not matter. The failed banks had an effect of destroying livelihoods and dreams of many. We live in a digital world; no activity be it a noble or a criminal can exist without it. ALL use banks and the banks then suddenly become the conduits in promoting the good and the bad – this is where the government regulation comes in, mainly aimed at stopping the bad as defined by the government and backed by hefty penalty regimes and licenses. To stop the bad and to avoid penalties, the banks adjust their business practices. Each bank will have its own risk appetite, and this will dictate how they manage their customers, be it a business or a charity. International charities can be a risky business for banks as they can and have been used to launder money to fund terrorist activities, evade taxes and used to hide personal wealth. International charities can be a risky business for banks as they can and have been used to launder money to fund terrorist activities, evade taxes and used to hide personal wealth. Banks design their systems to pick up the bad and money laundering – these systems are often sophisticated and based on artificial intelligence (AI) reflecting decades of banking transactional behavior. To ensure business and commercial conflicts are managed by banks, many banks have in recent years centralised their anti money laundering checks and related decision making. As a consequence, local bank managers and relationship managers no longer have a say or control like they had in the past. International money routes Another layer of complication for international charities is the international nature of bank transfers. In between the charity’s own bank and the bank receiving funds in another country, there are different intermediary banks subject to different regulatory regimes. Each banking side (i.e. sending and receiving) does not necessarily control the banks in between. International transfers are only made possible when the intermediary banks allow them. To understand this point, staying within your own country, we don’t need visa or custom and bag checks, however travelling outside the country, we are subject to all sorts of checks and regulations and depending on what passport you hold, your treatment will differ. This is also the case with international bank transfers, like roads and flight paths there are various international money transfer routes with different intermediary banks in between. Each route is subject to its own compliance regime, regulator and political sanction regime. It is in this context of money laundering risks, international charities can struggle to open a bank account, transfer money internationally or in extreme cases have their accounts closed (de-risked) with no recourse or remedy. I see this too often. In my opinion, this necessarily is not because of a personal, an anti-charity or an anti faith agenda by the banks. It’s often a simple matter of compliance to anti-money laundering rules set by regulators and political governments. Know Your Clients (KYC) Banks need to update their systems with KYC (Know Your Client) details and below are the three main questions that they need to answer for money coming in and going out the banks: Who is donating to the charity? Does the charity itself know and make checks to ensure this is not dirty money? Who is the money transferred to? Is the bank account receiving money owned and controlled by a locally registered charity that has the permission to receive the monies by the local government or regulator? The money that is being transferred to a country, project or beneficiary – are there any sanction implications? Once the money is in the banking system and transferred abroad, the bank becomes a facilitator, so they need to know and be satisfied that these questions can be answered. Many times, charities fail to understand the importance of these questions and often lack the policies, systems and processes that can help them answer the banking concerns. In the banking world, the banks do not wait for charities to develop their system, they expect them to have all the answers before any money is put into the banking system – Banks are businesses and take a business approach to due diligence and anti-money laundering checks. If the bank feels the charity business is more risk than benefit in commercial terms, then it will simply fail the transactions or de-risk the charity. Banks are not obliged to give their custom to charities. The impact of the pandemic – worst for charities The pandemic has had the effect of escalating the move to a cashless economy. Government Covid19 grants required businesses to have bank accounts, many small businesses did not. All this created a significant backlog in banks for business accounts. With staff shortages, working from home, closed bank branches and fewer staff, this all together has compounded the issue for charities specifically. Unfortunately, it seems the banks have put charities

February 12, 2022 No Comments

Blogs

Lets take a risk

Things can go wrong in many of the most well run organisations. As humans this shows our imperfections and limitations. In modern times and especially in the West as management sciences developed, “how to manage risks” became one of the main tools for planning and good governance in organisations. This is why some of the best governed organisations have the best “risk management” in place. One thing is clear taking risk is not an issue, many successful businesses, organisations and people took risks that brought them success they then enjoyed. Its how this risk was managed helped to keep their heads above the water and avoid the real and present circling sharks. Another important aspect of risk management is that all risks cannot necessarily be managed to a point where they cant materialise. Even when they are best managed, they can still occur. Only difference being that good management of them means, the organisation is better placed to weather the storm when it comes. This may not be the case without managing them. Trained in Big 4 accountancy firms in risk management, I had the opportunity to audit risk management in local government, housing associations, central government agencies and education sector. After leaving the Big 4, I moved to a FTSE giant where as a senior Internal auditor, I reviewed risk registers of EMEA region countries and led risk workshops of complex large businesses, such as the North Sea business. As I now work in the charity sector, strengthening good governance in organisations, disseminating my professional learning, I am pleased to see many INGOs recognising the need to manage risks. Be it very much behind the government and corporate sector for various reasons, they try to punch above their weight. In dealing with risk management in the charity sector, especially the INGO sector, I have the following observations: Where do risks come from I too often see a misunderstanding of “relevant” risks. Organisations too often led by academics and theory or with the desire of simply copying “others” often fall in this trap. Identifying risk becomes, a tick box exercise and most of the time risks end up outwardly looking, ignoring the internal and external needs of organisations. Risks become very much focused on weaknesses and threats, ignoring strengths and opportunities. As I mentioned above sometimes organisations need to be bold to succeed. This may require taking risks. Every organisation like humans can be different from each other. How the organisation was formed, the recruitment, HR practices, type of CEO and trustees, ethos, stakeholders, business relationships, contracts and brands, can make organisations unique. The associated risks should reflect this. The controlling of risks In risk registers, I see listing of controls against risks and then a sense of content from organisations that the box is ticked and risk is managed. This is not risk management instead this can turn into a false sense of security. The process of matching risks with controls requires a robust assessment of the controls. This should lead to identifying gaps with meaningful action plans. An effective risk management process leads to more work, more strengthening, more investment, more focus and more hunger to succeed. This cannot be just a tick box. The INGO sector has a long way to go. Being able to manage risks, can mean a difference of life and death, a full belly or an empty belly for the beneficiaries of INGOs. The funds raised can travel further in meeting objectives that the most vulnerable depend on. In all this, my work with INGOs continues. Nasir Rafiq is a financial governance expert and the founding director of Dua Governance Chartered Accountants, specialising in the charity sector and internal audit.

January 2, 2022 No Comments

Blogs

Succession – When is the best time to let go

Its hard to let go when you have grown an organisation, be it a business or a charity with personal sacrifice, commitment and / or investment Sometimes this question leads to breakdown of relationships, disagreements and even legal fights or regulatory action. Humans are mere mortals, and this question always hangs over every Leader, Founder and Owner. This question can be answered in many ways successfully and sometimes unfortunately by force. In my professional capacity, I have worked to answer this question in the business and charity sectors. My starting position has always been to question and understand the motive of the question as the answers lies therein. Succession should be about success of the business or charity Succession must always lead to success – this is when it becomes utmost important to define what that “success” actually looks like. Does success mean becoming a bigger business or profitable one? Is it about becoming a larger charity or better governed one? Is it about changing the way the organisation is run or just about retiring and passing the mantle? In defining the parameters of success, the timing matters as it focuses the minds and rewards. When the question of “succession” is considered without working out the question of “success”, it risks leading to the wrong answer. Not all business successes require successions. And if not careful, unnecessary successions can lead to disasters and failures due to losing history, commitment, and profile of the leader internally and externally. Artificial term times don’t always work, especially when copy / pasted from other organisations. What success looks like may even require other solutions other than succession. For example, advisors / new positions under the leader, more delegation or just good and better business planning or resources. However, when the succession discussion is underpinned by the need of a clearly identifiable success then difficult discussions become easier to digest and problems turn the mind to “win-win” solutions. Succession planning becomes meaningful and desirable. Good strong successors don’t grow on trees In a family business or a family / friend run charity, the perceptions of control can dominate the succession discussion over the need for real organisational success. Not all seats on the board table mean control – the wrong successor can compromise success – without the real success, control means nothing. However once succession is on the cards, finding the right successor can become an impossible task. The identified success parameters should determine the type of successor required – Leaders don’t grow on trees and may not be just plucked out of thin air. Promoting an amateur and / or choosing an untried hand can be a risky affair – this is why a timely succession planning is always a cornerstone of good governance. Below are some examples of how succession planning works in good governed organisations: Delegation nourishes leadership. This can be achieved in a controlled and a phased manner. The delegation matrix should be meaningful and there should be succession planning thought behind it – This should not just be a HR tool to use when things go wrong. Input leads to outputs. Every great leader started from a junior position and worked their way up. Never underestimate a good effective recruitment strategy at junior grades. These are the stones that can be carved into eye-catching statues of tomorrow. Graduate recruitment of great corporates is designed with this in mind. Mentoring should not be accidently achieved – it should be planned. This is a fruit that can be produced through an effective HR function and through good performance management protocols. Effective leaders budget their time for mentoring – these are the seeds that can grow into the trees of tomorrow. Nepotism can be costly. It comes at the cost of achieving real success. It suppresses real leadership and opportunity. Organisations that keep nepotism in check make succession planning work effectively. These are the organisations that are designed to succeed in their organisational objectives. Those that don’t, lose in the long run. End – Author: Nasir Rafiq BA FCA is a widely experienced Finance Professional and Governance Expert. He works with organisations of all sizes and complexities. Nasir is the Founder Director of Dua Governance Chartered Accountants and Business Advisors. A firm that specialises on governance advisory services to the charity sector.

January 1, 2022 No Comments

Blogs

When assumptions don’t work

Those that run organisations are expected to make decisions. These can be trivial and some with significant long-term impacts. They are often presented with scenarios where they are required to make decisions for the betterment of their organisations. These decisions could relate to appointments, procurements, ending or starting partnerships, strategic direction or related to communications. How these decisions are taken determines how risk is managed and disasters averted within an organisation. Bad decisions can indicate Bad governance. The quality of decision is based on the quality of the source. Is it based on assumptions or assurances? The difference between both is crucial and can be explained by how a surgeon conducts surgery. A surgeon when conducting lifesaving surgery must also make decisions. How these decisions are made gives us a glimpse on how assumptions can differ from assurances. A surgeon regardless of his skill and experiences must rely on assurances provided by test results, machine sounds, camera, touch, tools and importantly opinion of other professionals. The more complicated the surgery, the more assurance is needed. This is how risk is managed. All these together give the experienced surgeon assurances on how much risk he/she can take and/or if the surgery is on track. Just imagine, if the surgeon decides to ignore all and just uses “assumptions” based on past experiences or what he/she may have heard or read from elsewhere to conduct the complex and life-saving surgery. One can imagine, this surgeon is playing with life and risking death on the table. The more experienced the surgeon, the keener he/she will be on relying on assurances from data, test results, tools, and opinion of other professionals. This is not about being weak or being undermined. This is about quality of professional decision making to save lives. Those that run organisations can learn from this example. Those charged with governance that rely on assurances tend to get it right compared to those that rely on assumptions and hearsay. Personal experiences of founders and leaders can be important but also dangerous when ignored over other means of assurances when making important decisions. The larger the organisation, the more need for robust assurance mechanisms. Below are some examples of assurances that can be used in decision making context: Comparing and Contrasting is a skill that leaders must have Management regularly reports to their Boards. The Board members in their positions should have the ability to compare and contrast that information with other sources of information. Sometimes these alternative sources must be created for this purpose. For example: Does the reported finance information agree back to independently audited accounts? Does the HR report agree back to staff surveys or outcomes of tribunal cases / HR compliant investigations? Does the operations reporting agree back to independent evaluations and client / beneficiary feedback surveys? Is the Management submission on a matter supported by robust legal and finance advice? Do Management individually report to the Board and are these position holders consistent in their representations? Is there an independent and competent Internal Audit function that provides a robust professional assurance to the Board on ALL aspects of the organisation? If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur Professionals can be individuals or firms. A good widely experienced professional can provide an independent assessment beyond the organisation’s internal politics and embedded assumptions. Home truths from independent professionals can do wonders for cleaning up an organisation. Those leaders that surround themselves with “Yes Men” tend to fall in their own dug holes as they miss them when they eventually appear. Good Governance is about how organisations are run in achieving their objectives. Decision making is part of this. It therefore matters how these decisions are made using assumptions or assurances. End – Author: Nasir Rafiq is the Founder and Director of Dua Governance Chartered Accountants and Business Advisors, a firm specialising on financial governance. Nasir is a widely experienced Fellow Chartered Accountant (ICAEW) and a Charity Financial Governance Expert. Email: info@duagovernance.com

December 27, 2021 No Comments

Blogs

Islamic Finance, Mosques & Charities – the Missed Opportunity

This blog represents the well received presentation by the author, he gave as a guest at the launch of the Birmingham City University’s UK’s first Islamic Finance undergraduate degree course. Islamic Finance has become a multi-billion dollar industry and is fast growing. Despite this growth and reach, this industry has had little to offer Mosques, charities and for the wider uplifting of the state and economies of disadvantaged Muslim societies worldwide. Islamic Finance has worked to make wealthy Muslims wealthier by helping them avoid the guilt that comes with breaching shariah guidelines – Although there is nothing wrong with that, in my opinion Islamic Finance has a bigger role to play in promoting the finances and impact of Mosques and charities, especially in the UK context. Islamic Finance is a component of the Islamic Economic system which aims to create a fairer and just society in which hard work is rewarded, those that are at disadvantage are supported, business and entrepreneurship is promoted, and infrastructure is built that benefits all – Mosques and charities play an equally important role in achieving these objectives. In UK, the top 20 International Muslim charities raise around £400m with around £100m raised in Ramadan alone (see blog). In total when combined, the UK Muslim charity sector can be estimated to be raising around £500m each year. This is despite it being a relatively young sector (only 30 years +) but a fast-growing sector. Mosques are built using Qard-e-Hasan financing The majority of Mosques in UK are successfully built using Qard-e-Hasan, interest free community loans, and this is also the case when they extend their facilities. There is no Islamic Finance solution in UK that provides this interest free facility to Mosques in spite of the underpinning strong business model of Mosques. Each Mosque has a ever growing number of worshippers and donors. They are engaged in a never-ending cycle of Friday prayers and Ramadan worship, during which funds are raised to return the loans. Mosques are the heart of Muslim community – this is where everything starts from (i.e. marriages), sustains (i.e. prayers and education) and ends (i.e. funerals) – promoting them should be the first priority of the Islamic Finance sector. Islamic loans for buildings and ICT systems The UK Muslim INGOs have seen a significant growth in their income. With this growth, a time comes to upscale the back-office facilities and the ICT systems – this is crucial for good governance. Some of these required investments are significant and can’t be covered by the general funds raised in one year and therefore the financing solution makes business sense. Despite the fact that these charities have stable income and have the ability to payback loans, there are no interest free solutions available to them. The existing solutions are too focused on private and commercial initiatives. Ultimately the beneficiaries suffering in the most remote parts of the world pay the price for the inefficiencies and weak governance caused by this lack of investment. Foreign exchange (forex) costs with no hedging solutions UK Muslim charities transfer around £250m each year worldwide to support beneficiaries. Sometimes the transferred currency has to exchanged up to three times before it reaches the beneficiaries. This poses a significant cost on the charity finances. Unlike the mainstream non-Muslim charities where they have hedging products available to mitigate their forex costs, the UK Muslim charities have none. Surplus cash – nowhere to go In 2020, I analysed the accounts of the top 20 Muslim charities and noted that they held around £107m in cash balances (see blog). UK Muslim charities raise around 40% of their annual income in the month of Ramadan. This is then spent through out the year based on the need and ability to deliver. The business model of the UK International Muslim charities is such that there will always be surplus cash held by them. It is unfortunate that there are lack of suitable Islamic Finance short term investment / finance solutions in place that can provide low risk returns and at the same time provide benefit to the UK community. Islamic Finance products – Sustainable relief of poverty The UK Muslim sector often lacks the required focus and priority on activities that are at the heart of sustainability and capacity building for the long term relief and impact in UK and worldwide. The nature of these activities requires Islamic Finance input and initiative. For example: a) Micro Finance – building capacity and self-reliance These are small interest free loans to the poor and disadvantaged individuals for business and self-reliance. Micro finance projects are carried out by some household UK Muslim charities worldwide but not on the scale needed and required on the ground – partly because this is not popular with UK fundraisers and also due to local registration restrictions. However, In my opinion this activity has a significant potential in UK where a significant number of unemployed or disadvantaged youth and old can benefit. For this to work, an Islamic Finance approach is needed where businesses, professionals, charities, and government agencies need to partner and devise solutions. b) Endowments (Waqf) – investment in the future Waqf has historically been at the heart of Muslim charity with its long-term benefits in this world and in the hereafter. However, this approach is often ignored by donors over activities that provide benefit today (i.e. food projects) and also by charities due to their lack of ability to deliver such projects – these projects could be investments in self-sustaining buildings, infrastructure and businesses. Endowments are investments and although are a charitable product, there delivery is no different from any commercial endeavor. This requires the right and experienced business and commercial skill, hence endowments projects to succeed have to be large in scale so that they can afford the required delivery cost efficiently and

December 3, 2021 No Comments

Blogs

Reading between the lines – Human Appeal Inquiry

The Charity Commission on the 28th October 2021 published its decision of its 3 ½ year long inquiry into Human Appeal. This was a comprehensive investigation that has had a profound impact on the charity itself and some of the individuals involved. This decision has caught my attention as I feel it has some important governance learning for the wider Muslim charity sector, especially charities with international operations. In 2019, I analysed the accounts of 20 of the largest international relief charities. I found collectively, they raised £350m in UK of which around £80m was raised alone in Ramadan. Hence, there is a lot at stake, and it is imperative that charities learn lessons from such Inquiries. Background to Human Appeal Inquiry On 18th April 2019, the Commission opened a statutory inquiry (a serious inquiry) into Human Appeal. The inquiry focused on how Human Appeal trustees conducted themselves in relation to their duties, decision making, due diligence and financial controls. At the time the Inquiry opened, the charity was of a significant size with an income of £36m, operations in 24 countries and over 100 full-time staff including six directors and a CEO. My reading of the Inquiry report The Commission report is a valuable read and trustees of all Muslim charities should read and understand the findings in this report, as much of it, is relevant to all International NGOs. I will set out my observations below, reading between the lines. The Trustees can’t wash their hands off overall responsibility In large charities, trustees employ the executive and delegate responsibilities to them. This does not mean trustees have no responsibility and when something goes wrong, the trustees can simply blame the CEO and get away with it. The Inquiry concluded that there had been misconduct and/or mismanagement in the administration of the charity by its then Trustees and identified that a significant factor in the misconduct and/or mismanagement was insufficient oversight of the charity’s executive by the then Trustees. Steve Roake, Head of Compliance Visits and Inspections at the Charity Commission, said “While trustees of larger charities will delegate certain tasks to staff members, we and the law are clear that trustees retain ultimate responsibility for running their charity. and our guidance is clear that trustees must ensure that robust reporting procedures are in place. Responsibility for ensuring they have sufficient information and are adequately informed to make decisions rests with the charity trustees”. It should be noted that in the detailed report, the Commission did not single out the CEO for misconduct, never mind gross misconduct. Ignorance of Trustee(s) is not a defence The Commission report states that part of a trustee’s role is to review proposals and challenge assumptions critically and objectively in making decisions. No one should be able to direct the trustees or drive decisions through without sufficient consideration. Trustees who simply defer to the opinions and decisions of others aren’t fulfilling their duties. In large charities (especially), it is imperative that formal systems and process are in place that provide scrutiny over Executive decision making – this does not mean, the Executive are deprived of decision making – This is one bicycle that requires both tyres to run in sync for good governance. Trustees approve the strategy and budget. The Executive run the charity and provide timely and robust feedback to Trustees so that they are adequately and collectively assured and informed. It is insufficient for the CEO to rely on informal relationships with the Chair of Trustees or a small of group of trustees. It is not enough for due diligence to be done by management; Trustees must have systems in place that can adequately assure them that due diligence is actually done Often when asked, trustees assume due diligence of donors and partners is done by management because they are paid to do it. When public funds and donor monies are involved, this is not sufficient or a responsible answer by any standard. There is a stark difference between assumption and assurance. When someone else’s money is involved which is the case with donor monies in charities, trustees should not be relying on assumptions and mere alone representations from the executive. A system of internal control, policy and independent assurance on their effectiveness is something that should be in place as a standard in large charities. The Muslim charities are often lacking in this area, often because trustees have never experienced similar systems in place elsewhere and there is no compulsion within the sector for such systems to exist. This attitude needs to change – the level of funds and risks involved in the sector demands this. Submitting true and fair statutory returns on time matters and it’s the trustees that are ultimately responsible Charities with annual income above £1m require a statutory audit of their year end financial statements. The External Auditors are required to give an “opinion” on whether the charity’s financial statements are true and fair presentation of charity finances and activities. There are two main types of opinion – Unqualified opinion: means a clean opinion where the auditors consider the financial statement true and fair. Qualified opinion: means a bad / adverse opinion where the auditors raise serious concerns over the financial statements. Human Appeals submitted 2017, 2018 and 2019 (last three years) financial statements consistently show a qualified opinion disclaimer from its External Auditors. The reason for these qualified disclaimers is due to unreliable financial records and a risk of material misstatement in its reported income and expenditure. The qualified opinion also relates to a material uncertainty that the auditors felt exists that may cast significant doubt on the charity’s ability to continue as a going concern. This is a damning verdict on the state of Human Appeal finances, how they are managed and recorded from an independent Auditor.

November 23, 2021 No Comments

Webinars

Webinar to simplify Covid19 Grants and Loans

Update on Q&A Bounce Bank Loans and Charities The condition for having more than 50% of the Business income from its trading activity does not apply to charities including Mosques. Rental Income Rental income is generally classed as non trading income, being investment income. For Bounce back loan purposes this may not be classed as trading activity. Webinar Speakers Nasir Rafiq BA FCA (Founder and Director @Dua Governance Chartered Accountant) He is a widely experienced Chartered Accountant with over 20 years of professional experience. He specialises in helping organisations improve their financial governance and performance. He works with all size charities and businesses. He graduated in Business Economics from University of Leicester and then qualified as a Chartered Accountant (ICAEW) with KPMG (UK). Having worked with PwC (UK) and KPMG (UK) for over seven years in the public sector, he later joined the world’s largest contract catering company, Compass Group PLC (FTSE 100). In his role as a Group Internal Auditor, he worked in the Middle East, South East Asia and Europe. Nasir also worked as a Director and an Associate Partner at a Top 20 Accountancy firm in UK, leading the firms Business Governance Advisory service nationally covering the charity and business sectors.

September 10, 2021 No Comments

Webinars

Webinar: Furlough is Changing from 1 July. Is your Mosque / Charity ready

Webinar Speakers Nasir Rafiq BA, FCA (Found Director @Dua Governance) Nasir is a widely experienced Chartered Accountant and an expert in Financial Governance. He has extensive experience of working with charities of all sizes. He also advises many small to medium size businesses. During the lock down crisis he has been writing blogs on www.duathoughts.com and supporting many charities as they responded to the crisis. Omar Rashid MCIPD (Director @The HR Dept) Omar is CIPD qualified HR professional with widespread generalist and strategic experience. With a proven ability to work with senior managers to influence and integrate HR best practice into overall operational strategy. Omar has been working with charities and business during the lock down crisis, helping them to respond professionally and effectively.

September 10, 2021 No Comments

Webinars

Basic Finance for Charity Trustees

Blood flow in the body is vital for a living and healthy human being. Finance in charities is like blood in the body. There is no charity activity without it. Money buys the goods and services for the most in need and connects the donating hand to the one that receives it. In humans high blood pressure and cholesterol can lead to disease, heart attacks and death. Like humans charities follow the same path. Cashflow problems, banking freeze, fraud, bad accounting and waste of money leads to beneficiaries losing out and in extreme cases a bust charity – unlike local government, charities are not bailed out and die their death. Recent Covid19 crisis has shown this far and wide. To stay healthy humans need to work on their diet, regularly exercise and see the doctor for check-ups. Charities are no different. The political and social environment is constantly changing and the economic conditions are not always favorable. Quality of staff, training, regular performance reviews and checks by internal and external professionals, keeps the finances strong and healthy. To be healthy, we don’t need to be health experts. We just need to know and do the basics. These basics can be life and death in the long term. We have organised a Webinar – Finance Basics for Charity Trustees to discuss the basics of finance that should matter to Trustees of any size charity. As a trustee, you don’t need to be a finance expert. All you need is to ask the right questions at the right time from the right people – our webinar is designed to equip you with just that. Register now @ https://bit.ly/3DGXJSC. All registrants will receive a copy of the recording.

September 10, 2021 No Comments

Webinars

Gift Aid for Mosques

During the Covid19 crisis Mosques suffered as they had to close and there was no Government support available. Despite this, many Mosques played a vital role. They managed Covid19 safe funeral prayers, promoted spiritual wellbeing using online facilities and supported the vulnerable in the community by reaching out to them. The pandemic crisis has highlighted the importance of maximising the support available from Government. Gift Aid is one of the main way, the Government supports charities – Mosques often lose out by not having the systems in place to make the correct gift aid claims. Even bucket donations collected during Friday prayers can attract gift aid with the right systems in place. Our live webinar is designed to address the knowledge gap. We have joined up with Grant Thornton Tax experts who have direct experience in helping a Mosque claim significant funds in Gift Aid. The webinar will be hosted by our Founder Director Nasir Rafiq, a widely experienced financial governance expert that helps many charities of all sizes and types within the Muslim Charity sector. Date: Thursday 2 Sept, 6-7pm, Registration link https://tinyurl.com/w5u9at79. A copy of the recording is available. Please email info@duagovernance.com for a copy with following details: 1) Name 2) Contact email 3) Organisation name

September 5, 2021 No Comments

Blogs

Preparing budgets for Trustees

During the 1980s, the Rambo movies were the ultimate action movies. The pinnacle scene in all these movies was when John Rambo prepared for war. The music in the background, the sound of Rambo stripping up his gear, loading guns, marking his face and then tying a red strip over his forehead prepared him for battle. Rambo had infinite bullets, bullet proof skin and luck always on his side, despite all this, he still had to prepare for battle and war. Preparing and planning is a key ingredient for taking on any challenge, mission or objective. Regardless of the size and reach of a charity, they too have to prepare and plan. The work of some charities is too important to fail. Unlike Rambo in movies, charities in real life rescue the vulnerable out of hunger, poverty, desperation and disadvantage. The budget process in a charity should represent preparing and planning process. Trustees with no financial background often are put off by budget presentation and engagement. When this happens then it is not the trustees that have a weakness, it is the budget process itself that is flawed. I professionally grew up in KPMG UK working in the Government and Public Sector division. My work required reviewing how local councils of all sizes utilised their resources, part of this was to review their budget setting and monitoring processes. This gave me a unique insight of how elected councillors with no finance background engaged in this process – I saw where it went well and where it did not go as well. The charity sector has much to learn from local government. Simple communication is important When appointing a CEO and the finance lead, the trustees should not only look for budget setting and monitoring skills, the presentation and communication skills are as important. The CEO and more importantly the finance lead should be able to present finance information in a way that makes sense to the Trustees with no finance background. The role of finance is often misunderstood in charities and this often impacts the type of staff recruited in finance positions. The finance department is not just an accounting and cash transfer function. It has an important role to play in planning and strategy development. Strategy has to mean something Trustees are often most engaged in strategy development. Strategies should be about how the organisation plans to run and achieve its objectives. This process should not be just a feel good marketing ploy that has no reference to underlying charity resources, ability, strengths and weaknesses. I see this too often. This is where the budget process starts to go wrong. Strategy setting and business setting become two different processes – the left hand does not talk to the right hand. The budget process becomes irrelevant to trustees with no finance background. Budgets should be linked to strategy and trustees should be engaged to discuss the below. Staff structure, ability and reward IT and facilities infrastructure required to deliver strategy Marketing strategy and plans New markets and development considerations Modus operandi Trustees should endorse strategic objectives and budget framework in this context. Only then the budget becomes relevant to trustees with no financial background. The devil is in the detail The finance and accounting profession is technical and regulated. To expect Trustees with no financial background to grasp this in a budget presentation is wrong. The role of trustees is high level scrutiny and strategic direction – this is what should be expected of them. The details should be left for the employed finance professionals, Executive and those trustees that have a financial background. Trustees have a duty of care and thus should seek independent financial advice when required there is no requirement for trustees to form opinions based on their own lack of skills and understanding – The bigger the charity, this becomes a bigger problem. In charities where this happens, this reminds me of Rambo and the reality of it. An actor that acts like an action hero when in real life he is not – This only works well and ends well in movies. Charity finance, accounting and budgets can be complex. Trustees need to ensure all the right bits are in the right places for it to work. Preparing is key – regardless of size, risk and complexity of charity. Author: Nasir Rafiq is a widely experienced Chartered Accountant and a Financial Governance Expert. He has led and directed large finance function in large and complex charities. He is the founder and director of Dua Governance, a charity finance specialist accountancy and business advisory firm.

July 24, 2021 No Comments

Blogs

Governance – When it goes pear shaped

Dominic Cummings, the former senior strategy advisor to the then newly elected Prime Minster Boris Johnson was at the heart of government when the Covid 19 crisis folded and was privy to all that went on. After being forced to leave government, he appeared before the MPs committee on 26 May 2021 to answer questions on how government responded to the Covid19 crisis, this was a fascinating and a shocking viewing. This reminded me of issues I regularly experience in charity and business organisations. I have never been a fan of the politics of Dominic Cummings but his fascinating insight and views on how the government machine worked really hit a nerve. He had many golden nuggets to share for those that understand the practicality of good governance in large and complex organisations. In crisis the cracks are all laid bare. In this blog, I will share some of these golden nuggets: 1. The role of corporate planning Yes, its important to have crisis management plans and risk registers. These should be regularly tested. A government can have all that in place at department level, however this is still not effective unless there is a central plan that brings it all together. In my line of work, often I see a silo working culture in large organisations. In this culture, staff in each department and division become inward looking and start to tick the box for their own sakes. They do not realise that when the organisation hits a crisis, it is not the department plans that matter anymore – the plan has to make sense in the context of corporate priorities and defense, led by the central leadership. In my line of work, often I see a silo working culture in large organisations. Organisations that often have an effective corporate strategy and plan backed by a corporate risk register are the ones that ensure work done at individual and department level is most effective for the wider organisation, its stakeholders and its beneficiaries. There is no point of having a star performing individual or department, if it does not save the overall organisation from sinking. There is no point of having a star performing individual or department, if it does not save the overall organisation from sinking. 2. Decision making in crisis Cummings in his appearance talked about finger pointing of key roles and government departments at each other. He spoke about some great work and talent at junior levels that were being ignored. All this accumulated to a culture of chaos, as the government formulated a response to the pandemic. In normal times, large and complex organisations can have conflicting priorities and policies between departments and official positions. However, in a crisis these can become a hurdle and hold back when there is culture of silo working. The one strong leader needs to become the pilot taking over the reins while switching off the auto pilot. It is at these times; the one strong leader needs to become the pilot taking over the reins while switching off the auto pilot. Those that have the titles may no longer be suitable anymore – others may need to be upgraded to speed up the decision making. Policies that governed the organisation in normal times, may now need to be flexed, removing red tape to create breathing space. All this is needed to respond to the crisis and to save the ship. Consultation for decision making is good but it is a means to achieve a greater good not the end goal. Consultation should be meaningful in a crisis, not just for sake of it to please individual egos. The leader and the wider executive may be appointed through a robust and fair recruitment process – these are for normal times. When the crisis hits the fan, the leader is expected to rise to the challenge taking difficult decisions and making most of the tools at his / her disposal. There is no time for hiding behind or blaming others. An important consideration for those that appoint leaders and CEOs is this question: “Does this leader have the ability to steer the ship in a crisis”. Such focus can have an effect of changing the selection criteria and the value of the leader to the organisation. The leader must be a leader for all times, not just for the happy times. 3. Data does not float in air Having worked on data quality audits in the NHS and local government, I recognise the mechanism by which data is generated and checked. Data is not born from thin air, it requires fit for purpose systems, people and infrastructure. The use of data for normal times can be different from its use in abnormal times. To make the data available in abnormal times, it is not always easy to train people, install systems and infrastructure at short notice – these changes require time and investment. In my experience, organisations that invest in their IT and data infrastructure in good times are the ones that have readily available information to take the right decisions at the right time in a crisis as well as normal times. Often organisation neglect the value of investing for the bad times and end up “stop” and “searching” for solutions during a crisis – this is the worst time for investing. Often organisation neglect the value of investing for the bad times and end up “stop” and “searching” for solutions during a crisis – this is the worst time for investing. A good leader needs to be able to “see” to navigate through the storm, using the tools at his / her disposal. This is only possible with advance planning and investing. 4. Be careful on who your advisor is A strong leader will attract strong advisors. The leader

May 26, 2021 No Comments

Uncategorized

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.

May 22, 2021 No Comments

Blogs

Gardening and International Relief – a strange relationship

Once, after weeks away, decided to cut the grass and bring some order in the garden. It was a jungle, an impossible task. This is how INGOs approach relief work – disasters are like overgrown gardens in a bad shape, an impossible task. The decision to take on this task should not be taken lightly. Is it the responsibility of INGOs or should it be the responsibility of Governments to use their resources fairly and justly? Setting the right objectives is the most important part in setting the right strategy. INGOs often fail at this hurdle, impacting the resulting approach. Before cutting the grass, I put on gloves to avoid splinters, a cap to avoid direct sunlight, I took an allergy pill, as pollen was high. Each time before cleaning the lawn mower, I disconnected the electrics to avoid potential accidents. Risk Management should be part and parcel of INGO work, this should not be seen as a burden. Tie the camel first and then expect God to protect it. Recruiting able staff, budgeting effectively, enforcing banking and procurement controls, installing proper systems and having a good marketing / PR strategy are all signs of risk management – without these Insha’Allah and Masha‘Allah alone do not work. I took regular breaks to assess my progress and cleaned the garden on the go. The INGO sector is a fast moving sector sometimes delivering impossible tasks. There is a lot of learning that needs to happen. Better governed INGOs have effective Internal Audit and Evaluation functions, continually develop their controls and better their performance. Effective Boards don’t get excited on-to-date achievements, they keep the bigger picture in mind – it is not the distance “traveled” that matters but the distance “to travel” that matters – this attitude changes the way INGOs are run. I uprooted many established weeds with deep roots, they had become part of the garden – they did not add any value, the process looked ugly. Fast growing NGOs should review the impact of the workforce, those that do not add value should be trained, reallocated or removed – difficult and ugly but a necessary evil. Weeds effect healthy plants and their growth. After a difficult day the garden was clean – objective achieved. Nasir Rafiq, BA, FCA is the Founder and Director of Dua Governance Chartered Accountants – A charity finance and governance expert

May 4, 2021 No Comments

Blogs

Stress testing of the 20 large Muslim charities in UK

Ramadan this year will be like no other Ramadan before it. The virus lockdown will mean that there will be no prayers in the Mosques or community iftars (opening of the fast). Ramadan will be at home with family. Ramadan is also a month when Muslims give their Zakat and increase their Sadaqa donations. Ramadan becomes a peak and most busy period for Muslim charities to raise funds, especially those charities that have international relief operations. They raise funds in UK to deliver projects abroad. The fundraising planning for Ramadan starts three months in advance and the full year’s income’ depends on the funds raised during Ramadan. The lockdown this year during Ramadan will deprive the Muslim charities from carrying out many of their planned activities. The story of 20 Muslim charities Each year these charities collectively raise Zakat and Sadaqa monies for emergencies. This aid saves lives by providing shelter and food when local governments often fail to do so. They provide regular support to more than 100,000 orphans living in poverty. These orphans rely on this support for a better and secure future. Each Ramadan millions of food packs are distributed worldwide and to coincide with the Hajj ritual hundreds of thousands of Qurbani sacrifices are carried out and the resulting meat is distributed to the most in need and often in the the most remote and hard to reach places. In order to assess the impact of the lockdown on Muslim charities working in the international relief sector, I reviewed the latest submitted audited annual accounts of 20 mainstream Muslim charities. My objectives were to assess the following: Total income raised for International relief and how much is related to UK donors. Total staff employed and the total wage bill. The average liquidity of reserves and the ability of these charities to spend without selling assets or relying on debtors. The average level of unrestricted funds that that these charities held and the flexibility these charities had in responding to the economic downturn. The table below lists the 20 selected Muslim charities in alphabetical order. These 20 mainstream charities are responsible for a significant portion of the funds donated by the Muslim UK donor. They operate a similar business model and face similar risks and challenges. Their combined financial position can give a good indicator on the potential issues the Muslim charity sector is set to face due to the expected and forecasted economic downturn. I reviewed each of the accounts and took an average of two years – these latest accounts covered mostly the year 2018. I noticed some issues that made the comparison and the assessment challenging. So, I had to use my own professional judgement and experience to moderate the numbers so that the findings were meaningful and relevant. Below are the issues that I noted during my review of these accounts. 1. Accounts show historical position more than 12 months old Often the accounts are submitted nearer the deadline which is 9-10 months after the accounting year-end. As a result, the reported numbers represent figures that may be more than 12 months old. International relief is a fast paced sector – numbers that showed the position and performance 12 months ago may no longer be relevant. Its important International relief charities work to submit their accounts within six months after the accounting year-end. 2. Income breakdowns are not sufficiently broken down Income disclosures do not provide enough breakdown to assess the type of income and the geography it relates to. This causes issues when comparing accounts. Different types of income attract a different cost and operating model. 3. Understatement of fundraising costs Some accounts either understated their cost of fundraising by allocating most of their back-office operations to charitable activities or did not disclose them at all. Within the Muslim charity sector, the slogan of 100% donation is heavily used and it may be this is resulting in charities to understate their cost of fundraising. Although this approach may suit a certain marketing narrative, it has an effect of hiding costs and the opportunity to control such costs. You cannot fix what you can’t see. 4. Large charity size effect Islamic Relief Worldwide (IRW) reported income was £127m, the next largest Muslim charity had reported income of less than £40m. This is important to note because if IRW is considered in a similar manner to other charities then what happens at IRW can skew the averages derived from the selected sample that includes IRW. Therefore, it is important to review the averages with and without IRW to ensure the averages were meaningful and relevant. Findings – the impact of the lockdown After reviewing the 20 accounts and moderating to ensure they were comparable, my findings are as follows: I – Income – £370m raised annually of which around £80m raised in Ramadan In the last reported period these 20 charities raised a staggering sum of £370m during a 12-month period. The UK donations were £225m (61%) of this total raised. This balance included gift aid from HMRC and also included gift in kind income of around £25m – these are goods donated to charities, mainly medical from USA and food from various global Institutions. It is estimated that these charities raised around £80m (35%) of their income during the month of Ramadan in UK. Due to the lockdown this part of the income is at risk. Lockdown impact on Ramadan income Due to the lockdown these charities may not be able to raise funds from the community through Events, bucket collections or within Mosques – this will deprive them from those donors that traditionally either gave cash or pledged money at Events. The economic uncertainty, 20% salary decrease of furlough employees and a significant drop in self-employed and cash business income can have an impact of reducing the Ramadan income from the expected levels or the

April 20, 2021 No Comments

Blogs

The question of charity overheads

Donating is key part of faith and worship during the month of Ramadan. Each donation during this period represents, a prayer, an emotion, memory of a deceased loved one or simple sacrifice of personal funds – this is why, when some charities are not able to give a satisfactory answer – it hurts. Muslim Charities in the last 20 years have become large with millions at their disposals. Stories of high salaries and high spend on marketing with few bad stories of mismanagement of funds or safeguarding issues damages the reputation of the whole sector. The question of overhead and value for more becomes more pressing. During the Covid crisis in 2020, I analysed the accounts of 20 large Muslim charities to assess their financial health. This provided a glimpse of the charity sector finances of the 20 Muslim charities. In summary they raised around £225m of which around £80m raised in Ramadan Payroll – £40m with 1300 employed with many self-employed Charities had £107m in cash at year-end When considering the question of overheads, donors should look out for the following in the charity accounts: 1. How much is being spent to raise funds and is this disclosed properly? Although this makes donations increase in size and helps charities contribute more to their causes, a high spend with little returns may suggest waste of funds. My analysis of the 20 large charity showed on average the cost of fundraising was around 17% of the total funds raised – each £1 spent was raising £6. My analysis noted some did not disclose fundraising costs at all, despite these charities raising millions each year. It costs to reach donors, especially when you have employed fundraisers, adverts on TV and social media, poster, and leaflet campaigns and call centres – this all adds up. When a charity does not disclose its costs of fundraising costs, these costs are then showing as part of charitable costs – money spent on actual causes. This maybe driven by the desire to show 100% donations (or close to it). Online fundraising, TV adverts, fundraising consultants and call centres, all focused on raising money from the public demand’s significant resources. A charity that uses such methods to fund raise can expect to raise £4 for every £1 spent. As a result fundraising costs can be around of 25%, if not more. This is supported by my analysis of the 20 charities – four charities had cost of fundraising around that level. However many charities do better and these costs can be from around 15% depending on the fund raising model employed by the charity, its established brand and following. 2. How is charitable spend incurred? If this is incurred through third party organisations abroad, then the real overhead incurred abroad is not disclosed in the charity accounts – this sits with the third-party organisation. The charities are required to disclose these third party partners and how much grants are paid to them. A good and effective overseas operation that is planned and delivered properly will have indirect overheads of 5% to 10% of the total spend in the country. Some countries are more costly than others for delivering relief projects. Overheads lower than 5% may indicate cutting of corners or some exceptional circumstances. 3. How much is being spent on support costs and what is included? The Charity Commission requires all charities to disclose their support costs in their annual accounts. These are indirect costs that are incurred when delivering projects. For an International relief charity, this should represent the general back-office costs (i.e. finance, HR, facilities and IT costs) that support fundraising and charitable activities. For an International relief charity this can range between 5% and 12% of total income. The larger the charity, the smaller the percentage due to economies of scale. This does not mean a large charity becomes better at managing support costs – they should be measured against a similar size charity. 4. What is the salary ratio to income? All charities are required to disclose their payroll costs in their accounts. During my analysis of the 20 Muslim charities, I noticed the overall ratio of payroll cost to total income to be around 11% of the total income. All charities are required to disclose staff on salaries (including benefits) higher than £60,000. A lower ratio may indicate many workers on consultancy contracts and costs hidden within fundraising and charitable costs. If a charity runs its own field offices, then the salary of such office staff should also be disclosed in this note. However, if the charity model is such that the projects are delivered through a third-party Partner which is often the case, then the salary costs of the field office are hidden within the Partners accounts only. My Analysis showed that Muslim charities generally need to improve the information they disclose in their annual accounts – these should not be just marketing documents but a mechanism to satisfy the donors with many genuine questions and concerns. Muslim charities appeal using faith values and the very same values require transparency, better accountability and that the donations are spent wisely and effectively. Nasir Rafiq is the founder and director of Dua Governance Chartered Accountants and Business Advisors – He is a widely experienced Fellow Chartered Accountant and a charity finance specialist.

April 16, 2021 No Comments

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Govt support for the Self Employed

My initial thoughts on the support for the self-employed: 1. You are eligible only if your self-assessment profits were below £50k and there is monthly limit of £2,500 – many will fall into this bracket which is good news. 2. If you have not been declaring your full income in your self-assessments, basically avoiding tax then you have a problem. I can see a large number falling victim to this. 3. HMRC will use your past three year self-assessment, being 2016-17, 2017-18 and 2018-19 to work out the average monthly income based on your average taxable profits. This will be done by HMRC. 4. HMRC will then pay 80% of this average monthly income as a grant directly to the self-employed bank account – this is not a loan and nobody will be required to pay this back. 5. People do not need to contact HMRC now, if they are eligible HMRC will contact them directly. I can see issues with many being missed due to wrong contact details. Please update your HMRC contact details. 6. The HMRC grant is taxable and you will be paying tax on this in your future self-assessments. This income should be treated same as sales in substance. 7. I don’t think there will be any VAT implications – many will not be VAT registered due to being below the threshold. 8. HMRC is sorting its house out so needs time to process this all, therefore they will make the payment in June 2020 for the past three months – the self-employed will have to survive from their own funds until then – this can create significant issues for many in the short term. 9. Those that played clever and set up companies to pay themselves dividends to save National Insurance, will now lose out as dividends are not covered by this scheme. They can only apply 80% of the minimum salary they were taking, which for many was equal to their personal allowance. All in all those that declared all their income during the past 3 years will get something, be it three months late. The Government has also delayed tax payments to help cashflow. Will this support be enough, time will tell – I am not sure. If anybody needs to pick my mind, send me a message.

March 19, 2021 No Comments

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The reality of Furlough employees and Government support

Everyone is talking about Furlough employees and the fact the Government will fund 80% of the salaries of such employees from 1 March 2020. Many think this Government scheme applies to ALL employees – this is not so and there is a small print. The Government is not compensating organisations for loss of income. These organisations can be mosques, charities or businesses – the purpose of this funding is not that and the Government will not compensate for loss of income. As a result of the current lockdown, organisations suddenly had staff that could not work anymore and businesses were at risk of going down under. The immediate response of businesses would have been to let staff go. This is when the Government stepped in and said that they will fund 80% of such staff that either have been made redundant or at risk of being made redundant. This Government support is so that staff are NOT made redundant and kept on the business or charity payroll. The Government said to treat such employees on leave “Furlough” and these employees MUST NOT work at all for their employers. If they do work, be it part time or with reduced wages that implies that they were not at risk of losing their jobs, so such employees are not covered by the scheme. In practice many employees will fall in this situation as businesses and charities will do whatever to keep the ball rolling. The Government expects each employer to determine the employees that are or should be on leave for this lock down (i.e. 3 weeks) and declare them as Furlough employees by formally writing to them. These employees must not then work for that employer during this period. Although this scheme keeps staff at risk employed, it does nothing to address the loss of income or donations in the short term or long term. The effected organisations must develop their own plans to address the impact of this interruption. The Government has asked the banks to give loans to businesses or charities, backed by Government. The banks being banks have started to pick and choose. They are applying their normal due diligence and at times are requesting personal guarantees. Not sure how far this will address the issue in its current state. There is some support for small cash donations from Local Councils – this is focused on small retail businesses and may take time to get through. I sense turbulent times and it is imperative that organisations, be it large or small, plan ahead to weather this perfect storm.

March 19, 2021 No Comments

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Unity FM Radio station talks to Nasir Rafiq

Unity FM Radio host Ahmed Bostan talks to Nasir Rafiq, Director Dua Governance about the Covid19 lockdown impact on Muslim charities in UK.

March 19, 2021 No Comments

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Unity FM Radio Interview: The Furlough Grant is Changing – Are you ready

March 19, 2021 No Comments

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Unity FM Radio: The role of Government COVID19 support in saving local Businesses and Charities

Nasir Rafiq, Director Dua Governance talks to the Drive time special on the role of Government support in saving local businesses and charities. He talks about how Waqf projects can help Mosques, Madrassahs and Islamic schools. He suggests a collective effort national and local effort to re-skill those at risk of losing their jobs.

March 19, 2021 No Comments

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Unity FM Radio: Responding to Govt announcement on extending Furlough scheme to March 2021

Behind the Headlines Thursday 5 November 2020 Nasir Rafiq, Director Dua Governance Chartered Accountants and Business Advisors talks to Ahmed Bostan Presenter Unity FM Radio. Nasir responds to the Chancellor Rishi Sunaks announcement on extending the Furlough scheme to March 2021. He talks about is potential impact on jobs and businesses.

March 19, 2021 No Comments

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Govt support for Businesses and Charities

This paper sets out my summary thoughts focused on mosques, charities and small businesses like gyms and tuition centres. Please contact Dua Governance (details below) if any further information is required on this topic or advise on how to manage the challenging financial circumstances. Support through the Coronavirus Job Retention Scheme 1. All charities including mosques are eligible to claim this support. 2. The Govt will reimburse 80% of the salary of employees (those on payroll) up to a maximum of £2,500 per month – all Mosque employees will fall within this category. 3. This scheme applies to employees that would have been laid off as a result of the crisis. Mosques, tuition centres, gyms and leisure centres are all eligible. They had to shut due to Govt advise and now the employees in these establishments have no work – keeping them on payroll is not an option as the income that was funding their salaries is no longer available, for example no Friday prayers means no Friday cash collection, no evening schools, no fees. Same applied to gyms and tuition centres and similar businesses. Considerations 1. Employees on payroll will have to be formally sent on “leave of absence” as per their contracts. Many Establishments may not have employee contracts in place – this gap needs to be addressed urgently so that there are no issues of conflicts in the future. 2. The Govt is yet to work out the process of reimbursement – The Govt is expected to set up a online portal through which claims can be paid. 3. Once the online portal is made available, I expect teething issues and delays due to the volume of businesses applying and the limited HMRC capacity for responding – In the meantime, organisations may need to consider the Coronavirus Business Interruption Loan Scheme (see below). 4. The Govt will not be funding 100% of the salary – businesses, Mosques and charities will need to determine if they will fund the 20% gap – this will have to be negotiated between the employees and employers. No organisation is obliged to cover the 20% gap. 5. Unfortunately, the consultants (self-employed) will not be covered by this scheme. This is applicable to many mosques and charities where many workers are on consultancy contracts. Maybe these organisations need to consider placing such workers on payroll to retain their services – again this is a conversation many of these Establishments need to be having with workers on such consultancy arrangements. Support through the Coronavirus Business Interruption Loan Scheme 1. All mainstream banks will provide this and the Govt is providing a guarantee of 80% on each loan – This scheme will support loans of up to £5m. Banks will issue guidance shortly. 2. This is also applicable to all Mosques and charities and for the first 12 months – there is no interest rate charged as the Government will cover this. 3. There is a cap of income of £45m to be eligible, making all mosques and Muslim charities eligible expect for a few with annual income above £45m. 4. Many Mosques have ongoing construction projects that depend on qard-e-hassan. Due to Mosques closing, suddenly this option may no longer be available to Mosques. 5. I don’t envisage international relief charities to benefit from this unless they have committed costs and they are not able to raise the budgeted funds during Ramadan. They may want some cashflow support in the medium term and this is where this support becomes relevant. 6. Small businesses like gyms and tuition centres, may need cashflow support for various reasons to pay salaries, rent or other bills. This scheme then becomes relevant to them. Considerations 1. Banks will have their own eligibility criteria – this will focus on how the Mosque or charity intend to pay the loan back – historic numbers with good forecasts will be required. Many Mosques and charities can provide this as these are sustainable businesses. 2. How fast will the banks process the applications is also a question mark when their own staff are expected to be impacted by the virus. I expect some time lag between application and cash hitting the organisations bank account. In the meantime, organisations must prepare all the historic costs / accounts and potential forecasts need to be prepared for the bank applications. Business rates Councils should cover business rates for charities and mosques – normally they cover 80%, I can see the exemption being extended to 100%. The Govt will waive this for leisure businesses, gyms may fall into this category. Again, local councils will use the existing business rates system to cover this. Support for businesses that pay little or no business rates – mosques and charities that occupy a building can potentially qualify for this as they pay little or no business rate – the local council will be able to make a one off grant of £10,000. Again, local councils will manage this process. Grants Cash grants of £10k are available for small retail, hospitality and leisure businesses – this may include gyms – the local councils will introduce a process for this. Written by Nasir Rafiq, (BA, FCA)

March 19, 2021 No Comments

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The Camel and Muslim Charities – Risk Management

In a well-known saying Prophet Muhammad (PBUH) advised Muslims to tie their camels before placing trust in God for its protection. This concept has some very important lessons for Muslim charities: 1. Charities should recognise their risks like the risk of losing the Camel. Charities face the risk of fraud, loss of reputation; loss of income; loss of key staff, fines and penalties, litigation and most importantly the risk of not achieving the charity or fund objectives… to help those in need. The impact of these risks will depend on the nature and size of a charity; they nevertheless apply to all. 2. Recognised risks should be controlled. God will not protect the Camel unless it’s properly tied up. Trustees and Directors of Muslim charities should ensure that adequate and effective controls are introduced to mitigate risks. Application of these controls should be in the context of risk, for example, the Camel can be tied up with a metal chain (expensive and excessive) or a weak rope (camel will break free). Moderation and proportionate risk control is therefore the way forward, and those charged with governance should put in place the capability to allow them to exercise this role effectively. 3. Place your trust in God. No control is perfect to eliminate risks. According to the values of Islam, it is because of God’s mercy and blessings that charities are often protected and make a difference to their beneficiaries. It is important however not to abuse this beautiful concept by leaving risks unattended… like that Camel. By Nasir Rafiq (Founder and Principal Dua Governance) An Expert in Governance and Internal Control

March 19, 2021 No Comments

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Overheads in Charities – Good Governance

Overheads are support and administration costs that Charities incur in delivering their charitable objectives. In a small organisation this may be borne by Trustees with no impact on charity accounts whereas in large charities this cost becomes unavoidable. Overhead costs and activities either incurred by the charity or by the donors directly are important, as without these costs or activities, it is impossible to deliver charitable objectives. Trustees and Directors have a legal duty to ensure that charity funds are spent wisely, properly and according to charity objectives. Consequently, robust administration of funds becomes a necessity for Muslim charities and the wider charity sector generally. Support costs however can be rationalised, if charities are able to effectively capture, control and plan their support costs, for example: The business case for support costs should be reviewed against the risk management and accountability needs of charities. Consistent good financial controls and robust year end reporting of support costs through the annual accounts and internal reports; Effective budget monitoring of support costs through out the year; and Smart business planning to reduce the impact of support costs on public donations, for example the use of trading income, specific business donors. By Nasir Rafiq (Founder and Principal Dua Governance) An Expert in Governance and Internal Control

March 19, 2021 No Comments

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Islamic Schools the Untold Story of Governance

I recently visited an Islamic school that had not prepared its last 3 years of annual accounts. The Charity Commission had threatened to take them over, so in response they sought my help. After giving the Chairman a roasting for not giving financial accountability the due importance demanded by the regulators and Islam, I discussed the underlying reasons and explored solutions. This is not the first time, I have come across a private Islamic school in financial difficulty. The same story repeats itself. Having worked as a senior Auditor in the Education sector with KPMG, I have a good understanding on how good governance looks like in the Education sector. With Islamic schools there is an often an untold story – they are criticised when things go wrong but nobody tries to actually understands the underlying issues, never mind coming up with solutions. The reality Islamic schools are often set up by someone passionate about Islamic education on a voluntarily basis and with the support of the community. Personal funds, donations and Qard-e-Hassan loans are the traditional funds that are used to purchase the building, employ teachers and for other upfront costs. I am yet to find a school where student fees alone cover the running costs therefore reliance is placed on donations and ongoing Qard-e-Hassan loans. The Governors are never fully remunerated from the School due to Charity Commission restrictions. They often dedicate their full time as Chief Executive and give personal guarantees on the personal loans for the school. Their reputation becomes intertwined with the school. The founding Governor is often consumed by the day to day operations and cash flow challenges. It is surprising how some of these schools sometimes achieve good Ofsted reports on their academic achievements despite lack of resources. I put this down to the barakah placed by God due to the sincerity of the Governors, staff and parents. So what does this mean? These unique features of Islamic schools have some implications. These are symptoms from the issues highlighted earlier. Qualified staff and teachers cannot be afforded by such schools – reliance is placed on staff working for religious reasons and not for money, volunteers, family friends or on inexperienced staff. This directly impacts on the overall governance and standards of the school. As staff gain experience, they often leave for better paid positions elsewhere. Due to personal sacrifices by the founding Governors, it becomes difficult for the Governors to delegate authority to Management giving rise to internal conflict and high senior staff turnover. Cash flow becomes a bigger priority over financial control and accountability due to the loss making situation of the school. Unrecorded debt, the reasons for losses, spend without invoices to avoid VAT is not challenged or addressed. This very attitude contributes to a culture of ambiguity and secrecy. Those among the community that give significant donations or Qard-e-Hassan loans to the school ascertain a position where they start to influence student admissions and staff employment. This compromises quality and standards. So what should be done? In my view and based on my professional experience, some simple steps can significantly improve this dire situation. 1.Before embarking on setting up a school, always prepare a business plan – Good business plans help to explore eventualities, mitigate risk, assess financials at the outset and plan accordingly and helps to ensure stakeholders are engaged in a transparent manner. 2.The school must be self-sustaining. If student fees alone cannot help to breakeven then the school must be supported by other reoccurring income i.e. trading activities, grants. Again this should be explored through business planning. Donations and Loans should not be used to fund core activities. This poses financial uncertainty. 3.As a Governor the following financial KPIs must not be ignored: a. Bank reconciliations – never underestimate the importance of this. The Governors should ensure it regularly happens and must be aware of the implications. Bank reconciliations are the back bone of financial control. b. Always be backed by a good Independent Accountant – Volunteers or sympathisers as Accountants may not be forthcoming in making sure issues are highlighted. c. Ensure the annual accounts preparing process takes place. This provides a good opportunity to assess the financial health to plan for future. 4. It is not sufficient for Management / staff of schools to demand one way delegation – Management / staff should also introduce sufficient checks and balances to provide independent assurance to Governors that delegated authority is not abused. 5. Regular self-assessment against readily available checklists or by professional can help to high light issues before they are picked up by external regulators. These assessment should cover financial and non-financial aspects. Regular self-assessment is common feature among good governed organisations. These simple steps can instantly make a difference and promote Good Governance in Islamic schools. There is no such thing as a perfect organisation. In my view gaps are not issues as long as these gaps have action plans against them. Issues and Gaps are growing sins without action plans. By Nasir Rafiq BA ACA – Governance Expert Managing Director Dua Governance Chartered Accountants and Business Advisors

March 19, 2021 No Comments

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The Barakah of Consultation (Shoora)

Consultation (Shoora) within Islamic tradition is a noble act and reflects the way of the Prophet (pbuh) and his companions (RA). Shoora should be an important aspect of Muslim organisations, be it within business or the charity sector. The benefits of shoora or consultation are immense. It helps to arrive at good and strong decisions, promotes consensus and when done with God and the Prophets seerah (pbuh) in mind, then such decisions include the barakah of God. Another well-known aspect of shoora in a life of a Muslim is the concept of Istikhara, where a Muslim directly consults God to clear any indecisions in a person’s life. I sometimes come across organisation within the Muslim sector where despite prolonged time spent consultation / shoora, the decision making process is not effective and unfortunately this results in conflict among decision makers and sometime loss in time and resources. Having spent considerable time reviewing governance within the UK Government sector and the Corporate FTSE 100 sector, I feel something that the Muslim world should have adopted, it is ironic that the West understands and benefits from. The following are some of the common issues with consultation in organisations with solutions – lets not waste the barakah and benefit that comes from a good and effective consultation: Why wait for meetings Consultation or shoora is sometimes intertwined with formal meetings – this delays the decision making and prolongs the consultation unnecessarily. Consultation should not be conditional on holding meetings. Solution: The decision making process should be broken down and should start well before the meeting where formal decisions are to be made. The process of decision making and consultations should be separated. I know it all Depending on the decision required, the consultation should include professional input. A mind-set that already portrays ‘We are perfect and know it all’ can never benefit from consultation – it becomes a useless exercise. The Prophet (pbuh) valued this, lets not undermine it. Solution: Consultations should be conducted with respect and an open mind and with the overall objective in view. Scatter gun often shoots the wrong target The aim of the consultation should be to manage risk, explore opportunities and to plan – when emotions take over then instead of addressing these aims, it becomes a process in which point of views are aired with no clear output – often the case. Solutions: A framework should be agreed for consultations to ensure it does not deviate from its initial objectives. There are many well developed, tried and tested techniques and tools available to support good consultations i.e. six thinking hats is one technique, I endorse. By Nasir Rafiq BA ACA – Governance Expert

March 19, 2021 No Comments

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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

March 19, 2021 No Comments

Corona virus, UK Mosques and Financial impact

Mosques in UK play a vital role for the Muslim community. They open every day for the five daily prayers and for the evening school. They hold large gatherings of worship every Friday and every night of Ramadan. Many large Mosques provide funeral and wedding services. Due to Government advice, Mosques across the UK have closed. Ramadan this year will fall during the lockdown which normally is the busiest period for Mosques. This Ramadan, they will fall silent with doors shut to thousands of worshippers that flocked to them every day and night – this is a devastating loss to those who planned to visit their local Mosque during this Ramadan. The spiritual loss of collective worship is clear but with this there is also a significant income drop that these Mosques now face. Friday collections, evening school fees and special donations raised during the month of Ramadan are all in jeopardy. Mosques are free with no entry fees; all donations are voluntary, and these donations are used to fund the daily running costs of the Mosques. Their closure means their access to cash and donations has suddenly stopped. The impact in numbers Friday collections and evening schools’ fees make around 75% of the total yearly income of the Mosques. In large Mosques, this part is still significant being around at least 50% of the yearly income. A three-month closure of the Mosque will drop the yearly income by at least 20% and this is without the Ramadan donation effect. The closure during Ramadan will eat away a big opportunity to raise funds – often for Mosque expansions. The payroll costs of Mosques represent around 50% of the total yearly costs with some staff on self employed contracts. The true staff cost (payroll plus self-employed) could reach up to 75% of the total yearly costs. During the closure, there are some costs Mosques will save but I don’t expect this to be significant. We are in summer months so gas and electricity usage will not be high. The closure has stopped the income leaving Mosques with costs to bear. The Government Job retention scheme will fund 80% of the salaries, bearing in mind that a vast majority of Mosque employees are either on national minimum wage or not far from it. The Government is yet to set up a portal for the claims and once set up there may be delays before the money hits the Mosque bank account. This will pose a cashflow challenge. Action plan In these challenges time, the following are some of the actions Mosques should consider: Payroll: Continue processing the payroll for furloughed employees even if you don’t have the cash to pay the employees. The Government will compensate 80%, back dating to 1 March 2020. If the employees are not on the payroll then there is no compensation. I expect the Government to extend the period of this scheme if the situation does not improve. Self Employed: There is no support from Government to fund Mosques for the self-employed who provide services to the Mosque – The Mosque may be able to immediately stop their service or reduce their payments. If the Self Employed are depended on the Mosque income and there declared income is not enough then they should apply for Universal Credit. Online: Switch to online solutions for teaching children to compensate the evening school income. This is a sudden requirement and many Mosque staff may not be trained or tech savvy. National member organisations (I.e. MCB, MINAB) should urgently set up working groups or platforms that can provide volunteers, guidance or vet suppliers that Mosques may choose to provide this service. Databases: Those Mosques that had created donor databases should use this database to encourage donors to set up monthly or weekly direct debits, focusing on Friday collections and sadqa. Those Mosques that do not have a donor database, they should immediately start compiling one. The lock down may continue for a longer period if the NHS capacity is breached or not controlled as expected by Government. Mosques must act now and not assume this will be over soon. Ramadan: Develop fund raising campaigns for Ramadan that may involve social media (Facebook, YouTube channels) and donation boxes at homes of regular worshippers. Restricted funds: Majority of the Mosques don’t have restricted funds given the nature of the general use of Mosques by worshippers. If a Mosque does hold restricted funds, these are for either Mosque construction or for various International appeals focused on poverty. Restricted funds can only be spent on the purpose they were given for. However, the Charity Commission has released guidance on using restricted funds to fund or cope with an unexpected event like the one unfolding at present – this should be the last resort and the Commission has encouraged taking professional advice. Qard-e-hassan: Raise qard-e-hassan to cope with the closures – Unlike many other businesses, Mosques have a sustainable business model. As soon as the lock down is over and Friday prayers and evening schools start – the cash generation will start immediately. Mosques will always have a mechanism to pay back the raised qard-e-hassan, same may take longer as a result of this crisis. Reduce costs: The impact of a three-month closure of Mosques and Business will have a financial impact that will last for years to come. This is the time when Mosques should start to streamline their costs and explore long term savings that can be made. Once the lock down is over, it is most likely the donors will have less to donate. This may impact many of the planned Mosque expansion projects and the funding of ongoing costs. and Financial impact

March 19, 2021 No Comments

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Cleanliness and Good Governance

During the lockdown, as we spent more time at home, many of the home chores have become part of our routine. One routine, I always had even before the lockdown, is emptying the kitchen waste and recycling bins. Yes, we recycle and I actually breakdown the carbon waste and separate the plastics, no matter how insignificant it may seem. I don’t want any tiny fish stuck in any plastic that I use. The bins fill up quickly and I take them out to the large council bins and every week the bin man with the lorries come and take all the waste. Each time, I bring the empty bins back into the garden, I feel a sense of accomplishment and then look forward to the next cycle. You must be confused by now as to why I am talking about this rubbish. Well, this weekly routine very much relates to and reminds me of my day to day professional job. I work as financial governance expert helping many organisations, large and small, improve their governance and finances. As humans, organisations also accumulate rubbish – this is in the form of bad practice, bad relations, inefficiencies and bad impact. This is not necessarily generated through bad intentions but sometimes the most sincere actions result in these consequences. Exactly like, the food we consume, we need the energy and pleasure, however this generates waste and unintended consequences. Like our homes, the rubbish that organisations generate also needs disposing otherwise with time, this gives a bad odour and can result in “unwanted rodents” and harm. I have seen this too many times with damaged HR relationships, loss of funds, bad accounting and financial control, reputational damage, legal issues and conflicts in Boards. Like our homes, this is only possible when organisations regularly clean themselves by self-audits, self-accountability and regular external scrutiny. Recognizing the reality of this generated unintended rubbish / risks, is the utmost skill required for those that run organisations i.e. Executives and Trustees. No organisation regardless of size and wealth is immune from the accumulating rubbish and those organisation that take rubbish seriously are the ones that are the most clean and have the biggest impact with an intact clean image and reputation. As I work with many of my clients improving their accounts, governance and performance, I always get the same satisfaction, if not more, like when I return the bins to their location, ready for the next challenge and cycle.

March 19, 2021 No Comments

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Let Your Numbers Talk

Good Governance requires charities to use good quality financial information for decision making and accountability. The year-end financial statements prepared by charities provide the following minimum benefits: An annual feedback on use of reserves and financial activities. This is often a year old and may not represent the current state. If audited, then independent certification to confirm whether the financial data held by the Charity is materially ‘true and fair’ – meaning there are no ‘big problems’ in the accounts. The Executive and Trustees can be held accountable for income and spend. A discipline is enforced for keeping records and maintaining audit trails of income and spends. In addition to the above, charities that aspire to improve their governance should use their financial statements as effective tools to improve control, inform strategy and achieve transparency, for example: The financial statements should make sense to trustees and those charged with governance. They should inform decision making and strategy otherwise there is a risk that decisions may not reflect ground reality. This could potentially lead to disastrous consequences or waste of resources. Charities should use the year-end process to take stock of their financial controls. Financial controls and financial statements are interlinked. Late or poor quality financial statements are often as a result of inadequate financial controls. The financial statements must be user friendly, reflecting the nature of the charity. This raises the charities profile and credibility among its donors and external bodies such as banks, institutional funders and regulators. By Nasir Rafiq (Founder and Principal Dua Governance) An Expert in Governance and Internal Control

March 19, 2021 No Comments

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Islamic Schools the Untold Story of Governance

March 19, 2021 No Comments

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UK Muslim INGO sector and its challenges – commentary on the ODI report

I have reviewed the HPG working paper on UK humanitarian aid in the age of counter-terrorism: perceptions and reality by the Oversees Development Institute (ODI). The paper sets out the views of different stakeholders and makes some general recommendations. The paper lays bare some very important issues often ignored and hidden by the donating public and politicians, impacting and hurting beneficiaries on the ground. My views on the report are as follows: I have no doubt and agree with Banks and the Charity Commission on the money laundering risk around Muslim NGOs due to the high risk areas they operate within to reach those that are effected. Banks are private businesses that need convincing that INGOs behave responsibly and are able to “demonstrate” good control through good governance and internal control framework – often the lack of it and the inability to demonstrate it, raises the risk for the banks, resulting in transfers or accounts being blocked. The Charity Commission regulation and inspection is lacking – the compliance standard bar is very low. This has an effect on charity behaviour of just complying with the minimum, always risking non-compliance. One great example is year-end accounts that need to be filed within 10 months after the year-end – The INGOs take 9 to 10 months to finalise these, meaning it is only after this period (9-10 months) the charity can determine its true and fair year-end income, spend and reserve position. The quality of accounts is another matter. The ODI report has an omission – the external auditors of INGOs were not engaged for their views. These are the only independent checks the INGOs really have on their accounts. These audits take account of money laundering risks and the control environment and transfers to field offices. I am surprised the ODI report missed this – hence may present an incomplete picture. With my audit experience of the Muslim INGO sector, in my view the issue is not of new guidance but complying with the existing. In my view and experience there appears to be an issue of complacency among INGOs trustees, inability of the Executive, poor capacity of organisations and a culture of taking risks. I came across a lack of appetite to improve governance and control from the Trustee level beyond talk. The issue of control at Trustee level is often confusingly restricted to banking controls and appointment of officers. Accountability, Delegation, Internal Audit framework, Evaluations and Risk Management with the Muslim INGO sector is poor when compared to mainstream charities and standard practice, especially in the context of operating within high risk areas. This partly because of the inability and inexperience of management in understanding these controls and not being able to implement them. The other issue is of capacity that is wrongly driven by donor behaviour – the issue of overhead creates an environment where INGOs start competing on low overheads, exposing themselves to risk and non-compliance as management and systems are starved – 100% donation policy within INGOs is wrong and must be discouraged. For an INGO to operate responsibly with donor money as per “regulation” in the current climate, up to 15% – 20% support costs can be justified depending on INGO business model and life cycle. Donors should be focused on governance and how the money is spent – this is where quality of year accounts and trustee reports are vital and often ignored. The issue of culture of taking risks among Muslim NGOs must also be addressed. The ability and confidence of saying “No” or pulling out when the it is clear that the “minimum” cannot be achieved in implementing controls in high risk areas. The culture of over-riding controls to reach beneficiaries compromises the true essence of risk management. Muslim INGOs operate in a very difficult environment, often delivering where governments with all their resources fail. The plight of those affected cannot hold back those that are inspired by faith – the current climate requires that in such circumstances a responsible risk management approach is adopted – Muslim INGOs need to learn to work with each other on the ground – meaning if you cant deliver as per regulation then give to the INGO that can – this is a bitter pill to swallow but a pill that may be required. Lastly, the recommendations made by the ODI report are general and are of common sense nature. I would have expected them to go further. In my view an environment needs to be created where driven by donors and the Charity Commission, INGOs compete each other on improving governance with a star style system like that in the US. This needs to be introduced in consultation with the banking sector so that the banks can ignore noise and rely on something credible and tangible. Despite the issues identified in the report and my observations, I have great admiration of those that work in this sector, often on low or no salaries, inspired by faith, at times risking their lives and comfort. They are the best of humanity and must be supported by all. By Nasir Rafiq BA ACA – Governance Expert

March 19, 2021 No Comments

Blogs

Leadership – a fashionable term often a misunderstood concept

In recent times, I had a taste of leadership where I led and directed large teams in challenging circumstances. Before this and in my professional capacity, I always critically analysed others on their leadership and this time having to implement what I had preached was a surreal experience. This experience not only confirmed many of my perceptions, but it also gave me new insights on real life challenges often ignored by external consultants. Leadership is a misunderstood concept and there is no size or style that fits all. Circumstances, underlying issues and the character of those that are being led, all together dictate the style of leadership required. My view has always been that leadership is all and only about achieving organisational objectives and strategy. If this does not happen then there is no leadership, it is just mere representation and title. A good leader will have an idea, end goal, strategy. This can only come with relevant knowledge and experience. Leadership is about making those that are led, believe in this idea and vision. They all then work together towards that goal. Performance, priority, and consultation is based on this. Firm and difficult decisions are made in this context. Patience and consistency are required from the leader despite the odds and resistance. Another effective attribute of a leader is identifying own weaknesses and limitations. This again should be in the context of the end goal and vision. Once the weakness is recognised, only then the leader can do something about it. Leaders that fail to recognise their own weakness and its potential in holding back the end goal are not strong leaders no matter how much they pretend they are. Those that profess that they lead but lack a vision and idea of their own, just enjoy the limelight and respect of the title. Defending their own image becomes a big issue and when they lose the title, it is devastating to them. They are not leaders; they just represent those they lead and merely ride on their success until they can. Success and downfall of organisations can depend on who leads them. You can have the best team and resources; a bad leader will make a mess out if it. On the other hand, a good leader can make success out of weak teams with little resource. This is why, for those charged with governance, the biggest test of their ability is on how they choose their leader. When organisations choose leaders based on who best can represent them because of culture, friendship or nepotism rather than who is the best for achieving the end goal, vision and strategy then don’t blame the leader when it all goes to pot. In such organisations, it is often found that issues are not resolved, difficult decision are not taken, risk is not managed, the organisation does not become stronger, goals and strategy are not clear or achieved, staff are not developed and a vacuum is left when the chosen one leaves.

November 12, 2020 No Comments

Uncategorized

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.

June 20, 2020 No Comments

Uncategorized

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.

June 4, 2020 No Comments

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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: 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. 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. 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 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. Local councils must understand the impact of Ramadan lock down on Mosques. Central Government should be lobbied to make Imams and faith leaders exempt from the volunteering restriction within the job retention scheme. 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.

May 30, 2020 No Comments

Blogs

Third Sector coverage of Ramadan lockdown and its impact on Muslim charities

https://www.thirdsector.co.uk/nasir-rafiq-ramadan-lockdown-poses-major-financial-risks-muslim-charities/fundraising/article/1681727

May 11, 2020 No Comments

Corona virus, UK Mosques and Financial impact

April 3, 2020 No Comments

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