Meet our Expert

NKNick Kavanagh- Charity Finance Specialist 

Nick is a Fellow of the Institute of Chartered Accountants and of the Chartered Institute of Taxation. He has worked in finance in international aid with 12 years for each Oxfam and Save the Children. Nick currently works for Friendship Works, lectures in Charity Finance and Investment at St Mary’s University, volunteers with the Charity Tax Group and is Chair of the Board at Aylesford Priory Ltd.


Do you have any advice on getting a charity credit card? Will this make it easier for the charity when purchasing? Currently, the Treasurer purchases on their personal credit card then claims it back, but this involves a lot of admin.”


The answer

Back in the day, I think I can recall “departmental” cards – but I doubt they would be allowed nowadays by the banks because of the financial institutions’ need for security to be attached to an individual user. Equally importantly the charity needs robust control procedures and this would not be possible if more than one person had access to and use of the same card.

However, I have seen effective use of charity cards without compromising controls and this comprised the following features:-

  • Cards issued to the key people who had real need of them – so not too many. If other staff need items then they can be purchased by the cardholder if it is an authorised purchase.
  • Cards should only be used where necessary. They should not be used as an alternative for setting up credit accounts with suppliers as this is the most efficient way of dealing with charity supplies
  •  Cards should not be used for private purchases.
  •  The card user should keep records of all purchases and ensure all purchases are authorised

The next part of the question relates to laborious book keeping – this is really dependent on the kind of card used.

1.  Debit cards can be used. The advantage may be that fees are relatively small. The disadvantage is that each transaction is charged individually on the bank statement and means each purchase has to be entered into the finance system once the authorised receipt has been presented.

2.  Credit cards can be used. They may be relatively expensive. They will usually result in one charge per month to the bank statement being the total of all transactions made on the card in the month. The cardholder must not share the password or card with others and is responsible for providing receipts for all purchases and having these authorised before passing them to the finance section. They can be entered into the finance system in summary form.

3.  A variant that I have seen work well is the use of Coop Bank purchasing cards. These were provided free of charge to the charity I was involved with and can be used simply as 2 above or can be restricted to certain purchases. One charge per month is made to the charity bank account for all users in a group and analysis can be obtained either on paper or electronically.

I think all three of these options are better than the Treasurer using his personal card. Whichever option is chosen there should be short but clear procedures written up for use and control of the cards.