Digi­tal solu­ti­ons for Swiss charities

One of the biggest chal­lenges facing a charity’s board of trus­tees lies in using and inves­t­ing the charity’s assets appro­pria­tely. Inter­na­tio­nal tran­sac­tions, assets inves­ted abroad and the regu­la­tory envi­ron­ment at play (Common Report­ing Stan­dard, CRS) can turn out to be parti­cu­larly tricky. The current trend towards digi­ta­li­sa­tion opens up valuable oppor­tu­ni­ties for a charity’s board of trustees.

Digi­tal book­kee­ping means that banks need to supply data in digi­tal form. This can repre­sent a chall­enge, as banks use diffe­rent formats and quality levels. It is neces­sary to develop 

various elec­tro­nic inter­faces so that digi­tal bank data can be proces­sed auto­ma­ti­cally within the charity’s book­kee­ping system. Suita­ble IT infra­struc­ture brings nume­rous bene­fits, such as cost savings, the ability to create reports effi­ci­ently (annual reports, profit and loss accounts, and capi­tal flow reports) and prepare for tax returns, etc. 

Invest­ment report­ing gives boards of trus­tees a trans­pa­rent over­view of bankable and non-bankable assets. It needs to measure the perfor­mance of assets on a range of aggre­ga­tion levels (e.g. on the level of asset clas­ses or various port­fo­lios through to conso­li­da­ted perfor­mance). This form of report­ing asses­ses perfor­mance using a suita­ble bench­mark. . As a result, inde­pen­dent assess­ments are key. From the perspec­tive of risk manage­ment, asset port­fo­lios need to be asses­sed on an inte­gra­ted, conso­li­da­ted basis. The board of trus­tees needs to moni­tor the invest­ments regu­larly and compare them to the invest­ment stra­tegy laid out by the asset manage­ment contract. Depen­ding on the charity’s statu­tes, the compe­tent super­vi­sory autho­rity may review the asset manage­ment stra­tegy in line with the requi­re­ments of the Swiss pension provi­sion plan (BVV2). 

Ulti­m­ately, a full review of all cash flows, fees and char­ges is indis­pensable when asses­sing the perfor­mance of an asset mana­ger. They need to be compared to the fees levied on the compe­ti­tive market. Addi­tio­nal cost savings can be expec­ted if diffe­rent products (such as annual reports or invest­ment reports) can be crea­ted using the same data.

Now, some Swiss fidu­ciary compa­nies offer their custo­mers digi­tal book­kee­ping solu­ti­ons and invest­ment report­ing, which is why it is recom­men­ded that chari­ties review their provi­ders carefully.