Charities Newsletter – January 2019

Our Charities team here at Blake Morgan publishes bulletins to keep you up-to-date with breaking news and topical issues affecting the sector. We also offer regular charity trustee induction and refresher training sessions.

Charity Commission Updates

The Charity Commission has published it’s long awaited report of its statutory inquiry into The Cup Trust:

• On 18 January 2019 the Charity Commission published a report of its statutory inquiry into The Cup Trust, a former registered charity which, following a complex tax avoidance scheme concerning the benefit of gift aid payments from HMRC, ceased operating on 26 May 2017 and was removed from the Register of Charities.
• The Blake Morgan Charities team will be publishing a blog post in the next few weeks on this topic.

The Charity Commission has updated its guidance on protecting charities from abuse for extremist purposes

The guidance has been substantially amended to assist charities that host events at their premises, use speakers at events or distribute literature, as a means of furthering their charity’s purposes. The Charity Commission have prepared a bulletin and a blog post on the topic, and the updated guidance can be found here.

Charity Commission issues alert on cross-border terrorist financing in Syria and Turkey

On 3 December 2018, the Charity Commission issued an alert warning charities operating in Syria or Turkey about the risk of inadvertently funding terrorist organisations when using the Bab Al-Hawa crossing to deliver cross-border financial aid.

Charity Commission has updated their guidance regarding the display of trustee legal names on the charity register

From 1 April 2019 the public display name feature will be removed from the register of charities meaning that unless the Charity Commission has granted a dispensation the legal names of all charity trustees of registered charities will be displayed publically on the register.

Charity Commission publishes their Statutory review of the Charities (Total Return) Regulations 2013

The Charity Commission have completed their first 5 Year Review of the Charities (Total Return) Regulations 2013 concluding that the regulations should stay in force, subject to a minor technical improvement.

Most large charities are unclear about the level of reserves they hold

On 21 November the Charity Commission published their review of charities’ reserves policies finding that less than quarter of all larger charities had accurately reported the level of financial reserves the hold in their trustees’ annual report. You can read their full press release and the review on the Charity Commission’s web pages.

Charitable think tanks: Charity Commission published a regulatory alert emphasising the need for balance and neutrality

On 7 December 2018 the Charity Commission issued a regulatory alert to remind trustees of charitable think tanks of their legal obligations and duties to retain balance and neutrality in the course of their research work and publications. This follows the Charity Commission’s criticism of the Legatum Institute Foundation for their publication of a report on Brexit which the Charity Commission found had breached its guidance on political neutrality by promoting a single political view.

The alert covers the need for trustees of think tanks with charitable status to:

• understand their charity’s objects (in most cases, to advance education for the public benefit);
• have control of their charity’s activities (including its use of social media);
• protect the charity’s reputation (including by remaining politically impartial); and
• avoid unacceptable political activity.

The full alert is available here along with the letter sent from the Charity Commission’s CEO to charitable think tanks.

137 data breaches reported to Information Commissioner’s Office (ICO) by charities in second quarter

In November 2018, the ICO published their latest data breach statistics which show that charities reported 137 data incidents for the second quarter of 2018/19 (July through September). This is (coincidentally) the exact same number of breaches as the first quarter of 2018/19.

The majority of charity incidents (88 incidents) involved unlawful disclosure of data with the majority of other incidents (46 incidents) relating to various security issues.

There has been an increase on the same quarter from last year of over 600 per cent – the second quarter in 2017/18 only generated 21 security incidents. However, as the ICO has made clear, that overall figures across sectors have increased greatly since the implementation of GDPR earlier this year.

Fundraising Regulator to name all organisations it investigates

All organisations investigated by the Fundraising Regulator will now be named when it publishes their report.  The intention is that this will bring greater transparency to the process and will make it clear whether complaints have been upheld or not.

The new policy will apply to complaints received from 1 March 2019 but anonymity will still be given to people who make a complaint. The Fundraising Regulator said that it will continue to share its findings with organisations ahead of publishing them to give them time to check all the facts are correct and to give them an opportunity to comment.

Scottish government consultation proposing to give Scottish regulator the power to remove charities from the Scottish regulator if they do not have a clear connection with the country

Charity law differs slightly in Scotland they have separate legislation and since 2005 have had their own charities regulator, the Office of the Scottish Charity Regulator (OSCR).  Up until now in order to be a registered charity in Scotland a body must have wholly charitable purposes and provide public benefit, but there is no requirement for the body to have any connection to Scotland (with the exception of Scottish Charitable Incorporated Organisations).

The Scottish Government launched a consultation on Scottish Charity Law on 7 January. Most proposals only relate to Scottish registered charities, however the Scottish Government is also considering requiring all charities in the Scottish Charity Register to have, and retain, a connection to Scotland. This would not preclude the registration of cross-border charities, which could continue to register with both the Charity Commission for England and Wales and OSCR.

Those interested can read more on the consultation here.

Immigration: Brexit Negotiations and EU Nationals in the UK

Following the Brexit referendum, the position of EU nationals in the UK has become part of the complex withdrawal negotiations. After months of uncertainty, in June 2018, the Government announced the details of the agreement reached with the EU regarding protecting the rights of EU nationals in the UK. The Principles of the proposed Withdrawal Agreement were to be implemented by means of the EU Settlement Scheme, which has already been piloted within the higher education and healthcare sectors and is reportedly working well.

In the context of the ongoing negotiations, Blake Morgan’s Monika Jones and Lisa Parsons review the EU Settlement Scheme and what the impact of a potential ‘No Deal’ scenario might mean for EU nationals working in the UK. You can read their full article here.