Charities Newsletter – May 2021

As lockdown restrictions begin to ease across the UK, life is beginning to look and feel more normal. Whilst the news headlines continue to be dominated by COVID-19, the Charities sector has been continually developing and responding to the challenges posed by the pandemic. This newsletter brings you the latest updates for the Charities sector.

New Charities Bill announced in Queen’s Speech

In her speech on 11 May 2021, the Queen announced that the Government will introduce a new Charities Bill. This is a significant and long-awaited development for the Charities sector. The bill has been designed to reduce the bureaucracy that charities face by “removing inappropriate burdens while safeguarding the public interest in ensuring that charities are properly run”. The bill will change the law to make it easier for charities to change their governing documents, sell their land, deal with permanent endowment funds, and to merge with other charities. A document published with the Queen’s speech contains further information about the new bill, which can be accessed here.

New Charity Commission guides published for charity trustees

The Charity Commission has launched a new campaign to help trustees with charity governance, and how to be “certain in uncertain times”. Recognising the difficulties that charities have faced throughout the pandemic, five short guides have been published relating to charitable purposes, managing finances, conflicts of interests, making decisions and where to find support. All of the guides can be accessed here. Should you require any guidance on specific charity governance issues, please do get in touch.

The Government announced the easing of COVID-19 restrictions for public fundraising

The Government announced that door-to-door, street and private site charity fundraising was allowed to return from 12 April 2021, in line with Government guidelines.

Whilst the Government did create an emergency fund of £750m in April 2020 to support charities and social enterprises, this money was required to be spent by the end of March 2021. Face-to-face fundraising represents an important income stream for many charities, a welcomed announcement for the sector.

Charity Commission seeks views on new draft guidance on responsible investments

The Charity Commission is consulting on updated draft guidance on responsible investments, to provide trustees with greater confidence in taking this approach to investment. The draft guidance makes clear that the rules which apply to all financial investments also apply to responsible investments, such as the obligation that trustees must act in the best interests of the charity. The guidance also highlights that charity trustees have discretion when deciding whether to adopt a responsible investment approach to reflect the charity’s mission and purpose, or to focus only on financial return.

Since the consultation began, the Commission has acknowledged that two unnamed charities are seeking High Court clarification in relation to the law on responsible investments. Nevertheless, the Commission has highlighted that it is important to continue the consultation, and has asked that any comments on the draft guidance be submitted here by 20 May 2021.

Annual Cyber Security Breaches Survey published

The Department for Digital, Culture, Media & Sport has published the results of an annual survey regarding cyber security for businesses and charities.

The survey found that a quarter of charities have reported security breaches or attacks in the last year, with breaches higher among high-income charities. The most common breach (by a long way) was phishing attacks. The results of the survey also suggested that the risk of cyber breaches to organisations is heightened due to COVID-19, “which has made securing digital environments more challenging as organisational resources are diverted to facilitating home working for staff”.

The Government has recommended that businesses and charities follow expert guidance from the National Cyber Security Centre (NSCS) to enhance their cyber security – examples can be found here and here.

Policy paper on the Charity Commission’s power to appoint Interim Managers published

The Government has published an updated policy paper setting out when and how the Charity Commission may appoint an Interim Manager for a charity.

An Interim Manager is appointed to manage the affairs and property of a charity as “a temporary and protective action”, either to the exclusion of the charity’s trustees or (in limited circumstances) to work alongside them. The paper lists the circumstances where an Interim Appointment will be appropriate, including where there is a significant risk to a charity’s assets, income, services, beneficiaries or reputation. The paper also lists the potential positive impacts of an Interim Manager Appointment.

If you are concerned about the possibility of an Interim Manager being appointed for your charity, further guidance about this can be found here, and we are always happy to help with any queries you may have.

Our Charities team publish e-bulletins to keep you up-to-date with breaking news and topical issues affecting the sector.

To find out more about the Charities team and the work we do, please visit our Charities section.