Charities Newsletter – October 2021

Whilst many of us have been pleased to see the easing of restrictions across the UK since the summer, this has brought its own set of challenges to the charity sector. This newsletter fills you in on the latest updates on these challenges and other relevant news for charities.

Legal challenge begun against Government over Charity Commission chair recruitment

Concerns about political interference in the recruitment of a new Charity Commission chair has led The Good Law Project to begin a legal challenge against the Government. The Good Law Project argued that Oliver Dowden’s complaints relating to the ‘hijacking of charities by a vocal minority” was an attempt to “muzzle the third sector.” This attempt at a Governmental restriction of selection of a chair to rebalance charities away from that agenda is seen by The Good Law Project as being “unlawful and risks undermining the independence of the regulator.”

The Good Law Project had given the new culture secretary, Nadine Dorries, until 24 September to respond to a pre-action letter. If the process is not paused and the call not revoked, the Good Law Project will seek an interim injunction and move forward with proceedings for a judicial review.

Charity Commission says “woke” blogpost did not breach charity laws

For the second time in just a few months, the Charity Commission has rejected a complaint from backbench Tory MPs about a “woke” agenda from charities. The MPs claimed that a blogpost from Barnardo’s discussing racial inequality and white privilege was “ideological dogma” and a “breach of its charitable purposes”.

The Commission decided that Barnardo’s had acted in line with the charity’s mission, and that therefore no regulatory action was required. The Commission added that within the law, charities are permitted to campaign and to take controversial positions, where this is in support of their purpose. The instance is representative of an ongoing tension between the freedom of campaigning positions of charities and the Government and its MPs.

Mixed response to Charity Commission’s responsible investment guidance

Overall, there has been a positive response to the draft revised guidance about adopting a responsible approach to investing charity funds. Respondents have welcomed the Commission’s commitment to updating the guidance, recognising that this is a complex and evolving area. The majority of charities and finance experts were confident that the suggested approach to responsible investment was a “valid option” for their charity.

However, over a third of the largest charity respondents were uncertain about the use of the term “responsible investment”. Concerns were raised in many written comments in relation to replacing the term “ethical investment” with “responsible investment”, with some commenters arguing that charities’ broader work on ESG issues should not be kept separate from the guide to responsible investment.

Baroness Barran moves on from Minister for Civil Society post in cabinet reshuffle

Baroness Barran has become the new academies minister and leaves her post within the Department for Digital, Culture, Media & Sport. During her time in the role, she introduced a new Charities Bill to parliament, the primary purpose of which was to introduce greater flexibility for charity trustees (more info on this can be found in our recent blog post here). Baroness Barran also chaired work for the Government’s loneliness strategy. Her successor is yet to be announced.

Updated coronavirus guidance for the charity sector

The Charity Commission’s COVID-19 Guidance for charities has been updated twice since our previous newsletter. The first update, on 3 August, included advice on holding meetings remotely and postponing or cancelling meetings to reflect the lifting of restrictions in England and Wales. The second, on 10 August, updated the restrictions section to reflect the fact that Wales moved to alert level 0 on 7 August.

Financial impact of COVID-19 on Charities – a round-up

Research from the COVID-19 Voluntary Sector Impact Barometer found that in a survey of 371 organisations, 57 per cent reported an increase in demand since the easing of lockdown began in July, and only 9 per cent reported a decrease. Finances for the organisations improved for 26 per cent and deteriorated for 27 per cent.

Meanwhile, the trade union Community has warned that the cuts to Universal Credit could also increase demands on charities, joining other charities in saying that around 500,000 people would be pushed below the poverty line. The new pressures on charity volunteers and staff would come after already increased demand on almost two-thirds of charities since the easing of restrictions which unions warn could lead to a “mass exodus” of charity workers.

According to a recent Pro Bono Economics survey, 11 per cent of the charities affected reported that the “pingdemic” had a significant impact on their services and 41 per cent reported only a slight impact on service delivery. The report also found that 37 per cent of respondents were more optimistic about the period between April and June than they had been in previous months.

Meanwhile, in a survey of 100 senior executives of UK charities with at least £1m in investable assets this summer, researchers from the James Hambro & Partners wealth management business found that 45 per cent sold assets such as property to generate income. More than half of the executives reported that since the beginning of the pandemic, income had fallen by more than 30 per cent, and nearly 70 per cent do not expect income to return to pre-Covid levels in the next six months.

Charity Fraud Awareness Week 18-22 October 2021

The week is an award-winning campaign run by a partnership of charities, regulators, and other not-for-profit organisations to raise awareness of fraud and cybercrime affecting the sector and to create a safe space for charities and their supporters to talk about fraud and share good practice.

The events of the week are aimed at charity trustees, members, advisers, staff, and volunteers. Charities, NGO’s and Not-for-Profits can get involved by: signing up to the fraud pledge, using and sharing the free online resources, joining one of the planned webinars, and taking part in the social media campaign using #StopCharityFraud.

Feedback on employment practices sought by ICO

Charities, along with businesses and unions, are being asked to help the Information Commissioner’s Office (ICO) support employers’ use of AI as well as other technologies. As part of a planned update to the ICO guidance, the ICO are looking for views from charities to help create practical employment guidance. The call for views is looking for responses from large and small businesses alike to fill in their employment practices on an online survey. The consultation is due to end on 21 October and will be used to update the ICO’s Employment Code in relation to the use of data and data protection measures needed for the use of AI and technology.

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

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