Charities Newsletter – September 2018

Our Charities team here at Blake Morgan publishes e-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.

Safeguarding and the Protection of Others: What Should Charities Do?

Safeguarding hit the headlines again at the beginning of August, as the International Development Committee published a report focusing on exploitation and abuse in the aid sector. In the report, MPs accused charities of “complacency verging on complicity” in relation to these issues, saying that “self-delusion” and a “collective failure of leadership” had prevented charities across the sector from tackling problems before they came to light.

The report made a number of recommendations for charities, emphasising that they should:

• Ensure the beneficiaries of humanitarian aid have knowledge of and confidence in their rights;
• Operate a zero-tolerance culture on sexual exploitation and abuse;
• Proactively seek and respond to reports of wrongdoing robustly, with feedback to victims and survivors; and
• Identify known perpetrators of sexual exploitation and abuse through improved reporting and accountability, and prevent them from moving into new positions.

Our Charities team has produced a blog on this topic which can be viewed here.

Charity Commission: Charities must better communicate to the public through their annual reports and accounts

The Charity Commission published the results of its latest monitoring reviews of charity trustees’ annual reports and accounts earlier this month. The results suggest that there has been a level of improvement across the board, but it also claims that too many charities are still falling short.

The Commission took a random sample of 106 charity trustees’ annual reports and accounts in order to review how charities are meeting the public benefit reporting standards, and whether accounts meet readers’ needs including a separate sample of “small charities”. The results are published in the form of two reports:

• Telling your story well: Public Benefit reporting by charities;
  • Charities have continued to improve their understanding of the public benefit reporting requirement following the trend of recent years.
  • 51% of the annual reports demonstrated a clear understanding of the public benefit reporting requirement. This is higher than last year’s 46%. Also, the majority of annual reports included at least one of the two aspects of public benefit reporting: 71% explained who benefited from the charity’s activities, and 62% included a public benefit statement.
• Do charity and small charity annual reports and accounts meet the reader’s need
  • Out of the 106 charities, 74% of the accounts that the Charity Commission reviewed were of acceptable quality which was similar to previous years’ results.

In the case of both reports, the Charity Commission was keen to point to their guidance on these issues which include pro-forma reports and accounts which they state will provide a useful structure for preparing documents that meet the reporting requirements.

An overview of both reports can be found here.

RSPCA Official Warning Notice

The Charity Commission issued an Official Warning to the RSPCA on 22 August 2018, which criticised the organisation’s recent decision to agree a substantial financial settlement with its former Acting Chief Executive upon his resignation in May this year.

Laura Sherratt and Ben Brice in our Charities team have written a blog on this topic which you can view here.

Fundraising Regulator consultation on the Code of Fundraising Practice

On 7 September 2018, the Fundraising Regulator (FR) launched a ten-week consultation on improving the style, presentation, clarity and accessibility of the Code of Fundraising Practice. The closing date for responses is the 16 November 2018, following which the FR will publish a summary of the responses on its website.

A new draft of the Code has been produced to accompany the consultation which features:

• A new table of contents and simplified new ordering of the content;
• A “plain English” review of the language used in the Code;
• A new introduction;
• A glossary of key terms used;
• A table of rules suggested to be deleted or changed; and
• incorporation of the face-to-face fundraising rulebooks into the “collections” section of the Code.

The consultation does not propose to make fundamental changes to the standards within the Code, except in the case of repetition, contradiction, or if a standard is unclear or is found to inaccurately reflect UK law.

The consultation can be viewed here.

Charity Commission: New trustee declaration

The Charity Commission has updated the charity trustee declaration form which must be submitted with all new charity registration applications from 1 October 2018. Any application for registration that is submitted without the updated form after this date will be returned as incomplete. Applications submitted before the 1 October deadline will not require the new form to be used although the Charity Commission has encouraged that any new trustees complete an additional declaration in the meantime.

The new form has been introduced following a change in the law on 1 August 2018 (which we highlighted in previous newsletters) extending the scope of the criteria for automatic disqualification for charity trusteeship. The form now requires a prospective charity trustee to declare that they are not prevented from acting by being on the sex offenders register or a designated person for the purposes of anti-terrorism legislation, or by having been found to be in contempt of court for making (or causing to be made) a false statement.

The Charity Commission’s guidance, which includes template declarations, can be viewed here.

Charity Commission publish guidance to assist with checking if setting up a new charity is the best option

On 12 September 2018, the Charity Commission published new online guidance to help members of the public to check, before they start setting up a new charity, whether this is the best option for what they want to achieve. This provides advice on:

• Knowing who you will help and how you will help them;
• Checking if a charity is already doing what you want to do;
• Checking charity restrictions; and
• Some of the alternatives to setting up charity.

The Commission’s guidance note can be viewed here.

Charity commission: New guidance on converting a CIC to a CIO

The Charity Commission published new guidance on 31 August 2018 in relation to the process for applying to the Commission to convert a community interest company (CIC) into a charitable incorporated organisation (CIO), which, with effect from 1 September 2018, is now possible.

The process includes four steps:

• Preparing a conversion resolution
• Adopting the Commission’s model constitution for a CIO with voting members other than its charity trustees (association model)
• Prepare a resolution adopting the proposed constitution of the CIO; and
• Apply to the Commission to register the CIO.

The full guidance note can be found here.