Charities monthly round-up January 2022

Welcome to our first newsletter and a happy New Year from the Anthony Collins Solicitors team (is that still allowed in early Feb?!).

This year looks set to be a challenging time for the charity sector as we navigate another year with Covid-19, increasing demands from beneficiaries and an expected reduction in public donations due to financial pressures and increasing costs of living that all are experiencing. In December 2021, the Charity Commission (the Commission) released its business plan for 2022; the key objectives were detailed in our December newsletter and the plan is available here. This month we will consider some highlights to look out for in 2022, updates to law and guidance including the progress of the Charities Bill 2021-2022.

Readers operating in the social care sector may also be interested in our ebriefings on transparency and justification of fees for care home providers and visa extensions for care workers.

2022 – watch out for:

• charity tax updates to cultural tax reliefs – museums, orchestras, charitable theatres, and galleries should anticipate amendments to reliefs being introduced by the Finance Bill 2022;
• the Social Investment Tax Relief (SITR) scheme has been extended until 6 April 2023, but HM Treasury is expected to consult on the scheme’s future later this year;
• a consultation on the Charity Governance Code by its’ steering group is expected in preparation for an overhaul in 2023;
• at some point from 1 August 2022, a new Statement of Recommended Practice (SORP) on accounting and reporting for charities will be released;
• the introduction of a new online charity registration form and potentially updated and standardised guidance from the Charity Commission on the role of charity members following the Supreme Court’s decision in Lehtimaki v Cooper is expected;
• the Fundraising Regulator has set out its Business Plan 2021/22 which includes creating a self-reporting pathway for charities to report potential breaches, a review of the Code of Fundraising Practice and changes to the Fundraising Preference Service;
• upcoming key cases include Butler-Sloss v Charity Commission which will consider whether trustees can invest charity funds using a responsible/ethical approach. We are also waiting for a response to Mermaids’ challenge of the registration of the LGB Alliance as a charity due to its controversial position on transgender rights;
• on 2 July 2021 the Governments’ consultation on the Protect Duty, a new anti-terrorism measure, closed. Should the proposals be introduced, charities that own ‘publicly accessible locations’ will have a duty to mitigate against security threats;
• time extensions for filing documents due to Covid-19 are no longer being granted by the Charity Commission. Normal service has resumed and so registered charities are now expected to file their annual accounts, reports and returns as usual.

If you have queries about any of these developments, please contact your usual contact at Anthony Collins Solicitors (ACS) or alternatively Sarah Patrice.

Charities Bill 2021-2022
The Charities Bill has now passed through all stages in the House of Lords and through committee stage in the House of Commons where it is now at report stage. A third reading in the House of Commons will follow before consideration of amendments and Royal Assent are sought.

Charity trustees should keep abreast of the reforms proposed by the Bill and will be reassured by the Charity Commission’s announcement that the reforms will be implemented by a staggered approach. This will allow time to review and implement the changes required. The Commission is also expected to update and/or produce several pieces of new guidance for trustees considering the Bill to try and assist charity trustees as they work out what it means for them.

If you have any queries about the Charities Bill and what it might mean for your charity please contact your usual contact at ACS or alternatively Sarah Patrice.

Inquiry into Dar ul Uloom Islamia Rizwia (Bralawai)
The Charity Commission has opened a statutory inquiry into Bralawai. They have concerns about the failure of the trustees to ensure that safeguarding policies have been implemented, as well as the social media conduct of some staff members and trustees. This social media activity has caused negative media attention for the charity and complaints about the posts were raised directly with the Commission. The Commission will also examine if the charity has managed conflicts of interest when working with partners, as well as looking into general governance concerns.

Background: In 2019 the Commission engaged with the charity and found that they did not have in place appropriate safeguarding policies. The Commission gave the trustees regulatory advice and were assured by the trustees that they would close the charity’s educational centre until they made the required improvements. On a compliance visit to the charity premises in November 2021, the Commission found that the centre had been re-opened without the required improvements being implemented.

This inquiry highlights to trustees the importance of having appropriate safeguarding policies and procedures in place. If the Commission engages with you over the running of your charity, then it is imperative that you implement their recommendations and do not act against any assurances you have made. When using social media, trustees must also consider the impact of their posts on the reputation of the charity. Trustees should conduct themselves in a manner that does not harm the public perception of their organisation and seek to manage reputational risk.

Charity Commission guidance on safeguarding is available here and guidance on risk management is available here. If you have any concerns about these issues, please contact your usual contact at ACS or alternatively Sarah Patrice.

Summary judgment granted in Abdulrazaq and others v Hassan and others
The High Court has granted a summary judgment to the charity trustees of the Exeter Mosque and Cultural Centre based on their defence of qualified privilege. The High Court found that the trustees had a social or moral duty to explain why the three claimants had been expelled, to members of the Mosque. The members had an interest in understanding the reasoning behind excluding the claimants and the trustees had a corresponding duty to explain:

A qualified privilege defence arises ‘where the person who makes a communication has an interest, or a duty, legal, social or moral, to make it to the person to whom it is made, and the person to whom it is so made has a corresponding interest or duty to receive it. This reciprocity is essential’.

Background: The trustees had come into conflict with the claimants, three members of the Mosque, regarding cash payments from Sadiq Al-Ghariani, the Grand Mufti of Libya. After the dispute, the trustees excluded the claimants from the Mosque and published a notice on the Mosque’s noticeboard, online and in leaflets given to the congregation, explaining the reasons for the expulsion. Subsequently, the claimants sued for defamation stating that it was unnecessary to publish the reasons for their expulsion and that the reasons stated were not true.

This case illustrates that charities dealing with member disputes should be mindful that charity members may have an interest in understanding the decision-making process to expel a member. If they do, trustees in turn have a duty to explain the reasoning behind an expulsion.

If you have any queries about member or trustee disputes, please contact your usual contact at ACS or alternatively Sarah Patrice.

Ifa Dudu’s appeal against the Commission dismissed by First-tier Tribunal
The Charity Commission’s refusal to register a charitable incorporated organisation (CIO) for a new religious movement, known as Ifa Dudu, has been upheld by the First-tier Tribunal (the Tribunal). The Commission refused to register the CIO as they were concerned that the proposed CIO was not established for exclusively charitable purposes.

The Tribunal found that the European Court of Human Rights and the Supreme Court’s definitions of religion were not met by Ifa Dudu – who had proposed that the CIO would be established for ‘[t]he advancement of the Ifa Dudu religion’. If Ifa Dudu was not a religion, their purpose did not fall within an established purpose under the Charity Act 2011.

If you are considering setting up a charity, then you should be aware that the Charities Act 2011 defines charitable purpose explicitly. It must fall under one of the 13 descriptions of purpose and there must be a public benefit. If you have any queries about your organisations’ charitable purposes, please contact your usual contact at ACS or alternatively Sarah Patrice.

Registration of church charities in England and Wales
The Charity Commission has announced plans to register over 35,000, currently ‘excepted’ church charities over the next ten years. Preparations for an expanded charity register will be undertaken by the Commission during 2022. They are working with the Church of England to ‘to pilot and manage the receipt of applications from cathedrals applying for charitable status’ and will in turn expand into the remaining excepted church charities. The Commission are expected to give further training to their caseworkers to cope with the increased demand.

If you have any queries about what the charity registration process might mean for you please contact your usual contact at ACS or alternatively Sarah Patrice.

Updated Covid-19 volunteering guidance
The Government has updated their Enabling safe and effective volunteering during coronavirus guidance (again!) with Plan A guidance. The current update includes guidance that:

• for those who have symptoms or have tested positive about isolating and not volunteering in person during this time;
• there is no longer a legal requirement to wear a face covering, however, the current guidance suggest that volunteers should continue to wear masks, in crowded and enclosed spaces where they may come into contact with other people they do not normally meet;
• everyone aged 16 or over is now being offered a booster dose of coronavirus (Covid-19) vaccine. Volunteers can book an appointment online using the NHS website or call 119 to make an appointment; and
• from 11 November 2021, health and social care staff are to be fully vaccinated but, as announced by the Secretary of State for Health and Social Care on 31 January 2022, the Government has stated its intention to revoke the regulations making vaccines a condition of deployment for health and social care staff, subject to public consultation and parliamentary process – so keep an eye out for changes afoot here.

If you have any queries about the guidance or operating safely during Covid-19, please contact your usual contact at ACS or alternatively Sarah Patrice.

Updated guidance for the safe use of places of worship
Places of worship should note that the guidance for safe use of places of worship has been updated to reflect the return to Plan A. There are no longer limits on the number of people you can meet which means there are no restrictions on group sizes for attending communal worship nor restrictions on the number of people that can attend a place of worship significant life events, such as bar/bat mitzvahs, private baptisms, and naming ceremonies. The legal requirement to wear face coverings in indoor public settings, including places of worship, have also been removed though people are still advised to wear a face-covering in crowded and indoor spaces where they may come into contact with people they do not normally meet.

If you have any queries about these issues, please contact your usual contact at ACS or alternatively Sarah Patrice.

Charity Commission chair resigns after allegations of inappropriate behaviour
Martin Thomas has stepped down from his role as Chair of the Charity Commission. His resignation followed negative media coverage in The Times, who reported that whilst chairman of Women for Women International UK he had been the subject of three formal misconduct complaints. One complaint concerned Mr Thomas sending a WhatsApp image of himself in a Victoria Secrets store to a female employee. He contends that this was sent by mistake.

In response, Ian Karet’s term as interim chair of the Commission has been extended by the Department for Digital, Culture, Media and Sport (DCMS). Mr Karet will now remain in his position until 26 June 2022. This will allow the process to appoint a permanent chair, to be carried out for a second time.

With the Levelling Up White Paper unveiled – charity sector think tank warns levelling up funding is not going far enough to tackle homelessness, poverty and crime
With the White Paper now unveiled, there will be many who are concerned that this simply does not go far enough and that the 12 missions to be hit by 2030 will be hard to achieve without any new money attached to them, instead Levelling Up said to be devolving power to local communities to determine local priorities, to refocus education spending on disadvantaged parts of the country, bring the country’s public transport closer to London standards, and provide access to 5G broadband for the ‘large majority’ of households.

Charities operating in the social sector will be concerned by NPC’s report that ‘only 2% of the total levelling up funding allocated so far is going on social infrastructure and services that tackle homelessness, poverty and crime’. These being key issues identified within most communities that need addressing. Funding instead has been focused on economic growth and hard infrastructure. They have called on the Government to create a national Levelling Up Intelligence Board. This organisation would include representation from ‘charities of all sizes, businesses, faith groups and community groups’, utilising the expertise and knowledge of those working in the voluntary and social business sector.

Fundraising Regulator updates Coronavirus (Covid-19): Supporting safe and responsible fundraising guidance
In light of the changing Covid-19 situation, the Fundraising Regulator has also updated its fundraising guidance. The guidance sets out five key considerations that charities should explore when carrying out fundraising activities:

• Keep up to date with and follow Government guidance and any continuing or new restrictions (including regional or local ones) that are in place in England, Scotland, Wales, and Northern Ireland
• Carry out a thorough risk assessment to identify the risks associated with fundraising activity
• Following the outcome of the risk assessment, identify the steps needed to protect the public, fundraisers, and volunteers
• Consider the public mood and likely feelings and preferences of supporters
• Ensure decisions made to carry out a fundraising activity are thoroughly considered, carefully evaluated, and regularly reviewed.

If you have any fundraising queries, please contact your usual contact at ACS or alternatively Sarah Patrice.

Sports England revise A Code for Sports Governance
Organisations who are seeking or currently receive UK Government and National Lottery funding from either Sports England or UK Sport should note that A Code for Sports Governance (the Code) has been updated. The Code ‘sets out the levels of transparency, diversity and inclusion, accountability and integrity that are required’ for such funding. The decision to review the Code was taken in the wake of the Black Lives Matter protests in July 2020.

Whilst the original Code principles and requirements have remained broadly the same, Tier 1 and Tier 3 implementation of the Code has been revised. If your organisation requires Tier 3 implementation you will now need to:

• have a detailed diversity and inclusion action plan;
• take proactive steps to promote welfare and safety in sport including appointing a Welfare and Safety lead Director; and
• consider strategic people plans at least annually.

If you have any queries related to this updated governance advice, please contact your usual contact at ACS or alternatively Sarah Patrice.

For more information

If you would like more details about anything in this newsletter please speak to your usual ACS contact or contact Sarah Patrice.

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