June is here, and so is the halfway point of the year! As we move into the summer months, now’s a great time to take stock, refocus, and make sure your charity is aligned with the latest developments in the sector. Whether you’re planning ahead for trustee meetings or just catching up between funding rounds, we’ve rounded up the key updates, consultations, and regulatory changes to keep you informed and ready for what’s next. This month we’re introducing an exciting addition to the team here at Anthony Collins and focusing on why trustee oversight is so important!
Welcoming Ben: Strengthening support around data, privacy and cyber risk
We’re pleased to introduce Ben Pumphrey, who recently joined Anthony Collins as a legal director specialising in data privacy and cyber risk. With over a decade of experience advising clients across both the public and private sectors, Ben brings with him a wealth of knowledge at a time when charities are navigating increasingly complex data protection obligations and digital risks.
Ben’s background includes working extensively with health and social care providers, local authorities and mission-driven organisations. This makes him ideally placed to support charities in managing everything from data protection compliance and freedom of information requests to the ethical use of emerging technologies, such as artificial intelligence.
His arrival further strengthens our commitment to supporting charities with robust governance, enabling you to build trust, resilience, and social impact through ethical data practices. If your charity is reviewing its data policies, exploring digital innovation, or simply looking to strengthen its approach to privacy and security, Ben is here to help.
Why trustee oversight matters: Financial policies – A lesson in prevention
Clear financial policies and procedures are the backbone of good governance and essential to maintaining public trust. They ensure that donations are properly safeguarded, spending is transparent, and trustees remain in control of how funds are used.
Every charity should have systems in place to cover:
- Payment authorisation – with appropriate oversight, ideally dual signatories.
- Cash handling – kept to a minimum and tightly controlled.
- Bank account management – including regular reconciliations and restricted access.
- Trustee oversight – with boards actively engaged and asking the right questions.
- Internal reviews – routine checks that help identify issues early and demonstrate accountability.
These aren’t just best practices — they’re crucial safeguards.
A recently launched statutory inquiry into a number of charities highlighted what can go wrong when those safeguards aren’t in place. Over £22 million was issued in cheques and then converted into cash via a single company across more than 100 charities (ten of which are the initial subjects of the inquiry). The use of cheques being converted into cash at this scale, with no clear records of where it went or why, raised serious concerns.
Cash transactions can appear suspicious, are difficult to trace, and leave organisations exposed to potential fraud or mismanagement, even if the intent was innocent.
The inquiry is now assessing whether trustees exercised adequate financial oversight and whether the funds were used in line with charitable purposes. You can read our full blog here for the key takeaways. If your charity could use support reviewing its financial procedures, our governance team are here to help. You can get in touch with Edwina Turner for more information.
Why trustee oversight matters: Investing charity funds
Trustees are legally responsible for how a charity’s assets are managed — and that includes any investments made. While many boards are cautious about investing, it is essential that trustees understand their duties in this area and take an active role in investment decisions, even if external advisers or fund managers are involved.
What are trustees required to do?
Under the law and Charity Commission (the Commission) guidance, trustees must:
- Act in the charity’s best interests, balancing risk and return;
- Take professional advice unless they have the skills to decide alone;
- Review investments regularly, adjusting if circumstances or priorities change;
- Comply with the charity’s governing document, including any ethical or social investment considerations;
- Document decisions clearly, showing the process followed and rationale used.
Investment isn’t just about return — it’s about stewardship, sustainability, and strategic alignment.
What happens if trustees get it wrong?
Failing to properly discharge these duties can lead to serious consequences, including:
- Personal liability if trustees cause a financial loss through negligence or breach of duty;
- Regulatory scrutiny or formal action from the Charity Commission (the Commission);
- Reputational damage that affects donors and beneficiaries alike.
The Commission’s updated guidance, CC14: Charities and Investment Matters, provides a clear framework for making responsible investment decisions. In serious cases, the Commission may issue an official warning if it believes trustees have failed to meet their legal obligations — and if trustees ignore such a warning, it may take further action, such as disqualification or removal from office. If you’d like help reviewing your charity’s investment policy our team is here to help. Please contact your usual contact at AC or Sarah Tomlinson.
Why trustee oversight matters: Effectively managing social media
On 4 June 2025, the Commission issued an official warning to the Palestinian Refugee Project, citing serious governance failures. The warning outlines four key areas of concern, highlighting breaches of trust, duty, and mismanagement by the charity’s trustees.
The Commission found that the trustees failed to understand or fulfil their legal responsibilities, with insufficient engagement from the full board. One trustee was allowed sole control over the charity’s website and social media, resulting in the publication of divisive and inflammatory content, some of which was political and not aligned with the charity’s objectives.
Additionally, the charity lacked basic financial controls, leading to unauthorised expenditure of funds. The trustees also failed to submit annual financial reports for the years ending 1 April 2023 and 2024, breaching their legal obligations.
In response, the Commission has set out a series of actions the charity must take within six months. These include implementing a robust social media policy that aligns with the Commission’s 2023 guidance on social media use by charities. This guidance includes a checklist to help trustees develop appropriate policies and ensure responsible online engagement.
The warning was issued under section 75A of the Charities Act 2011, which empowers the Commission to formally address misconduct or mismanagement in charities.
Tips for safe social media use by charities
To help avoid similar issues, charity trustees should consider the following best practices:
- Develop a clear social media policy aligned with the Commission’s guidance.
- Ensure shared oversight of all digital platforms—no single trustee should have sole control.
- Regularly review content to ensure it aligns with the charity’s objectives and remains non-political.
- Train staff and trustees on responsible digital communication and reputational risk.
- Monitor engagement and respond appropriately to public feedback or concerns.
If you’d like help reviewing your charity’s social media policy, please contact your usual contact at AC or Ben Pumphrey.
Why trustee oversight matters: Governance lessons from Kids Company
This emphasis on strong governance and financial resilience was reiterated in the Commission’s recent statement following the High Court’s ruling in the Kids Company case. Readers may remember that Kids Company was a high-profile charity that provided support to vulnerable children and young people. It collapsed suddenly in 2015 amid concerns about financial mismanagement, governance weaknesses, and an overreliance on short-term funding, despite receiving significant public and government support. The court found the trustees acted in good faith and did not disqualify them. However, it also supported the Commission’s decision to investigate, highlighting the public interest in examining the governance of a high-spending, high-risk charity.
The Commission has emphasised that this judgment reinforces its role in protecting trust in the sector and that ‘good governance’ remain essential for all charities — no matter how passionate the mission or how committed the trustees. Charity boards have a duty to ensure that their organisations are not just well-meaning, but well-managed.
So what does good governance mean? Key lessons to bear in mind are:
- Good intentions aren’t enough – trustees must demonstrate sound decision-making, especially on finance and risk.
- Financial resilience is critical – charities should build and maintain reserves and avoid overreliance on unstable or short-term income.
- Trustees must engage actively – asking tough questions, testing assumptions, and recording decisions to show proper oversight.
- Regulators expect accountability – and will scrutinise governance where public money, high-risk activity, or reputational impact is involved.
These are not theoretical expectations but real responsibilities that trustees must understand and apply.
If you need support in reviewing your charity’s governance processes or require training to ensure your board is meetings its responsibilities, our team can support you. Please contact your usual contact at AC or Sarah Tomlinson.
Recruiting new trustees: Updated guidance
It can of course, be increasingly difficult to find and recruit new trustees! In our previous newsletter, we discussed the Commission’s research into the state of trusteeship in England and Wales. They have since updated their guidance on trustee selection and recruitment to reflect key areas of improvement identified in that research.
The refreshed guidance encourages charities to keep their trustee role descriptions under regular review, making a clear distinction between essential requirements and skills that can be developed in the role. It also highlights practical steps charities can take to widen their search for trustees, including using outreach methods and training opportunities to engage a more diverse range of candidates. The guidance further emphasises the value of recruiting trustees with relevant technical expertise in the charity’s area of work.
These updates are reflected in the Commission’s online guidance which you can read about here and here. If you’re considering recruitment and looking to strengthen the effectiveness of your Board, our charities team can help. Please contact your usual contact in the AC Charities Team
Annual returns made simple: Who’s in, who’s out, and what’s new
Each year, many charities must submit an annual return to the Commission. This provides key information about the charity’s activities, finances, governance, and structure. However, not all charities are required to complete one.
Who must submit an annual return?
Registered charities in England and Wales with an income of £10,000 or more must complete an annual return.
Charities with income below £10,000 still need to update their details annually but aren’t required to complete the full return.
Who is exempt?
Some charities are not required to register with the Commission at all, and so are not required to submit annual returns:
- Exempt charities: These are not regulated by the Commission but by other bodies (e.g. universities regulated by the Office for Students). They include some educational and religious institutions.
- Excepted charities: These are temporarily exempt from registration if their income is below £100,000. This often includes certain religious charities (e.g. some church denominations) and armed forces charities.
- Community Benefit Societies (CBSs): These are not registered with the Commission but with the Financial Conduct Authority (FCA) and are generally not subject to annual return requirements unless also registered as charities.
What’s new for 2025?
The Commission has published its 2025 Annual Return question guide, helping trustees understand what information they’ll need to provide. New questions reflect the Commission’s focus on safeguarding, income sources, partnerships and risk. Charities should familiarise themselves with the questions early to avoid surprises. You can view the 2025 question guide here.
If you’re unsure whether your charity needs to complete an annual return, or you’d like help preparing one, our team can advise. Please contact your usual contact at AC or Katie Crosbie.
Employment update: Board training on equality, diversity, and inclusion (ED&I)
Ensuring compliance with the Equality Act 2010 and the importance of ED&I within their organisation is a key part of a trustee’s role. To create a working environment where all feel included and able to thrive is the job of all involved with that organisation and the trustees have an important part to play. With that in mind, our employment and pensions team have written a practical and interactive training course for trustees on the part they play. It addresses the key components of the Equality Act 2010 and looks at recent case law and its ramifications and more recent legislation. As we have seen from the recent Supreme Court case brought by Women Scotland regarding the definition of ‘sex’ in the Equality Act, this is not a static area of responsibility for trustees so it’s key that they feel informed and up to date on their duties and responsibilities. The course is one hour long and provides ample time for trustees to ask questions and engage in discussions over best practice and areas for improvement. If you would like further details, please do contact jackie.morris@anthonycollins.com in our employment and pensions team.
For other employment-related queries, please contact your usual AC contact in our Employment Team or Libby Hubbard.
For more information?
For more information or advice on the topics covered in this month’s newsletter, please get in touch with your usual AC contact or me, Sarah Tomlinson, your editor for this month.
For those who don’t know me, I am an associate at AC in the charities governance team. I have extensive experience advising local, national and international charities on governance, restructures, and mergers. I work closely with boards and chief executives to guide them through challenging changes, aiming to make the process as smooth and positive as possible. I am also appointed by the Commission as an interim manager of charities who are the subject of a statutory inquiry.