Charities monthly round-up March 2024

Could it possibly be another Charities Act 2022 update?

Well yes, it could! Those of you who are regular readers of our monthly charities newsletter will be aware that we have included an update on the Charities Act 2022 in our previous two editions and the March newsletter will not escape a similar fate. On 7 March 2024, the third tranche of changes from the act were rolled out and are now in force. These changes include updates to provisions regarding amendments to governing documents, restrictions on the disposition or mortgaging of charity land and changes to provisions relating to the appointment and remuneration of charity trustees.

However, readers may be relieved to know that this may be the last update on the Charities Act 2022 for a while. The sections of the 2022 Act pertaining to ex gratia payments have not yet been rolled out (see the January and February editions of the newsletter for further details) and there has been no indication from the Department for Culture Media and Sport as to when we can expect these changes to be implemented. Make sure to keep an eye out for future editions of the newsletter as we will update readers when any further announcements on these provisions have been made.

If all the updates and changes to the Charities Act 2011 have left your head spinning, please register to attend our upcoming webinar Charities Act 2022: Changes in force from 7 March 2024. The session will be led by Edwina Turner, a legal director in our charity governance team, who will be joined by Laura Mynott, a senior associate in our property team and Catherine Gibbons, an associate in our charity governance team who will provide a run-down of all the information you need to know. The session is specifically designed with charity trustees, senior managers and anyone involved in charity governance in mind.

Charity Commission launches its five-year strategy

As you may have noted from the January edition of our newsletter, the Charity Commission has been due to publish its 5-year strategy and the wait is now over. Outlining its strategic roadmap for 2024 – 2029, the strategy highlights the regulator’s priorities as being ‘fair and proportionate in its work’, ‘supporting charities to get it right, while taking robust action where it sees wrongdoing and harm’ and ’embracing technological innovation’. The strategy also sees a strong focus on ensuring the regulator’s independence and empowering the staff at the commission to deliver ‘excellence in regulation’.

In his speech announcing the five-year strategy, chair of the Charity Commission Orlando Fraser referenced an increasingly polarised society and quoted the ‘culture wars’ as a phenomenon impacting the landscape for charities. The speech highlights that the Charity Commission, in their bid to ensure they are not weaponised in said ‘culture wars’, will resist politicisation and will instead be steadfast in its pursuit to uphold the law independently. These comments follow similar sentiments shared by Helen Stephenson, the outgoing chief executive at the regulator who, in April 2023, warned that the Charity Commission should not be weaponised during internal trustee disputes. It is clear, therefore, that independence and objectivity have long been on the regulator’s radar.

For further information and commentary on this matter, see our blog post published by Edwina Turner last month.

New guidance on accepting donations

In an update to the November edition of our charities newsletter, the Charity Commission has published new guidance setting out the rules for trustees to follow when deciding whether to accept donations. The guidance indicates that accepting donations should be the starting point but outlines an approach for trustees to take when they are faced with a situation where they feel they should refuse or return a donation.

The guidance indicates that trustees should assess the donation in question by determining how the decision to accept or refuse the donation aligns with the charity’s purposes. They should also determine the severity of any risks involved in accepting the donation, including any threat of reputational harm or reduced support from their beneficiaries. These factors should be carefully weighed with reference to the negative financial impact of refusing donations and whether any steps could be taken to mitigate the risks of damage to the charity’s reputation or support as a result of accepting the donation.

The guidance is a helpful resource for any charity accepting donations and can be found here. If you or your charity have any questions regarding fundraising, please contact Catherine Gibbons or Edwina Turner.

Charity Commission inquiry finds serious misconduct and mismanagement in a legal advice charity

A recent Charity Commission inquiry into the Joint Armed Forces Legal Advocacy Service found that a disqualified trustee had continued to exert significant control over the charity and appeared to be acting as a trustee despite his disqualification. The disqualified trustee was found to be directing the actions of the other trustees, who were either unwilling or unable to stop his continued involvement with the board and were ‘uncooperative and obstructive’ during the investigation. The inquiry also found the remaining trustees failed to distinguish the charity from the disqualified trustee’s private business and allowed donations to be made to his bank account. The disqualified trustee has been referred to the police as it is a criminal offence to act as a trustee while disqualified. The organisation has been removed from the register of charities and the remaining trustees have been disqualified from acting as a trustee.

This matter highlights a number of important things for trustees to bear in mind when exercising their duties, including acting in the charity’s best interests, remaining independent and managing conflicts of interest. It also highlights the importance of working with the Charity Commission to address issues when concerns have been raised.

If you are concerned about complying with your trustee duties or require any assistance with the Charity Commission’s regulatory powers, please contact Edwina Turner, Phil Watts, or Sarah Tomlinson.

You can take that to the bank… maybe

A survey conducted by the Charity Commission has found that 42% of charities experienced poor service from their banks in the past year. Among those surveyed, 6% reported that their bank account had been frozen or blocked, with other respondents noting difficulties with the ID requirements to get new bank accounts opened. The full results of the survey are expected to be published later this year.

The findings of the survey have prompted the Charity Commission to urge the banking sector to take immediate action, stressing that difficulties with banking services can lead charities to resort to inappropriate alternatives such as using trustees’ personal bank accounts. The issues can also have a wider impact on the sector, particularly where organisations face difficulties in paying staff due to banking issues. The chief executive of the Charity Commission has confirmed that efforts are being made to improve the situation within the sector but noted that more work needs to be done.

Menopause in the workplace guidance

The recent publication of the Equality and Human Rights Commission’s guidance on menopause in the workplace has sparked conversations about the need for more discussions around menopause within workplaces. In her recent ebriefing, Libby Hubbard examines the legal framework established by the Equality Act 2010 regarding menopause in the workplace, particularly focusing on discrimination protection and the duty of employers to make reasonable adjustments. Drafted with charities in mind, the ebriefing offers practical advice for organisations with limited resources on how to support women experiencing menopause symptoms, emphasising the importance of individualized support, education and flexibility.

Employment update

Our employment team have published a number of interesting blog posts recently which might be of interest to readers:

• Of particular interest to those working in or adjacent to the social care sector, a blog post published by Jackie Morris discusses the legal and ethical considerations regarding the use of photographic and video evidence during employment investigations and tribunal proceedings, particularly where the recordings were taken without the individual’s consent.
• In her blog post published this month, Hannah Bollard discusses the actions employers should take to spring-clean their records ahead of the National Minimum Wage rates increasing in April. Hannah emphasizes the legal requirement to maintain records of the hours worked by employees and the payments made to them and provides some top tips for anticipating and dealing with requests for records under section 10 of the National Minimum Wage Act 1998.

For any advice on employment matters related to your organisation, please contact our employment team.

For more information contact Sarah Tomlinson, your editor this month. Sarah is an associate in our charities team. Sarah specialises in governance issues including charity reorganisations, mergers and hive-offs, advising on regulatory matters involving the Charity Commission and trusts and property issues for charities. Sarah regularly advises churches and denominational clients on sharing arrangements and she is currently an interim manager for the Charity Commission. Away from work, Sarah is a busy mum of four who loves to visit the theatre and is a governor of her local primary school.

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