Welcome to our December newsletter.

We wish you all a Merry Christmas and a Happy New Year. This month we will consider recent Charity Commission inquiries and their implications for trustees, updates to guidance on volunteering and safeguarding and the steps you can take to prevent your charity falling victim to fraud.

Readers may also be interested in our employment winter newsletter which includes insightful articles on menopause at work, childcare disparity and dress code discrimination. Additionally, Matthew Wort has written a helpful analysis on the recent White Paper for Social Care, highlighting the oversights in the Government’s plan. This may be an informative read for charities with links to the social care sector.

Inquiry into the Richmond Psychosocial Foundation International (RPFI)
Following the tragic death of Sophie Bennet, who took her own life whilst in the care of the RPFI, the Charity Commission (the Commission) opened an inquiry into the charity. The RPFI operates a residential home for adults recovering from mental health issues and adolescents with complex emotional needs. Sophie was staying at an RPFI residence at the time of her death.

The Commission inquiry found that there had been 'serious breaches of trustee duties and misconduct and/ or mismanagement in the charity’s administration and management'. Further there 'was evidence of both poor governance and poor financial management of the charity'.

The charity trustees had failed to:

  • Comply with safeguarding legislation which resulted in criminal prosecutions, criminal sanctions and substantial fines
  • Responsibly manage the resources of the charity which exposed the charity, its beneficiaries and reputation to avoidable harm
  • Act in the best interests of the charity, causing harm to Sophie Bennett and putting the safety of other residents at risk
  • Carry out their roles with reasonable care and skill, exposing the charity and its beneficiaries to significant risk of harm
  • Provide adequate leaderships and oversight in relation to safeguarding matters
  • File annual accounting information on time
  • Promptly amend signatories to the charity bank account, exposing the charity’s funds to undue risk

Due to their poor governance the charity trustees had failed to provide an environment for beneficiaries, staff and volunteers which was safe and protected beneficiaries from harm. Trustees are reminded that they are collectively responsible for the good governance of their organisation.  

If you are a trustee then you must ensure that at all times you are complying with your charity’s governing document and the law, you are acting in your charity’s best interests, you are managing your charity’s resources responsibly, and you are acting with reasonable care and skill. As this inquiry highlights poor governance can have terrible consequences for beneficiaries. Good governance needs to be treated by trustees with the appropriate seriousness.

The Commission’s decision is available in full here. Our governance lawyer Edwina Turner has written an article on how this sad case highlights what poor governance says about the state of a charity. If you have any queries about governance issues, please contact your usual contact at Anthony Collins Solicitors or alternatively Esther Campsall.  

Charity Tribunal upholds appointment of new trustees to Mohiuddin Trust (MT)
As a result of a contentious trustee dispute following the death of the MT’s founder, the Commission made an order to appoint six new trustees on the recommendation of the interim manager. The chair of the trustees appealed against the appointments, arguing that the selection process had been 'flawed and illegal'. Whilst the first-tier Tribunal (Charity) did not have jurisdiction to judge whether the interim manager’s selection process was 'flawed and illegal', it could consider whether it would have appointed the same trustees based on the recruitment process undertaken. The Tribunal upheld the order.

Deputy District Judge Worth in her closing comments noted that all parties involved in the dispute should take care not to 'allow their feeling about each other to prevent the Charity from fulfilling its objects'. Worth’s comments are an important reminder to trustees of their obligation to act in the best interests of their charity, regardless of their personal feelings towards their fellow charity trustees. Trustees are collectively responsible for making decisions which enable the charity to carry out its purpose. These decisions must be balanced and adequately informed, which will require cooperation and good communication to achieve. Trustees must remember that they are responsible for trying to resolve a disagreement or dispute and to prevent it from causing problems for the charity or damaging its reputation.

Commission guidance on trustee obligations can be found here and guidance on disagreements and disputes in charities here. If you have any queries about trustee disputes, please contact your usual contact at Anthony Collins Solicitors or alternatively Sarah Patrice.

Volunteering guidance updated in response to Omicron variant
In light of England’s move to Plan B the government guidance on enabling safe and effective volunteering has been updated. This includes the introduction of a legal requirement to wear face coverings in most public indoor venues and a return to work from home advice.

Organisations have a duty to manage the risk to beneficiaries and members of the public who use their venues, and to their volunteers. This will entail assessing the risks posed at the venue, and specific volunteer roles and activities. Charities will need to take reasonable and practicable steps to minimise risks. Charities should be advised that the guidance is being regularly updated as the position progresses, and it would be prudent to regularly review the updates. The guidance is available here.

Statutory inquiry into Fashion for Relief
Naomi Campbell’s fashion charity is being investigated over concerns about potential misconduct and/or mismanagement. Following a compliance case opened in September 2020, an action plan was put in place to improve the financial management of the charity. However, after the Commission reviewed the charity’s implementation of the action plan further concerns were raised about the charity’s governance and financial management. An inquiry has subsequently been opened.

The inquiry will investigate whether the trustees have appropriately exercised their legal duties, payments made to trustees, and the financial management and governance of the charity, including the failure to file statutory returns on time.

In light of this inquiry, charity trustees should be mindful of having appropriate financial and governance structures in place. If trustees need refreshing on the rules regarding trustee remuneration, guidance is available here. Should you have any queries about these issues, please contact your usual contact at Anthony Collins Solicitors or alternatively Esther Campsall.  

Appointment of new Charity Commission Chair
Martin Thomas has been appointed as the new Chair of the Commission. His tenure will run from 27 December 2021 to 26 December 2024. Thomas has held several charitable roles and is currently chair of Downside Up and the Forward Arts Foundation. He is also the Chair of NHS Resolution. He has a background in finance having worked at the Bank of England, the European Commission and the European Central Bank. He will replace the current interim chair, Ian Karet.

The appointment process was called into question by the Labour Party and the Good Law Project over concerns that it had been tainted by undue political influence.

Labour Party reshuffle
Following the labour party reshuffle Rachel Maskell, MP has remained in her position as shadow minister for civil society. Maskell opposed the appointment of Martin Thomas as the new Commission chair, calling for the Department for Digital, Culture, Media and Sport (DCMS) to redo the search for the new chair to eliminate 'political interests'. Maskell worked previously at the union Unite.

Lucy Powell, MP was appointed as the shadow secretary of state at DCMS, having advocated for charity shops whilst shadow business minister during lockdowns. Lisa Nada, MP became the shadow secretary of state at the department of levelling up. Between 2013 and 2015 she held the role of shadow civil society minister.

WaterAid refers itself to the Charity Commission  
Over the past year, WaterAid has referred itself to the Commission three times. The first referral followed the tragic drowning of a child in a latrine project, which operated in a community where a WaterAid partner worked. The second referral concerned an attempted sexual assault by a WaterAid contractor and the third involved a breach of WaterAid’s code of conduct. Following these incidents, the Commission worked with WaterAid to improve its application of its safeguarding procedures and its health and safety policies. Charities should be mindful of their duty to report serious incidents, including safeguarding matters, to the Commission promptly. This duty still applies if you have reported the incident to the police, donors or another regulator.

Commission guidance on how to report a serious incident can be found here. If you have any concerns about safeguarding or serious incident reporting, please contact your usual contact at Anthony Collins Solicitors or alternatively Esther Campsall.  

NCVO training on vaccinations in health and social care
English charities delivering CQC regulated activities will be affected by the extension of the legal requirement for staff and volunteers to be vaccinated. The legislation is expected to come into force on 1 April 2022. The NCVO are running an event to 'discuss some of the practical implications and share steps that charities can take to prepare'. Registration details for the event can be found here.

Our employment lawyer, Matthew Wort, has written a useful summary on mandatory vaccination for all of health and social care. If your charity needs guidance on these issues, please contact your usual contact at Anthony Collins Solicitors.

Updated safeguarding guidance for operating online
The Commission has updated its safeguarding duties for charity trustees guidance to reflect the further risks created by operating online. The focus is on content, contact and conduct to protect volunteers and service users from abuse and to protect sensitive information.

Charities are advised to consider:

  • If they have adequate controls over their website and social media accounts
  • How people interact with each other when using their online services
  • How they can monitor what people do, say and share when they use their services

Charities should be mindful that protecting people and safeguarding should be a key governance priority. It is a fundamental part of delivering a public benefit as a charitable organisation. If you have any concerns about safeguarding or good governance practices, please contact your usual contact at Anthony Collins Solicitors or alternatively Esther Campsall.  

Fraud warnings
Over the last year, public donations amounting to £1.6 million have been lost to fraud. The Commission has, in collaboration with the Fraud Advisory Panel, developed a Stop Fraud Pledge to tackle this issue. They are encouraging all trustees to sign up.  

As we face another winter of remote working and increased online fundraising it is imperative that charities consider the risks posed by online fraud, and indeed other types of cybercrime. If your organisation needs assistance with any of these issues, please contact your usual contact at Anthony Collins Solicitors or alternatively Esther Campsall.  

Should there be a 'minimum standard of behaviour' for organisations seeking charity status?
SNP MP John Nicolson has called for charity law to be amended to prevent organisations with a record of 'abusive' behaviour from receiving charitable status. He suggested that there should be a 'minimum standard of behaviour which aspiring charities and trustees must meet before they become charities'. Nicolson’s statement should serve to remind current and aspiring trustees that their role involves managing the reputational risks to their charities. Trustees should conduct themselves in a manner which does not harm the public perception of their organisation.

Commission guidance on risk management is available here. If you have any concerns about these issues, please contact your usual contact at Anthony Collins Solicitors or alternatively Esther Campsall.  

The Alexander Mosley Charitable Trust (AMCT)
AMCT has found itself at the centre of a media storm regarding 'tainted money' after Oxford and several London universities accepted donations from the charity. Critics have derided AMCT’s connection to Oswald Mosley, who was the leader of the British Union of Fascists. The public response has started difficult conversations about the providence of donations. It again highlights the necessity for charity trustees to have a robust reputational risk management plan in place. If your organisation needs assistance with risk management, please contact your usual contact at Anthony Collins Solicitors or alternatively Esther Campsall.  

The Prince’s Foundation and donations-for honours claims
The Prince’s Foundation has been contacted by the Metropolitan Police following claims that Marei Mubarak bin Mahfouz, was helped, in return for donations, by the former chief executive of the charity to secure an honour. The police released a statement saying that they had 'liaised with The Prince’s Foundation regarding the findings of its independent investigation'.

The Commission has already opened a statutory inquiry into the Mahfouz Foundation to investigate if donations intended for The Prince’s Foundation were received by them instead.

If you have any concerns about appropriate donation procedures or governance issues at your charity please contact your usual contact at Anthony Collins Solicitors or alternatively Esther Campsall.  

Charity Commission Business Plan 2021 to 2022
The Commission has published its business plan for 2021 to 2022. This sets out its four key priorities for next year:

  • Priority one: they will help charities to deliver impact, as the country recovers from the pandemic. Deliverables for this priority include designing and delivering a trustee portal, to build better relationships with trustees.
  • Priority two: they will continue to deliver a step change in their approach to regulation. Deliverables for this priority include setting up a training academy for their caseworkers to improve their skills and knowledge. They will also begin to register Cathedrals and set out their plan for Church registration.
  • Priority three: they will improve how they use data. Deliverables for this priority include reviewing the framework for data collection from charities.
  • Priority four: they will create the right environment to enable their people to be more effective and to help make the Commission a great place to work.
For more information

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