Charities weekly round-up 10

Whilst last week saw some children returning to school and groups of people from different households finally being able to meet again, life in the UK is still far from “back to normal”. The question for many, however, is: do we want to go back to normal? It may be that our recovery from the coronavirus pandemic is an opportunity to find new, better, and more sustainable ways of doing things.

Inaction in addressing the biodiversity and climate crisis, in particular, must not be allowed to continue in the post-lock down world. In my recent article in Governance and Leadership, I discussed how charities and not-for-profits can use The Climate Contract Playbook and Green Paper for Model Laws to help tackle climate change.  We often see our charity clients finding ways to improve the status quo and we suspect that they will be amongst those ensuring that we find a better normal for both the environment and society.

Catch up with the latest charity updates in this week’s news round-up.

Latest Charity Commission guidance

The Charity Commission has published a new guidance note on serious incident reporting during the coronavirus pandemic. It has also produced an examples table to help trustees to decide if they need to report an incident as a serious incident where it is related to the pandemic. Trustees should bear in mind the two following key points from the guidance:

1. Taking action (for example, closing premises) to meet government rules should not be considered a significant incident in itself. Rather, it is the impact of this action on the charity that is key to determining if the action should be reported.
2. Usually, the Commission expects charities to report any financial losses exceeding £25,000 or 20% of the charity’s income (where crime is not involved). However, these thresholds do not apply when considering financial losses that are related to the pandemic. Instead, trustees should focus on the significance of the impact of any losses, rather than the amount.

The ACS Charities team is very familiar with the Commission’s regulatory work: three members of the team are currently appointed by the Commission as interim managers of charities that are subject to a Commission inquiry, and we regularly advise on and draft serious incidents reports. Please get in touch with your usual contact for further advice.

House of Lords inquiry

The House of Lords Select Committee on Public Services has begun an inquiry into the impact of the coronavirus pandemic on the public. Baroness Armstrong of Hill Top, chairwoman of the Select Committee, said that the coronavirus crisis has “highlighted some fundamental weaknesses in the design of public services…The committee will explore how the lessons from coronavirus can inform public service reform.”

Part of the Select Committee’s work will include looking at the role charities have played during the pandemic. Charities will be asked to give information about the lessons they have learned, how they have collaborated with the public sector, and how they could work together with public services in the future.

Charity Commission clamps down on poor governance

A trustee of an Aylesbury poverty relief charity, “GTC”, has been disqualified after stealing £240,000. Published by the Charity Commission last Tuesday 2 June, the inquiry report states that GTC has now been removed from the register of charities.

The Commission began its investigation in December 2018 following concerns about the charity’s governance and financial management. It was found that in being the sole trustee of the charity, the trustee had acted in breach of the charity’s governing documents. A conflict of interest then arose, which was not identified, recorded or appropriately managed. This conflict led to the trustee transferring approximately £240,000 from the charity’s bank account to his private bank account. He then used this money to buy a property, which was held in the name of a private company, of which he was the sole director.

The trustee was found guilty of theft on 31 October 2019 and is therefore disqualified from acting as a charity trustee until his conviction is spent in 2023.

Whilst this is an extreme example of poor governance, charity management can prove particularly difficult in the current circumstances. If you need further advice or support, please speak to your usual ACS contact.

Furloughing latest

On Friday 29 May, the Treasury published further guidance on the extension of the Coronavirus Job Retention Scheme and set out a timeline for the gradual phasing out of the Scheme. The Scheme will be closed to new entrants on 30 June 2020, meaning that the last day on which an employee can be put on furlough for the first time will be Wednesday 10 June.

From 1 July, furloughed employees will be able to undertake some part-time work for their employers: we expect further guidance on flexible working arrangements for employees on furlough on 12 June. Employers will then have to contribute towards the Scheme on 1 August, with the amount of those contributions increasing until the end of the Scheme on 31 October 2020.

For more information, read our latest Employment e-briefing.

Further information

If you would like more details about anything in this newsletter please speak to Natalie Barbosa, email your usual ACS contact or contact us via the ACS website.

Natalie Barbosa is a Senior Associate in the Charities and Social business team and is a specialist in fundraising law and regulation. Natalie joined Anthony Collins Solicitors from her role as General Counsel at the children’s charity, Barnardo’s, and is the Deputy Chair of the charity Animal Free Research. Out of the office, Natalie is either found volunteering with environmental and conservation organisations or scouring car boot sales for antique gems - Sherlock Holmes being her home décor style inspiration.