Happy New Year - our first newsletter of 2021! Throughout this year we will continue to bring you news and developments relating to the charities sector.
Though the Government is slowly lifting more lockdown restrictions, life in the UK is still very far from “normal”. Whilst it can be easy to focus on what we can’t do, it is also important to remember what we can do and what is being done.
This week, we heard about a food charity in Greater Manchester that has delivered over 930,000 meals to vulnerable people and frontline charities since the beginning of lockdown. In Birmingham, nineteen charities have been awarded the Queen’s Award for voluntary service. In addition, donations to charities working to combat the causes and consequences of racism, including Black Lives Matter UK, have now exceeded £1.5 million in less than two weeks.
All these things are evidence of the great work that charities are doing to help see us through the Covid-19 pandemic and how they continue to be relied on by the public to address need and inequality.
Catch up with all the latest charity updates in this week’s news roundup.
Places of worship to open for individual prayer
On 7 June, Communities Secretary Robert Jenrick confirmed that places of worship will be permitted to reopen for individual prayer from Monday 15 June. According to the Government’s press release, individual prayer within a place of worship is defined as “a person or household entering the venue to pray on their own and not as part of a group, led prayer or communal act. They should be socially distanced from other individuals or households.” The Government has advised that faith leaders should carry out risk assessments and has promised that further guidance will be published shortly to ensure that the reopening of places of worship is done safely.
For more information, read our e-briefing on health and safety in churches.
Extension to evictions ban announced
Charities may be on either side of the landlord and tenant relationship. As a result of the ongoing impact of Covid-19, many tenants have been unable to pay their rent. The law regarding the steps which landlords can take when tenants fail to pay the rent have been temporarily altered during the pandemic – and indeed, many landlords may also want to take a more lenient approach.
Last week, the Government announced that it had extended the current moratorium on evictions to a total of five months, meaning that eviction hearings will not be heard in courts until after 23 August. Where tenants are experiencing financial difficulties as a result of the pandemic, the Government has advised that landlords and tenants should work together to find a solution – for example, by making a flexible payment plan. The extension to the ban also applies to commercial leases.
For more information on evictions during the pandemic, read our Housing Litigation team’s e-briefing.
Charity Commission decisions
In a report published on 9 June, the Charity Commission found that the trustees of the Prince Andrew Charitable Trust breached charity law over its payment to a trustee. The trustee, who was an employee of the Duke of York’s Household from 2015 to 2020, was paid £355,297 for work undertaken for the Trust’s trading subsidiaries. The Commission found that there was no authority in the Trust’s governing document, and no authorisation for the payments had been given by the Commission or the courts – meaning that the payments breached charity law.
Last week also saw the Commission report that a Yorkshire charity had been wound up after it found trustees responsible for misconduct and/or failure to manage conflicts of interests. The Commission was particularly critical of unauthorised payments that had been made to the trustees from the charity’s funds.
Charity trustees will always need to check that their charity has the power to pay trustees (or anyone else who would be considered a connected person e.g. a relative or business) as employees or for goods or services before taking any action. If they do not have this power, they will need to seek authorisation from the Charity Commission. For further information or advice, please speak to your usual ACS contact or ask to speak with a member the ACS Charities Team.
Possible extension to registration exceptions for religious charities
Certain religious charities that are linked to organisations such as the Baptist Union, FIEC, etc. are currently ‘excepted’ from registration with the Charity Commission if they have an annual income of less than £100,000. This exception is due to end in March of 2021 but there are signs that it may be extended in light of the current pandemic, its impact on churches and also the additional pressure on Charity Commission resources.
If you are currently an excepted charity and would like further information or advice on preparing for registration with the Charity Commission, please speak with a member the ACS Charities Team.
Coronavirus-related funding for charities
Pro Bono Economics has estimated that charities will face a £10.1 billion funding gap over the next six months, as sector-wide income is expected to drop by £6.7 billion, whilst demand for services rises to £3.4 billion. With this in mind, we have gathered together the latest available funding for charities:
- Christians Against Poverty have highlighted resources for churches, both to help others with financial problems and for church leaders who themselves might be facing financial difficulties.
- Locality also has a great list of both national and regional funding available to charities during the pandemic.
- Emergency loans are being provided by Big Society Capital for charities and social enterprises, whilst NatWest are offering a ‘Bounce Back Loan’ for small businesses, which is interest-free for the first twelve months.
According to an analysis from Charity Financials, the number of charities that ceased to exist after the last recession reached 12,300. The analysis found that small charities were hardest hit: charities with an income of under £100,000 made up 90% of the organisations that closed in 2009. Due to Covid-19, many charities are now worried about the sustainability of their income streams and are looking for alternative ways to make sure that their causes can continue to be supported in the future. One way to tackle this problem may be to consider a collaboration, asset transfer or joint venture. These options can allow organisations to acquire better financial support, increase their impact and further their charitable or social mission. If you are interested in any of these options for your charity, please get in touch with the ACS Charities Team.
If you would like more details about anything in this newsletter, please speak to Catherine Gibbons, email your usual ACS contact or contact us via the ACS website.
Catherine Gibbons is a Solicitor in the Charities and Social Business Team and specialises in charity governance (particularly faith-based charities), incorporations, mergers and regulatory issues. ‘Out of the office’ during lockdown, Catherine has enjoyed the many available online theatre and musical productions, joined a virtual choir and (to her surprise) become a little more green-fingered!
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