The Law Commission published its report on Technical Issues in Charity Law in September 2017 following a public consultation.
With lockdown restrictions further lifting on 4 July, charities have a lot to think about to ensure the safety of their service users, volunteers and members of the public. Guidance has been updated and issued to assist charities to adapt to the ‘new normal’.
Some charities will have to give a more in-depth consideration to their governance as last week the Charity Commission wrote to 600 of the country’s largest charities warning them about the risks of weak governance.
This warning from the regulator coincided with its publishing of the inquiry report into the Royal National Institute for the Blind, which criticised the governance of the charity. The report found that there were problems with its “broader corporate governance, which did not adequately address the complexity, scale, nature and associated risks of the charity’s activities and disparate group structure.”
The communication is aimed at those charities which have an income of over £9m pa and a complex governance and management structure, and which have frontline staff who interact with service-users, some of whom may be vulnerable.
If you are concerned that this applies to you (even if your income is less than £9m pa) please do get in contact with us. We can work with you to review your governance structure and ensure it complies with the Commission’s advice and recommendations.
In the meantime, catch up with all the latest charity updates in this week’s news roundup.
Government updates: guidance for the charity sector
On 26 June 2020, the Government updated its guidance for the charity sector. The guidance covers a variety of topics ranging from government financial support for charities to understanding whether your charity can help with the coronavirus efforts.
The recent change to the guidance updated the information for charitable companies and CIOs on new laws affecting members’ meetings and insolvency. The provisions are set out in the Corporate Insolvency and Governance Act 2020 and came into effect on 26 June.
The new provisions cover:
- Limiting termination clauses in supply contracts;
- Temporary suspension of wrongful trading provisions;
- Temporary suspension of the use of statutory demands and a restriction on winding up petitions;
- Support for viable companies struggling with debt to restructure under a new procedure (not applicable to CIOs).
New Government guidance for safe use of places to worship during Covid-19
The Government has issued new guidance for the safe use of places of worship. This will come into effect from 4 July 2020 and includes guidance in relation to communal worship, marriages and funerals.
Separate guidance for small marriages and civil partnerships has also been published.
For more information, read our e-briefing on Weddings, Funerals and Covid-19.
Fundraising can resume - sensitively, safely and responsibly
On 25 June 2020, the Fundraising Regulator, in conjunction with the Institute of Fundraising, published guidance on fundraising during the current pandemic. The two resources making up the guidance consist of a guide to the key principles that should be applied to all fundraising methods and the other is specific advice on public fundraising.
The important messages to come out of the two guides are that fundraising should be carried out in a sensitive and safe way, protecting both fundraisers and members of the public. It is important to keep up to date with local guidance as it differs across the UK. Fundraising organisations should undertake risk assessments and carefully consider the risks associated with each type of fundraising activity they carry out.
Charities propose Gift Aid reform to relieve financial pressure created by the coronavirus crisis
A group of charities led by the Charities Aid Foundation, the Institute of Fundraising, the Charity Financial Group, the Charity Tax Group and NCVO has asked the government to change the effective tax rate applied to Gift Aid from 20% to 25%. This would unlock an additional £450m per year for charities.
The change would be temporary and would run for 2 years from the beginning of the 2020-2021 tax year.
They also propose permanently lifting the cap on donations eligible under the Gift Aid Small Donation Scheme from £8,000 per year to £10,000.
Covid-19 exposes pre-existing inequalities
An article produced by FaithAction found that the coronavirus has exposed, rather than caused, wide inequalities in our society. “The Statistics released by the Office for National Statistics (ONS) on 12th of June demonstrated that, between March and May, the mortality rate from COVID-19 in the most deprived areas of England was more than double the mortality rate in the least deprived.”
This is worrying and highlights the importance of charities and the work that they do as often service users come from deprived areas.
Enforcement undertakings accepted by the Environment Agency - a brave new world?
Environment Law Monthly recently reported on businesses which committed pollution offences and gave undertakings to the Environment Agency to improve their practices and donate to environmental charities.
In Transparency Data issued on the Government’s website, it is set out that an Enforcement Undertaking (‘EU’) is a voluntary offer made by the offender to:
- Put right the effects of their offending;
- Put right the impact on third parties;
- Make sure it cannot happen again.
An EU will only be accepted where:
- It is not in the public interest to prosecute;
- The offer itself addresses the cause and effect of the offending; and
- The offer protects, restores or enhances the natural capital of England.
Could this open the door to other legislation allowing similar charitable donations? For example: cruelty to animals – a payment to an animal charity; food hygiene breach – a payment to a food bank; breach of regulations regarding houses of multiple occupation – a payment to a charity helping the homeless?
For more information
If you would like more details about anything in this newsletter, please speak to Edwina Turner, your usual ACS contact or contact us via the ACS website.
Edwina has 17 years of experience helping charities in relation to governance issues; everything from mergers, restructures and group structures through to serious incident reporting and interim manager appointments. Whilst working from home during the last 3 months, Edwina has rediscovered the joy of cycling and growing (huge!) amounts of salad. Living in inner city Birmingham, her aim for July is to get to the coast and once again see and smell the sea.
Changing charitable purposes and amending governing documents.
Charity registration financial thresholds.
One of the stated aims of the Green Paper is “to deliver the best commercial outcomes with the least burden on the public sector".
The proposals concerning dynamic purchasing systems (DPS) and framework agreements are the most disappointing aspect of the Green Paper.
Family team partner, Elizabeth Wyatt, is delighted to congratulate Kadie Bennett for attaining Resolution Specialist Accreditation in both children law - private and complex financial remedy matters.
On 11 February 2021, the Pension Schemes Act 2021 was given royal assent, setting out a framework for several major changes that will certainly be of interest to employers and pension funds alike.
Matthew Wort, partner, speaks on today’s Supreme Court judgment for sleep-in shifts.
The Supreme Court has today (19 March 2021) handed down judgment in the cases of Royal Mencap Society v Tomlinson-Blake and Shannon v Rampersad (t/a Clifton House Residential Home).
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