Last week, the NHF published its final version of its new Code of Governance and made some important changes from the previous draft that will impact on those housing associations looking to adopt it.
Muslim led charities make a significant contribution to relief and development efforts worldwide, with British Muslims donating over in excess of £100 million in the month of Ramadan in recent years according to the Muslim Charities Forum. However, Baroness Warsi believes Muslim charities have been subject to an increasingly disproportionate focus from the Charity Commission since 2012.
Her comments at the NCVO annual Hinton Lecture on 21st November will ring true for many people working in Muslim charities that have in recent years faced compliance visits, statutory investigations, monitoring, frozen bank accounts and blacklisting.
For our clients working in this sector, the perception of increased scrutiny has come hand in hand with legislative changes and the implementation of the government’s PREVENT policy which places a duty on bodies such as the Charity Commission to have due regard to preventing terrorism whilst exercising its functions. In 2014 the Chair of the Charity Commission Sir William Shawcross commented:
“The problem of Islamist extremism and charities … is not the most widespread problem we face in terms of abuse of charities, but is potentially the most deadly. And it is, alas, growing.”
It is not hard to see why Muslim charities, faced with such sweeping and ill-judged assertions, feel they are perceived as suspects and held to a higher standard than other charities.
The Charity Commission, which disagrees with the Baroness’s comments, publishes a regular analysis of charities subject to compliance visits and statutory inquiries to reassure the public that its regulatory activities are even handed and no particular group is under or overrepresented.
Whilst the Charity Commission must continue to ensure there is no actual or perceived bias, the need for improved governance arrangements in the charity sector cannot be overemphasised. This requires acknowledging the need to upskill trustees who are often dedicated community activists who find themselves laden with a host of unexpected legal and fiduciary duties.
We have seen that instances of poor governance and a lack of adequate financial controls and record keeping can open the door for the Charity Commission to intervene and start a series of questions about links to alleged extremist organisations and individuals. This can be costly, time consuming and demoralising for staff and trustees even where the charity is ultimately found to be fully compliant.
One way to reduce the risk of such issues is to avoid giving the Charity Commission a reason to intervene in a charity. Trustees should seek professional advice to ensure they can easily demonstrate their decision making processes, due diligence checks and have adequate policies and procedures in place to protect the charity from fraud and abuse. For charities that are feeling the spotlight it is vital they can display their governance arrangements in a clear and indisputable manner.
Ultimately, good governance will ensure that charities are able to focus on the issues that matter to them and continue providing their beneficiaries with the services they rely on.
For advice or assistance on the issues raised in this article or any aspect of charity governance please contact Safa Murad on email@example.com or 0121 212 7433, or your usual contact at ACS.
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