Our Charity News offers the latest updates on guidance
and support for the not-for-profit sector, highlighting new
guidance issued by charity regulators. We also explore the effects
of recent legislative changes, reporting obligations, tax updates
and other key issues, providing insights into the sector’s most
important topics and current guidance.
The newsletter is applicable to the whole of the United Kingdom
and makes reference to the three UK charity regulators:
- the Charity Commission for Northern Ireland (CCNI);
- the Office of the Scottish Charity Regulator (OSCR) and;
- the Charity Commission for England and Wales (CCEW).
All the articles may be of interest; however, to aid you we have
included the following key:
Hot topics
Whistleblowing disclosures made to the Charity
Commission
The Charity Commission has published a report on whistleblowing
the disclosures made between 1st April 2023 and 31st March 2024,
the report outlines the trends and actions taken based on
whistleblower complaints. The Commission received 561 disclosures,
marking a significant 72% increase compared to the previous year.
This rise is attributed to the increasing financial pressures on
the charity sector, among other challenges.
The disclosures were primarily made by individuals either
working for or formerly employed by charities, with key concerns
focusing on governance issues, safeguarding failures, financial
mismanagement and charity leadership. Governance concerns, such as
trustees not fulfilling their roles properly, accounted for 56% of
all disclosures. Financial mismanagement and safeguarding were also
prevalent, with each making up 13% and 10% of the total
respectively.
The Commission took regulatory action in 84% of cases, which
could include opening compliance cases, issuing advice, or working
with charities to ensure compliance with charity law. In some
instances, further investigations were conducted, or more stringent
enforcement measures were adopted.
The report also highlights the importance of these disclosures
in identifying issues early on and addressing systemic risks in the
charity sector. As part of its strategic objectives, the Charity
Commission emphasises the need for effective whistleblowing
frameworks within charities themselves, encouraging workers to
raise concerns internally before escalating them to the
Commission.
The data gathered in the report helps inform the
Commission’s ongoing efforts to safeguard the public interest,
maintain trust in charities and ensure that charities fulfil their
legal duties.
Guidance: https://bit.ly/3YiRGPc
Research and analysis on Trustee confidence
In September 2024, the Charity Commission published the results
of its research into trustee confidence and attitudes towards
governance. The results highlight key areas of insight in their
role including decision making and conflict management.
Trustees are confident in their responsibilities to protect
their charity and beneficiaries from harm. The report revealed that
70% of trustees feel very confident in making decisions. They
generally understand how to make important decisions, such as
assessing costs and considering different perspectives. However,
they are less certain about what actions to avoid, such as evading
difficult questions or allowing personal opinions to influence
decisions.
This confidence and understanding are more pronounced among
experienced trustees and those with greater interaction with the
Commission. Overall, trustees hold a positive view of the
Commission’s capabilities and fairness, which is further
enhanced by increased engagement. While perceptions among trustees
who do not interact with the Commission are not negative, they do
reflect a lack of awareness about its functions.
Discussions in focus groups revealed that some trustees desire a
more collaborative relationship with the Commission and better
guidance on current issues, such as banking. The primary challenge
is to raise awareness and change perceptions among trustees who do
not recognise the value of directly engaging with the Commission.
Suggestions from focus groups aim to encourage greater interaction
in this regard.
Guidance: https://bit.ly/4e5bbAq
Scottish Charity Regulator – Sector overview report
The latest Sector Overview Report from the Scottish Charity
Regulator (OSCR) offers a comprehensive snapshot of the charity
sector in Scotland.
The latest Sector Overview Report from OSCR, covering April to
June 2024, provides key insights into Scotland’s charity
sector:
- 212 new charities were registered, while 215 were removed from
the Register during the same period. - 7,129 charities have an annual income of less than
£5,000, making up almost one-third of all Scottish
charities. - Charities with an income of £500,000 or more represent
just 7% of the total number of charities, but they account for
around 92% of the sector’s overall income. - The most common charitable purpose is “the advancement of
education,” with 51% of charities identifying it as one of
their goals.
These figures highlight the financial disparities within the
sector, with a small percentage of charities managing most of the
income.
Guidance: https://bit.ly/48l1SLr
Review of the Code of Fundraising Practice
In early 2024, the Fundraising Regulator updated the Code of
Fundraising Practice based on feedback. A final eight-week
stakeholder engagement phase began in September 2024, allowing
comments on the new draft code until 1 November 2024. The final
version of the code will be published in early 2025, along with an
implementation timeline. This is the last step before the
Code’s official launch.
The Code of Fundraising Practice sets the standards for
fundraising by all charitable organisations and third-party
fundraisers across the UK. The review is being carried out to
ensure the code continues to provide an effective regulatory
framework, both now and in the future.
Guidance: https://bit.ly/3Yzu61U
Guidance: https://bit.ly/3NEcwU5
The King’s Speech 2024
The King’s Speech for the new Labour government outlined the
draft laws the government plans to introduce, reflecting their
priorities, particularly those outlined during the general election
campaign.
Here’s a summary of the key points relevant to charities and
voluntary organisations:
Included in the Speech
- Devolution: An English devolution bill will transfer more
powers to local communities, affecting skills, energy, planning and
transport. - This will be crucial for local voluntary organisations to
foster strong relationships. - Mental Health Act Reforms: Aimed at giving individuals more
choice and reducing racial disparities in mental health detention,
which will be of interest to mental health charities. - Ban on Conversion Therapy: A new bill will completely ban
conversion therapies for LGBTQ+ individuals, a significant win for
LGBTQ+ and human rights charities. - Violence Against Women and Girls: A crime and policing bill
will address violence against women and girls with measures such as
specialist rape courts and increased police powers. Charities
supporting women and girls should stay informed. - Net Zero Goals: A Great British Energy Bill will establish a
public company for renewable energy investments and the end of the
onshore wind ban will support climate goals. - Tax Relief for Private Schools: The government plans to remove
tax reliefs for private schools, which could impact charitable
educational institutions. - Employment Rights: An employment rights bill will include
measures like immediate parental leave and sick pay, potentially
increasing staff costs for voluntary organisations. It will also
protect equal pay rights for marginalised groups. ” Democratic
Change: A House of Lords reform bill will address hereditary
peers’ rights and might include measures to strengthen election
integrity and participation.
Guidance: https://bit.ly/40i8ZlO
Refreshed guidance on decision-making for charity trustees
(CC27)
The Charity Commission’s updated guidance on decision-making
for trustees (CC27) seeks to improve clarity and accessibility
while preserving the core principles that trustees must follow when
making decisions. The revised guidance is shorter, written in plain
English, and focuses on practical steps to ensure trustees make
sound, lawful decisions that serve the best interests of their
charity.
The update retains the original seven key principles, now
presented in a more concise and user-friendly format:
- Act within your powers: Trustees must ensure
that any decision they make is within the limits of the
charity’s governing documents and aligns with its charitable
purposes. Understanding and following the charity’s
constitution and relevant laws are fundamental to this
principle. - Act in good faith: Trustees should prioritise
the charity’s interests over personal or outside interests.
Decisions must always be made in the best interests of the charity,
without personal bias or influence. - Being sufficiently informed: To make informed
decisions, trustees must gather relevant information, research and
seek advice where necessary. This can include consulting
stakeholders and obtaining professional input. Trustees must
understand the implications of their decisions, including
financial, legal and reputational risks. - Take account of all relevant factors: Trustees
must consider all factors that could impact the charity, such as
its objectives, available resources and the potential effects on
stakeholders and beneficiaries. This includes weighing the risks
and benefits of different options. - Identify and disregard any irrelevant factors:
It is critical for trustees to identify and exclude factors that
should not influence their decision, such as personal relationships
or unrelated issues. Trustees should ensure that decisions are free
from bias or external pressures and are grounded in the
charity’s best interests. - Manage conflicts of interest: Trustees must
actively manage conflicts of interest. When conflicts arise,
trustees should declare them and take appropriate steps, such as
recusing themselves from decision-making where necessary. Properly
handling conflicts helps maintain trust and objectivity. - Make decisions that are within the range of decisions a
reasonable trustee body could make: Trustees must exercise
reasonable care and skill when making decisions, ensuring they are
acting in line with their duties. This includes considering risks,
seeking professional advice when needed and ensuring their decision
falls within what a reasonable body of trustees would consider
acceptable.The updated CC27 guidance also focuses on improving collective
decision-making among trustees and emphasises the importance of
maintaining good governance. The goal is to provide trustees with
practical advice to make effective decisions, ultimately
strengthening the governance and operational success of
charities.
Guidance: https://bit.ly/4dZCUCG
Guidance: https://bit.ly/3YBnpfC
Regulatory Alert – local authorities as charity
trustees
David Holdsworth, the new Chief Executive of the Charity
Commission, has recently written to local authorities regarding
their responsibilities as charity trustees. His letter highlights a
concerning rise in cases where local authorities have mishandled or
improperly disposed of charitable assets, such as land and
buildings. This mismanagement can lead to significant legal and
administrative complications.
Key points from the letter include:
Asset Review: Local authorities are urged to
review their asset registers to clearly identify charitable assets,
ensuring clarity about which assets are governed by charity
law.
New Formal Guidance: The letter also emphasised
the importance of adhering to new formal guidance designed for
local authorities. This guidance covers:
- Trustee responsibilities
- Handling conflicts of interest
- Filing requirements
- Rules for disposing of charitable land
Councillor Guidance: A shortened version of
this guidance has been produced for councillors and should be
distributed to elected representatives.
Additional Resources: A recommendation to
review the new guidance on recreation ground charities, which
addresses common issues faced by trustees and offers practical
advice on recruitment and fundraising.
Guidance: https://bit.ly/4fiTlLn
Guidance: https://bit.ly/48nq9kj
Exploring the world of Artificial Intelligence
(AI)
In our last edition, we discussed how there are mixed views of
AI in general and in the Charity sector, and also pointed out how
charities can seek help and guidance from the Charity Excellence
Framework on how to prepare for AI.
In the Summer, the NCVO and Microsoft UK shared findings from
their recent AI event, specifically drawing on the shared
challenges charities face in respect to AI but also how AI can
unlock potential to boost the impact charities can make.
Specifically focusing on how AI can be utilised by smaller
charities, insights from a keynote speech at the event
included:
- Writing funding bids;
- Writing meeting minutes;
- Generating digital content.
A point which highlighted how to move forward with AI was to
build knowledge. It was reported at the event that, in a survey,
35% of respondents indicated a need for training to upskill with
AI, while 60% reported poor skills and capacity to engage with
emerging tech trends.
Guidance: https://bit.ly/3Alc0Hu
Misinformation spreading across social media
Charities face a significant challenge when it comes to tackling
misinformation on social media. As digital platforms become the
primary source of information for many, false narratives can easily
distort public perception of charity initiatives and damage the
trust these organisations rely on to fund their work. Based on
insights from the National Council for Voluntary Organisations
(NCVO) and the Charity Commission, here are key strategies that
charities can adopt to combat misinformation:
Proactive Communication
Charities need to take a proactive approach to communication. By
frequently posting accurate, transparent updates about their
activities, charities can stay ahead of potential misinformation.
NCVO suggests that charities should clearly communicate their
values, mission and impact to ensure supporters have easy access to
accurate information. This helps build trust and makes it harder
for falsehoods to take root.
Engaging with Audiences
Engaging directly with followers and the broader public on
social media is essential. This means responding to questions,
correcting inaccuracies and showing a willingness to listen. Open
dialogues with followers can help dispel false information before
it spreads. In the context of the recent riots in England, both the
NCVO and the Charity Commission emphasised how vital it is for
charities to engage their communities during times of crisis,
offering support and factual clarity.
Building Partnerships
Working collaboratively with other organisations can strengthen
a charity’s response to misinformation. The government and
civil society leaders often encourage partnerships, as demonstrated
in responses to public disorder situations like the England riots.
Charities can form alliances with trusted bodies to amplify the
reach of accurate information and ensure that their messaging has
more credibility.
Monitoring Social Media
Constantly monitoring social media platforms is crucial.
Charities should actively track mentions of their organisation or
causes, keeping an eye out for misinformation. Tools like social
listening software can help identify false narratives early,
enabling charities to correct them before they spread further.
Rapid Response Mechanism
When misinformation surfaces, a quick response is critical.
Charities should have a crisis communication plan in place that
outlines how to respond to false claims, including designated
spokespeople, key messages and a strategy for communicating across
multiple platforms. NCVO highlights that an effective crisis
response is a key part of maintaining public trust, especially when
misinformation could lead to reputational harm.
Educational Campaigns
Charities should invest in educational campaigns to raise
awareness about misinformation itself. Educating the public on how
to identify false information and where to find reliable sources
can have a long-term positive impact. Providing followers with
tools to verify facts empowers them to make informed decisions and
reduces the chances of them being misled.
By implementing these strategies, charities can mitigate the
impact of misinformation and continue to focus on their vital work
without distractions from falsehoods. Accurate, transparent and
proactive engagement with the public, along with a robust crisis
management plan, will help protect the credibility of charity
organisations in the digital age.
Guidance: https://bit.ly/3YFKNrt
Guidance: https://bit.ly/3ApbGYe
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