Charities monthly round-up February 2023

It is important that trustees and members of charities fully understand their roles and responsibilities and how these may affect their personal lives, particularly where the charity is unincorporated. In this edition, you will find a variety of useful information and developments including the Charity Commission’s published inquiry findings for the Ashley Foundation, an update on the guidance released by the Charity Commission and information we believe will be of use to charities, trustees and the public.

Regulators urge safe giving in wake of Turkey-Syria earthquake

Following the devastating impact of the earthquakes in Turkey and Syria, the Charity Commission and the Fundraising Regulator have issued a press release urging the public to ‘give safely’. The regulators are reminding people to check that charities are registered and legitimate as people make generous donations in the increased time of need.

They also note that the Disasters Emergency Committee (DEC) has launched the Turkey-Syria Earthquake Appeal which is an alliance of 15 leading charities, aiming to raise funds quickly. Supporting charities such as the DEC can assure the public that their donations are regulated and accounted for in line with charity law.

You can support genuine relief efforts by following simple steps to check the charity name and registration number and exercise caution when responding to emails or clicking any links. Find out further tips on how to give safely to charities here.

AC appointed as interim managers of Fashion for Relief

Following a statutory inquiry opened in November 2021 into ‘Fashion for Relief’ (the charity founded by Naomi Campbell), the Charity Commission has formally appointed Edwina Turner, legal director, and Phil Watts, senior associate, of Anthony Collins as interim managers of the charity. Both Edwina and Phil are appointed to take charge of the operations of the charity following the Commission’s concerns around the charity’s financial management and governance. The Commission’s inquiry continues with further updates to be published on their website.

5-minute guides for trustees

The Charity Commission has launched the next stage of its campaign to raise awareness of core trustee duties. The Commission has developed short and engaging guidance on issues ranging from safeguarding people to managing conflicts of interest. It is intended to serve as a basic toolkit for trustees managing the demands of a charity. The full collection of 5-minute guides can be found at Advice and guidance for charity trustees – getting the most out of being a charity trustee.

The campaign is particularly aimed at supporting trustees through recent challenges raised by the cost of living crisis and fills knowledge gaps that may later lead to governance failures. It also aims to increase awareness of the existence of Charity Commission guidance, as the regulator’s Charity trustee research 2022 identified that 75% of charity trustees have not heard of the campaign, with trustees being twice as reliant on colleagues, other trustees and the internet as they are on the Commission.  

If you have any questions or concerns about the governance of your organisation or the duties of trustees, please contact Edwina Turner or another member of the charities team.

New social media guidance

The Commission has released new draft guidance on the use of social media and how a charity’s legal duties are relevant. A consultation has been opened and closes at 5pm on 14 March 2023, with feedback sought from charities, trustees, representative bodies and the public on how the guidance currently stands and how it can be improved.

Some sector figures have expressed concern over its warning around personal and private use of social media accounts and whether this has the capability to encroach ‘into the private lives of trustees, staff members and employees’. The Commission will publish an analysis of the responses and final guidance in the summer. We will cover any updates to the guidance in future editions of our charities newsletters.

Government reshuffles

Following the creation of four new Government departments and a reshuffle of ministers, Lucy Frazer has been named as the new secretary of state for the Department of Culture, Media and Sport (DCMS). Lucy is the eighth DCMS secretary of state in six years.

Formerly named the ‘Department for Digital, Culture, Media and Sport’, DCMS now no longer holds responsibility for the digital sector. Some charity leaders have responded positively to this change, stating that it may ‘be a good thing for charities’ voice in government’ as the changes allow more focus on the area of civil society.

Employment and regulatory law updates

The AC employment team has recently published two blog posts that may be of interest to charities and their HR teams in light of recent High Court and employment appeal tribunal decisions.

• Michael Brownlee’s update covers a recent High Court claim for misuse of private information, where an employee claimed that personal messages, emails and other information are private when stored on an employer’s device. Comments made by the judge in response to refusal of a strike-out application offer some guidance on this issue.
• Katherine Sinclair’s update covers a key employment appeals tribunal case which concerns an important issue of pay for part-year workers. Whilst the matter was an education case, it has ramifications for term-time or part-year workers in any sector.  

Our regulatory team has also published a blog post following a recent case relating to an organisation’s health and safety obligations under the Health and Safety at Work Act following a £400,000 fine handed to a care home provider where injuries were sustained by a child on their site. Charities may wish to take note of this and their obligations under the Act.

For any advice on employment matters related to your organisation, please contact Anna Dabek. For advice relating to regulatory matters, please contact Tim Coolican.

Cost of living continues to impact charities

A recent report conducted by Homeless Link, the national membership charity for homelessness organisations, has shown that hundreds of homelessness charities may close or reduce their services due to the impact of the cost of living crisis. Due to funding pressures and rising energy costs, a fifth of homelessness charities have already reduced their services. In the same month, the CEO of debt advice charity StepChange said the charity is preparing for a £12 million cut in their government funding, which has had a direct impact on staff cuts. It seems that across the sector there are examples of charities struggling in trying to provide further support to their beneficiaries.

Earlier this year, Orlando Fraser (chair of the Charity Commission) acknowledged, during his speech at an online event, the pressures that the sector is facing and highlighted that the rising cost of living is his ‘greatest concern for the sector’. Orlando also stated that the Commission, whilst unable to directly assist in resolving financial pressures, is committed to ‘do whatever we can within the limits of our statutory purposes to support charities at this time’.

In the January edition of the charities newsletter, we shared the Commission’s newly released cost of living guidance as well as some other resources that are available to charities. If you require any advice in relation to the impact of the cost of living crisis on your charity, please do get in touch with a member of the charities team or your usual AC contact.

Charity Commission inquiry

This month, the Charity Commission published the results of its inquiry into the Ashley Foundation. Following an initial compliance case opened in 2019, the Commission’s investigations have found (amongst other key findings) that charity funds had been used to reimburse personal expenditures and on the repair and upkeep of properties not related to the charity. It was also found that conflicts of interest were not adequately managed and the charity had also sold off several of its properties for millions of pounds before entering into disadvantageous agreements with a third party to manage them, with no legal basis to exit these agreements.

The charity’s founder, trustee and chair have each been disqualified from acting as a trustee for either a 10 or 15-year period. The case acts as a wider example to the sector that charity trustees must use their assets and funds in accordance with their charitable purposes, as well as ensure the trustee body has proper control over the administration of the organisation.

For any queries or concerns relating to these issues within your organisation or otherwise, please contact Edwina Turner.

Reminder: the spring changes to the Charities Act are coming!

Whilst we await formal confirmation as to when we can expect them, it is foreseen that more Charities Act 2022 provisions will be coming into force in spring 2023. As a reminder, some of these include:

• Disposing of charity land – simplifying the requirements for when advice needs to be obtained and extending the list of who can provide advice
• Permanent endowment – changes to the financial thresholds for charities to seek Commission consent
• Charity names – extending the Commission’s powers and potentially increasing the risk of challenge and name disputes

Further provisions are expected to come into force in autumn 2023. Any updates issued by the Government and further details on the new provisions will be covered in later editions of our newsletter.

If you have any questions about the new legislation or its impact on your organisation, please contact Edwina Turner.

For more information or advice on the topics raised in this month’s newsletter, please contact Charlie Maddox.

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