Charities monthly round-up 33

Welcome to our June newsletter.

Welcome the June edition of our newsletter, written whilst the sun is still shining but the thunderstorms are looming! Please see below our charity news highlights for this month including some relevant updates from other areas of the firm, updated guidance for you to be aware of, some recent inquiries of the Charity Commission, legislation updates and some top tips on information and potential funding available to charities – enjoy! 

Regulatory crises and reputation – how can charities manage the risks
Regulatory crises can easily crush a charity’s reputation and affect its chances of long-term survival, so charity leaders must be aware of the risks relevant to their charity and know how to manage them. Our regulatory team have written an ebriefing containing several case studies around safeguarding and other regulatory risks, identifying some key lessons that can be learned both in the charity and education sectors. There are also some practical steps that organisations can take to improve safeguarding provisions.

If you would like advice on safeguarding or regulatory issues, please contact Freya Cassia in our regulatory team or your usual ACS contact.

FaithAction national briefing
FaithAction held an online national briefing for faith communities on 16 June 2021 which included speakers from the British Islamic Medical Society and the Association of Directors of Public Health.

There was a clear consensus that faith groups had responded well to the effects of the pandemic and, as a result, are viewed more positively by the wider public. However, the key message from the briefing was that faith communities should not drop their guard as restrictions begin to lift.

In particular, the view was that faith communities should not be commencing their normal activities just because they can. The advice for leaders of places of worship was to start by considering, on a case-by-case basis, whether an activity is safe (by continuing to check if Covid-19 cases are rising, carrying out risk assessments and speaking with public health officials) and then considering the Government’s guidance to see whether the activity is lawful. Faith leaders will also have a role in educating their communities in the months to come. The aim should be to engage with faith communities and explain that, even though they may be allowed to commence certain activities, it does not mean that this is the safest course of action.  

Whistleblowing: what you need to know
‘Whistleblowing’ often conjures up visions of news reports of disgraced organisations and the tragic stories of the victims and can in turn mean that the mere mention of this triggers panic. This should not be the case, it should enable people to speak up about concerns before they escalate and an effective whistleblowing policy should assist this. Our employment and pensions team have answered some key questions and offer some practical solutions in their recent ebriefing.

If you would like further advice, please get in touch with our employment and pensions team or your usual ACS contact.

Places of Worship guidance update
For England: With the restrictions set to continue for another four weeks, the provisions for places of worship remain under Step 3, which means:

• since 17 May 2021, funerals have had no legal cap on the number of attendees. Instead, the number will be determined on how many people the venue or space can safely accommodate with social distancing in place;
• from 21 June, there will no longer be a maximum number cap for attendees to wedding and civil partnership ceremonies and receptions. As above, the number is determined by the venue and social distancing capacity; and
• support groups like parent and child groups now have a limit of 30 people, not including children under five years old.

For more information, see the full guidance for England here.

For Wales: Wales moved to Level 3 restrictions from 17 May allowing organised group activities for up to 30 people to be held indoors or 50 people outdoors. These restrictions do not apply to religious services, provided that the service is held indoors, in premises ordinarily used for that purpose. For full guidance see the Welsh Government website.

Updated guidance on volunteering during the pandemic
On 17 May the Government updated its guidance for organisations and groups in England on how to safely involve volunteers in their work. While the guidance to volunteer from home where possible remains in place, it now allows for those who don’t need to self-isolate to volunteer outside their home.

Further, groups organised on a formal basis to provide mutual aid, therapy or other types of support can now continue with up to 30 participants. This limit does not include children under five who are accompanying a parent or guardian or those working or volunteering.

Charity inquiry following failure to protect charity land
The Commission launched a statutory inquiry into The National Equine Training Trust last year after discovering that the charity still owned a piece of land in Kent. The charity was removed from the register in 2013 after it was found to be inactive and trustees had failed (in breach of their obligations) to file annual returns or to respond to attempts to contact them.

The Commission intervened to protect the piece of land after the neighbour of the property claimed to have been using the land for several years and filed an adverse possession claim to take ownership of the land. The Commission exercised its powers to appoint new trustees and remove the remaining inactive trustees who had failed to engage. The charity has now been re-registered.

This serves as a useful reminder, that trustees are under a duty to act in the best interests of the charity and must protect charity assets. If a trustee is no longer able to carry out their duties, they should retire or be removed in line with the provisions in the charity’s governing document, and be replaced.

Legal duties of trustees
Another Commission inquiry into the running of a charity highlights the broader issues that may have relevance for other charities. Here, the trustees of the Nanaksar Thath Isher Darbar Trust were found to have submitted accounts and statements to the Commission which contained a number of inaccuracies and misleading statements regarding the charity’s activities. Further, the trustees had failed to understand the terms and conditions of a £3m loan thus accruing interest charges at a significant rate.

Just by way of reminder – trustees are under a legal duty to submit annual reports and accounting documents depending on the charity’s level of income. Failure to do so is a criminal offence. Trustees must also ensure that there are sufficient financial safeguards in place to protect charity funds when borrowing money. As a minimum, an agreement should be entered into, detailing the terms of the loan and its repayment. It is the responsibility of the trustees to understand those terms, ensure that they are appropriate and taken advice as needs.

Charities Bill introduced to Parliament
Following the publishing of the Government’s long-awaited response to the Law Commission’s Technical Issues in Charity Law report, the Bill has now been introduced to Parliament. For an in-depth look at the proposed charity law changes, please see our series of ebriefings – Everything’s changing in charity law.

Counter-terrorism legislation
The Government has updated its guidance on the Commissions compliance toolkit, providing advice and information in relation to UK counter-terrorism legislation, how it may affect charities and their work, explains the various ‘terrorism lists’ that exist and advises trustees what to do if they discover that their charity may be working with or connected to people or organisations on terrorism lists. For more information, see here.

Good news for social enterprises
Social enterprises have been told that the reforms to the dormant assets bill will bring ‘significant’ benefit to enterprises. New legislation would expand the current scheme which uses unclaimed assets from banks and building societies to support good causes.  The legislation is set to include assets from insurance, pensions and securities in the near future, estimated to bring another £800m in resources. Much welcomed good news for many organisations, particularly those that have been stretched during the pandemic.

A free guide to borrowing for charities
CAF Bank has created a guide providing advice on the different types of repayable finance available alongside stories of how organisations with a social purpose have used a loan to advance their missions. You can download it here.

Deutsche Bank UK Charity of the Year
Applications are now open for Deutsche Bank’s UK Charity of the Year 2022-23. Aimed at organisations that are able to demonstrate a clear link to mental health alongside other eligibility criteria. Applications close on 28 June. Get in quick!

Nationwide Building Society grant fund
Nationwide have launched a new £4m Community Grants programme; a chance for local organisations with great housing solutions to apply for grants of up to £50,000 to help tackle the housing crisis. For more information or to apply for a grant, click here.

For more information

If you would like more details about anything in this newsletter please speak to your usual ACS contact or contact Sarah Patrice.

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