Charities monthly round-up – February 2025

Charity Commission trustee disqualification order overturned in a landmark decision

The recent charity tribunal ruling overturning the Charity Commission’s (the Commission’s) disqualification of a former trustee highlights important considerations for trustees when engaging on social media.

The tribunal found that while the trustee’s social media activity was ‘capable of damaging public trust and confidence’ in the charities he served, it did not meet the threshold for disqualification. This decision marks the first time the regulator’s disqualification order has been overturned.

What does this mean for trustees? Trustees are expected to uphold their charity’s reputation and act in its best interests (even in their personal social media activity.) This case underscores the fine balance between personal expression and the responsibilities of trusteeship.

Key takeaways:

• Trustees should be mindful that their online activity can impact public trust in their charity.
• Even personal posts may be scrutinised if they risk harming the charity’s reputation.
• Regulatory action must consider both public confidence and the individual’s overall suitability for trusteeship.

This ruling sets a precedent in defining the limits of regulatory intervention regarding trustees’ personal social media use. It serves as a reminder that while trustees have a right to personal views, they must remain conscious of the potential impact on their charity’s standing.

We expect the Commission to provide updated guidance however in the meantime, it may be worthwhile to review the existing guidance on charities and social media.

Failure to prevent fraud alert

Has your charity received an alert from the Commission about upcoming changes in fraud prevention laws? If not, it’s important to be aware of the new ‘failure to prevent fraud offence’ introduced by the Economic Crime and Corporate Transparency Act 2023 (ECCTA).

The ECCTA introduces a new corporate offence, coming into effect on 1 September 2025. This law applies to large, incorporated charities, defined as those with:

• more than 250 employees; or
• £36 million in income, or £18 million in total assets.

Under this law, charities will be criminally liable if:

• fraud is committed by an employee, agent, or associated person for the organisation’s benefit (or its clients); and
• the organisation lacked reasonable fraud prevention measures.

Importantly, directors or senior managers do not need to have ordered or known about the fraud for liability to apply.

What does this mean in practice?

• Charities should review their fraud risk policies and implement robust procedures if these are not already in place.
• Trustees must remember that they have a duty to protect charity funds, making proactive fraud prevention essential.
• Key actions to take include assessing risk exposure, strengthening internal controls and ensuring staff training on fraud prevention.

The Home Office has provided guidance on the new offence. For more information on fraud prevention, contact Natalie Barbosa or Edwina Turner.

Trustee duties: Managing conflicts of interest (and family loyalty?)

Conflicts of interest and loyalty can seriously impact a charity’s governance and decision-making. Trustees must always act in their charity’s best interests, ensuring that personal, financial, or professional connections do not improperly influence decisions.

The Commission’s recent announcement that it has opened a statutory inquiry to examine ongoing regulatory concerns regarding the trustees’ management and administration of Solev Co Limited highlights the importance of managing conflicts properly. According to the information on the charities register, three trustees serve on both charities and it appears that, until recently, all of the trustees were part of the same family. The inquiry will assess whether trustees:

• acted in accordance with their legal duties;
• ensured the trustee board was appropriately composed;
• managed finances and related-party transactions responsibly; and
• addressed conflicts of interest and loyalty transparently.

The Commission will also investigate whether any failings amount to misconduct or mismanagement. This serves as a reminder that trustees must have robust procedures in place to identify and manage conflicts effectively including:

• declaring and recording potential conflicts early;
• following a clear conflicts of interest policy to ensure transparency;
• removing themselves from decision-making where a conflict exists; and
• ensuring financial dealings with related parties are properly scrutinised.

By upholding high governance standards, trustees can ensure they act in their charity’s best interests, protect their charity’s integrity and avoid regulatory scrutiny. For a refresh on conflicts of interest, please read the Commission’s CC29 guidance for trustees.

For more information on trustee duties and conflicts of interest, please contact Sarah Tomlinson or Esther Campsall.

Charity Commission safeguarding reminder

The Commission has recently issued a letter to Diocesan Bishops who are trustees of their Diocesan Board of Finance (or other Church of England charities) as part of an ongoing review of safeguarding practices within the Church. This action follows the recommendations outlined in the Makin Review, which was commissioned to assess the effectiveness of safeguarding measures and policies within the Church of England.

In the letter, the Charity Commission re-emphasises the importance of robust safeguarding procedures and asks the trustees to confirm whether there remain any structural, procedural or constitutional arrangements under ecclesiastical law that they consider conflict with, or prevent them from fulfilling, their safeguarding duties as charity trustees following the consideration of safeguarding related business by the General Synod in February

As part of the letter, the Commission referenced its general advice and guidance regarding safeguarding responsibilities and trustee duties. Please visit the links below for information:

• The essential trustee: what you need to know, what you need to do
• Safeguarding and protecting people for charities and trustees
• Making decisions at a charity
• How to report a serious incident in your charity

For any advice on safeguarding for your charity, please contact Tim Coolican.

The Charity Commission’s priorities for 2025

As we look to 2025, David Holdsworth, chief executive of the Commission, reflected on the lessons learned from 2024 and outlined his priorities for the year ahead in his keynote speech to ICAEW Charity Conference.

1. Strengthening financial stewardship: Holdsworth emphasised that financial transparency and accountability remain a cornerstone for maintaining public trust. The Commission will continue to support charities with practical guidance, particularly around financial management, fundraising and governance.
2. Supporting charities through regulatory changes: with the sector facing new challenges, including changes to the Charities Statement of Recommended Practice, the Commission will be offering updated guidance and insights to help charities adapt to regulatory changes. The Commission’s data-led approach will provide valuable insights to further strengthen the sector’s resilience.
3. Growing the trustee community: the Commission is committed to growing and diversifying the trustee community. With the public’s high trust in charities, Holdsworth called on professionals to consider becoming trustees, bringing fresh perspectives and expertise to boards. The Commission will continue working with Pro Bono Economics to identify gaps in skills and ensure that the sector has the leadership it needs to thrive.
4. Revitalising charitable funds: in line with the success of the Revitalising Trusts programme, which has seen over £10 million recovered for good causes, Holdsworth reaffirmed the Commission’s commitment to helping dormant charitable funds make a difference and ensure that all resources are used to further charitable purposes.

Accountability of the Regulator

In January, the Parliamentary and Health Service Ombudsman (PHSO) concluded that the Commission mishandled safeguarding concerns regarding historical child sexual abuse at a school founded and run by a registered charity. The PHSO’s investigation revealed that the Commission’s actions amounted to maladministration.

Damian Murray discovered through a memoir in 2017 that a peer at his former secondary school had been abused by a headteacher and priest in the 1970s. Murray believed there were additional incidents of abuse and raised the issue with the Department for Education and the Commission from 2018 to 2020.

The Ombudsman’s investigation found that the Commission failed to properly address Murray’s concerns, acted inconsistently with its safeguarding guidelines and made unsupported conclusions.

As a result, the PHSO recommended the Commission apologise to Murray, pay him £1,000 for the injustice caused and address the identified failures.

The Commission acknowledged the PHSO’s recommendations but disagreed with certain aspects of the findings, particularly regarding the reasoning behind its regulatory decisions.

The PHSO emphasised that the Commission must take accountability and implement necessary actions to prevent similar issues from occurring in the future.

Funding opportunity for charities supporting older people

Charities advising older people are invited to apply for a share of £1.8 million from the Boosting Advice Fund, launched by Independent Age.

This fund supports organisations that help older people avoid unfair costs and access financial support, ensuring they receive the benefits they are entitled to.

Who can apply?

• Charities delivering high-quality, face-to-face advice.
• Organisations working in Newcastle, Manchester, Leicester, Glasgow, or the London boroughs of Southwark, Lambeth and Lewisham.
• Organisations do not need to currently work with older people but must have a clear plan to do so.

The funding available is £90,000–£150,000 over three years. The first round of this fund distributed £3.1 million to 19 organisations, making a real impact on older people’s financial wellbeing.

An expression of interest must be submitted by 2pm on 26 February and applications can be made here.

Share your views on improving charity governance

The Association of Chairs has launched a consultation aimed at improving charity boards and encouraging more people to become trustees. This is your chance to help shape a strategy for better charity governance. The consultation is open until 25 April and the goal is to gather 500 responses. Whether or not you have views on all aspects, your input will contribute to a collective strategy for better charity governance. Have your say.

Employment update

Our employment team are excited to announce the release of our Employment Rights Bill (ERB) Hub and subscription service, which will be of great assistance to all employers.

The ERB Hub provides a comprehensive guide to the Bill, including a breakdown of how the Bill will change current practices. It covers details on consultations, draft regulations and expected implementation timelines and links to key documents, government announcements and expert insights. The free subscription service will email you updates on the Bill, including amendments, consultations and news, along with practical guidance on how to respond. For more information on either service, contact Libby Hubbard or read her update.

Hannah Bollard explores the recent Employment Tribunal decision in the case of A Briggs v The Trustees of the National Museums of Scotland in her blog post. This case discusses underperforming employees and their unfair dismissal.

Finally, Jackie Morris explores dealing with conflicting rights in his recent blog post regarding a case where an employee claimed he had a psychic ability to predict the future and was later dismissed – is this discrimination? Find out here.

For more information or advice on the topics raised in this month’s newsletter, please contact Catherine Gibbons. Catherine is an associate working across our governance and corporate teams and advises a wide range of charities on all aspects of charity law, including governance matters, restructuring, mergers, regulatory matters and property trusts.

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