As the adage goes, Christmas appears to come earlier each year and we at Anthony Collins are not immune to the ‘Christmas creep’. With all members of our team busy drafting their letters to Father Christmas in December, this will be our last edition of the charities newsletter before the new year!
As we draw 2023 to a close, the charity sector shows no sign of slowing down. With the Department for Culture, Media and Sport announcing that the next stage of implementation of the Charities Act 2022 has been delayed from December 2023 to early 2024, and many charities celebrating Trustees Week 2023 in November, there has been plenty to keep us all occupied. Now is your chance to sit back and catch up on all the updates in the sector this month.
From all of us at Anthony Collins, we wish you a happy and peaceful Christmas and New Year.
Charities issue joint letter on Gaza conflict
A coalition of 12 UK charities, including Oxfam GB, Islamic Relief, and ActionAid UK, has issued a joint statement urging the UK Government to advocate for a de-escalation of conflict and delivery of emergency aid to Gaza. The statement noted the devastating effects of the evacuation order for northern Gaza and stressed the need for an end to the escalating conflict. Stemming from reports that a blockade of the Gaza Strip has been impeding the delivery of essential aid, the charities called for the UK Government to ‘use its influence to ensure international humanitarian law is upheld’.
Readers will no doubt be aware that several charities, including the British Red Cross, Islamic Relief, and Oxfam, have initiated fundraising appeals to fund aid being sent to the region. However, in their joint statement, the charities called on the UK Government to ensure measures were taken to protect civilians from military action.
Charity Commission guidance on how to help civilians impacted by the Israel-Gaza conflict
The Commission has issued guidance on how individuals can aid civilians affected by the ongoing conflict. Given the complications which have been faced by those delivering aid to the region (see above), the regulator has emphasized the importance of individuals supporting legitimate relief efforts and has encouraged donors to back established, registered charities that are experienced in responding to crises of this nature and operating in conflict zones.
The Commission has compiled a list of steps individuals should take before making donations. These steps include verifying the charity’s registration and exercising caution with informal appeals. The Commission has also urged those who wish to set up new charities to carefully consider the legal responsibilities involved with the operation of a charity and the potential effectiveness of contributing to existing appeals.
Charity Commission inquiry into financial mismanagement
The Commission has published its decision from a statutory inquiry into a Birmingham-based education charity. The inquiry into the Birmingham Education Trust discovered significant shortcomings in the management of the charity, particularly in relation to financial controls and record keeping. Registered in 1997, the charity originally had two trustees who were a married couple. It was discovered during the inquiry that a family member of the couple had been appointed as a third trustee but it appeared that he had no active involvement with the charity.
Despite receiving advice from the Commission on several occasions, the trustees failed to file annual accounting information with only one annual return having been submitted in the charity’s 23 years. Further breaches of their obligations as trustees had been committed when the couple failed to manage conflicts of interest appropriately and jeopardized charitable funds due to insufficient record-keeping. As a result of the findings of the inquiry, the trustees were removed from their positions and were disqualified from acting as trustees of a charity.
The case serves as a reminder of the importance of trustees understanding and fulfilling their duties and responsibilities under charity law and ensuring the proper administration of their charities. If readers require any further information or guidance on these issues please contact Phil Watts or your usual AC contact.
Charity Commission working on guidance for accepting or refusing donations
During a lecture delivered at the University of Kent earlier this month, the Commission chair indicated that there may be a renewed focus on charities refusing donations where the decision-making on such refusals is ‘materially irrational’. Announcing that the Commission is working to develop and update guidance on accepting and refusing donations, Orlando Fraser KC emphasised that whilst the Commission largely respects trustees exercising their discretion it may intervene where the motivation for a refusal of a donation is not in the best interests of the charity. Fraser pointed to an example of trustees refusing a donation due to their own personal worldviews or preferences.
In his speech, Fraser highlighted that there were still many occasions where it would be inappropriate for charities to accept donations, such as instances where accepting donations might lead to reputational damage. However, the speech has received some criticism from individuals in the sector who are concerned about the rhetoric of this statement. Many have questioned whether there was any indication that irrational refusals of charity donations have been a major issue within the sector such that further guidance on the matter should be necessary.
Readers should be aware that further updated guidance is likely to be issued on the matter by the Commission. If readers require any further information or guidance on fundraising, accepting or refusing donations, please contact Natalie Barbosa or your usual AC contact.
House of Lords inquiry
A cross-bench peer has been suspended for a month following an investigation by the House of Lords Commissioner for Standards. During their investigation, the Commissioner found that Robert Skidelsky had breached the code of conduct for members of the House of Lords when conducting his role as chair and trustee of the Centre for Global Studies. In particular, the Commissioner found that Skidelsky had failed to register and declare an interest related to the charity, and raised concerns regarding the charity’s association with sanctioned donors. The investigation also found that there was no clear distinction between the work conducted by the Centre for Global Studies and Skidelsky’s parliamentary role.
The inquiry came about as a result of a disclosure of information received by the House of Lords from the Commission. Under s.56 of the Charities Act 2011, the Commission may disclose information to any public authority where they believe this information will assist the public authority in discharging its functions. This matter serves as an important reminder that the Commission can act as a ‘whistleblower’ when they receive information relevant to other public authorities.
The Commission launched its own inquiry into the charity in May 2023 following concerns regarding potential conflicts of interest and unauthorised benefits being made to the trustees. Our own Edwina Turner and Sarah Tomlinson were appointed by the Commission to act as interim managers of the charity, and the investigation is ongoing.
For any assistance in relation to Commission inquiries, please contact Edwina Turner, Sarah Tomlinson, Phil Watts or your usual AC contact.
Court of Appeal ruling on the use of charitable funds
The Court of Appeal has upheld a ruling from the High Court that a fund worth £550m cannot be distributed for general charitable purposes.
Established with an endowment of £500,000 in 1928, The National Fund was founded with the intention of accumulating income until such time as it was sufficient to pay off the UK national debt. Despite the fund growing substantially since 1928, eventually reaching £550m in 2021, the current national debt stands at approximately £2.6tn. The High Court was asked to make a cy-près scheme allowing the fund to be redirected to alternative charitable purposes. The trustee of the fund sought a scheme which would allow the sum to be used for general charitable purposes, while the Attorney General sought a scheme allowing the fund to be applied to the national debt. The Court of Appeal upheld the High Court’s ruling in favour of the scheme proposed by the Attorney General.
The ruling has disappointed those who feel that the money would be better applied to other charitable purposes, particularly as the total sum of the fund pales in comparison to the current national debt. However, the case has provided an opportunity for the courts to clarify the approach they will take when asked to make cy-près schemes.
If your charity requires any advice or assistance with cy-près schemes, you can contact Catherine Gibbons or your usual AC contact.
Employment update
Our employment team has published a number of interesting blog posts recently which might be of interest to readers:
- Hannah Bollard discusses the possible impact resulting from the change in rehabilitation periods under the Rehabilitation of Offenders Act 1974 in her recent blog post. Hannah notes that although the change will mean that convictions become spent sooner the impact on recruitment to roles which involve working with vulnerable adults and young people will not change significantly. In a second blog post, Hannah discusses the Government’s response to the consultation on holiday pay and entitlement.
- Sarah Harnett explores the recent case of MXX v A Secondary School in her blog post. Centring on whether a school can be held vicariously liable for the actions of a work experience student, the matter highlights that the link between employers and work experience students ’might be stronger than either party thought’.
For any advice on employment matters related to your organisation, please feel free to contact our employment team.