Charity Commission busy updating guidance
One of the Charity Commission’s key functions as set out in statute is ‘encouraging and facilitating the better administration of charities’ through various means, including guidance. 2024 has so far been a bumper year for guidance updates. To avoid any risk of missing something, here is the Mills & Reeve starter guide to everything you need to know about the Charity Commission’s updated guidance.
March 2024
Accepting and refusing donations to your charity
Long awaited guidance for charities faced with moral, tactical and legal challenges when deciding whether to accept a charitable donation. The very basic rule is “take the money” – only in very exceptional circumstances, set out in the guidance, should trustees consider refusing or returning a donation. Decisions must never be made on the basis of personal opinions or prejudices.
For a fuller analysis of the guidance, see our blog here from March this year.
May 2024
Charities and elections
The Charity Commission put together a comprehensive set of guidance, largely pre-existing, on its elections landing page in the run up to the last general election. Some new guidance for candidates wishing to work with charities was also issued. Following the election a casework summary was produced showing how the Commission prepared for the election and what sort of queries and complaints it received.
We summarise the casework here.
July 2024
Charity banking
Nearly half of all charities have had poor service from their bank in the last year. The Commission published a guide with advice about how to avoid common issues and signposting to further sources of support. For more information you can read our blog here.
August 2024
Recreation ground charities
This guidance was updated for the first time in a decade. It gives advice on common issues they may face, including the disposing of land and buildings and allowing other organisations to use the facilities.
September 2024
Decision making for trustees
The guidance has been updated, but the core 7 principles of good trustee decision making, as developed by the courts, remain unchanged. These are:
- act within their powers
- act in good faith
- be sufficiently informed
- take into account all relevant factors
- identify and disregard any irrelevant factors
- manage conflicts of interest
- ensure their decision is within the range of decisions that a reasonable trustee body could make
The guidance also makes the timely point that charities that, by necessity, used teams or zoom meetings to hold trustee meetings during the pandemic, may only continue to do so with appropriate constitutional provision. For more information, our blog here may be useful.
September 2024
Improving your charity’s finances (CC12)
As we are all too aware, many charities are currently under extreme pressure – reduced funding, increased demand for services and increased running costs. This impacts smaller charities more sharply, and some charities are having to cut back on charitable activities.
CC12 has been split into three parts. There is also a handy new checklist to assess insolvency risks. The first part is aimed at all charities. All charity trustees, irrespective of the structure of their charity, are collectively responsible for minimising the risk of their charity getting into financial difficulty. Irrespective of financial expertise, every trustee should have a clear picture of their charity’s finances so they can act on early warning indicators. The guidance sets out practical steps to improve a charity’s financial situation before it becomes insolvent. The guidance makes it clear that expert advice is essential here. Here at Mills & Reeve we agree – often insolvency practitioners can step in and save a charity from insolvency.
If there is a risk of insolvency there are two further sets of guidance for:
- charitable companies and charitable incorporated organisations; and
- unincorporated associations and charitable trusts.
These set out how to identify when your charity is insolvent, what steps to take and when you need to be in contact with the Charity Commission.
Conclusion
As you can see, there’s a reasonable of new and updated guidance. If you have any questions about anything you’ve read, please get in touch with Neil Burton [email protected].