Annual Charity Seminar 2016

WELCOME TO THE
THOMAS WESTCOTT
ANNUAL CHARITY
SEMINAR 2016
Axminster · Barnstaple · Bideford · Bridgwater · Burnham on Sea · Crediton · Exeter · Holsworthy · Honiton · Ilfracombe
· Langport · Okehampton · Plymouth · Seaton · Somerton · Tiverton · Torquay · Weston super Mare

Lyme Regis Museum
The Mary Anning Wing

Lyme Regis Museum
Lyme Regis Museum was built in 1902 on
the site of the home of Mary Anning, the
world’s first great fossil hunter and early
scientist.
The museum’s collections are varied and
cover:
• Lyme’s important role in the birth of the
science of palaeontology
• Lyme’s literary connections – John
Fowles, Jane Austen and latterly, Tracy
Chevalier
• The birthplace of Thomas Coram –
founder of England’s first charity, ‘The
Foundlings Hospital
• George Somers and the founding of the
Bermuda – and much else!

What we are and
what we do
Our museum has been in operation since
1921 and became a charity in 1993.
• We collect, display and conserve Lyme’s
history
• We make the collections and their
stories accessible to our visitors in the
museum and on-line
• We run a wide range of educational
activities, including fossil walks and a
wide range of education sessions for
schools, universities and adults
• We offer many opportunities for people
to enhance their lives through
volunteering at our museum

The Mary Anning
Wing Programme
We have identified that for our
museum to thrive in an age where
local government support is likely
to significantly decline it needs to
become self-sufficient.
The Mary Anning Wing will provide
the services we lack – a new
class/function room, bigger shop,
lift loos and a redesigned fossil
gallery.
The Wing’s construction is well
over £1,000,000 – a modern
building of zinc and glass,
complementing the 1902 striking
1902 structure.

The New Geology Gallery: £150,000
investment in telling Lyme’s key story
Now….
June 2017

Mary Anning’s great finds:
Ichthyosaur a Jurassic marine reptile

2. Plesiosaur: a long-necked Jurassic marine
reptile

Dimorphodon: the first flying reptile
discovered outside of Germany

Programme Costs
The Mary Anning Wing Programme,
with all its separate facets costs in the
region of £1,700,000.
Our income is approximately £170,000.
We have therefore embarked on a
programme costing 10 times more than
our annual income.
Would any business ever embark on a
project carrying this level of exposure?
Heritage charities very often do this.

The Heritage Lottery
Fund
Our museum has received £798,000 from
HLF South West.
Applying to HLF is a long and challenging
process – but it has the merit of instilling
discipline.
Many grant giving charities regard HLF as
the ‘gate-keeper’ and will seriously consider
your application if you have HLF’s support.
HLFs processes ensure that you get many
technical matters right – but it does not
interfere with your duties as trustees –
governance…

What Governance Processes have we put in
place?
• The Board of Trustees:
• 1. Quarterly Reports to Trustees from director that are open and
honest – and identify mistakes.
• 2. Ensuring Trustees understand their responsibilities and are able to
make informed discussions.
• 3. Ensuring the skills of appropriate trustees are used.
• 4. Making sure the board of trustees has a diverse range of skills –
and recruiting as appropriate.
• 5. Ensuring Chairman and director can and do work effectively
together.

More Governance…
• Regular assessment of risk – for both the Mary Anning Wing
Programme and our operations.
• Creation of our Programme Advisory Board – a mix of trustees and
external experts meeting monthly and monitoring processes.
• Careful monitoring of cashflow – using expertise of Thomas Westcott.
• Regular updates of information to volunteers and staff – it’s the
human relationships that are the most challenging.
• Keeping funders and stake-holders informed.
• Take expert advice - even if this means paying for it!

What have Thomas Westcott ever done for
us?
• Understand how charities operate – and appreciate what our
strengths and weaknesses are
• Manage the Mary Anning Wing cashflow – it’s essential that we get
this right – and it is very reassuring to have an expert make precise
amendments
• Most importantly, negotiated a significant VAT discount with HMRC
for the Mary Anning Wing Programme. The reduction of VAT from
20% to 2% has reduced the programme cost by over £200,000.
Without this, our programme would not have progressed.

Any Questions?
Volunteers, Trustees,
local school children
and staff celebrate
the award of
£798,000 from the
Heritage Lottery
Fund!

Axminster · Barnstaple · Bideford · Bridgwater · Burnham on Sea · Crediton · Exeter · Holsworthy · Honiton · Ilfracombe
· Langport · Okehampton · Plymouth · Seaton · Somerton · Tiverton · Torquay · Weston super Mare

By Your Side. On Your Sidewww.thomaswestcott.co.uk
CHARITIES ACT 2011

UNINCORPORATED CHARITIES
Gross income is £25,000 or less
• But greater than £10,000
• But less than £10,000
Gross income is greater than £25,000 and up to £250,000
Gross income is greater than £250,000 up to £1M and total assets do not
exceed £3.26M
Gross income is greater than £1M or gross income is greater than £250,000
and gross assets exceed £3.26M

CHARITABLE COMPANIES

THE CONSTITUTION OF YOUR CHARITY,
IT’S GOVERNING DOCUMENT.

THE KIDS COMPANY

PUBLIC TRUST
• Why has it been knocked?
• What can you as Trustees do about it?

THE THOMAS WESTCOTT CHARITY NEWSLETTER
• Enrol today

FUNDRAISING
• Be Careful!

MAKING GRANTS FROM YOUR CHARITY
Be careful
Know the guidance!

WHY DO I AS A TRUSTEE NEED TO BE AWARE OF
THE REGULATORY FRAMEWORK?

THANK
YOU
“The content of this presentation has been prepared as a guide to topics of current financial business interest. We strongly recommend you take
professional advice before making decisions on matters discussed within. We can accept no responsibility for any loss to any person acting, or
refraining from acting, as a result of this material.”

FOR ONE YEAR ONLY – SORP 2015
• Periods beginning 1 January 2015

FRSSE SORP HAS GONE!

SORP (FRS 102)
• Periods beginning 1 January 2016
• Can adopt early

WHAT ARE THE KEY CHANGES?
• New definition of a larger charity
• Disclosure amendments
• Related party definition amended
• Differences in accounting

DEFINITION OF A LARGER CHARITY
• Income over £500k

DISCLOSURE AMENDMENTS
• SOFA identical except the treatment of gains and losses on
investments
• Balance sheet identical
• Trustees report is similar
• Cash flow needed for larger charities
• Revised disclosure of exceptional items

RELATED PARTY DEFINTITION
Related parties include a charity’s trustees and their
close family members and those entities which they
control or in which they have a significant interest.
Entities related to a charity include any subsidiary,
joint venture or associate of the charity.

RELATED PARTY DISCLOSURE:
The significant changes are:
• The disclosures required for trustees equally apply
to de-facto trustees
• Clarification that trustee expenses include costs
reimbursed and costs paid direct to third parties
• Whilst the details of individual donations without
conditions made by trustees need not be disclosed,
the total amount donated must be disclosed

• Unless immaterial, the total amount of expenses
waived by trustees must be disclosed
• Contributions by a charity to a pension fund for the
benefit of employees must now be disclosed
• Details of redundancy and termination payments for
staff must be disclosed

• All charities must disclose if the member of staff is
paid £60,000 or more in bands of £10,000 from
£60,000 upwards
• The total paid to key management personnel must
be disclosed

DIFFERENCES IN ACCOUNTING
• Holiday day accrual required
• Legacies accounted for when probable
• Discount rates applied to long-term liabilities
• Goodwill amortisation default period is 10 years
• Where practicable unlisted investments to be
valued at fair value

THE FUTURE?
A NEW SORP IS COMING FOR
2019!

THANK
YOU
Q & A“The content of this presentation has been prepared as a guide to topics of current financial business interest. We strongly recommend you take
professional advice before making decisions on matters discussed within. We can accept no responsibility for any loss to any person acting, or
refraining from acting, as a result of this material.”

LIKELY LEGAL ENTITIES
• Trust
• Unincorporated Association
• Company limited by Guarantee
• Charitable Incorporated Association

• All need registration with the Charity
Commission
• CIO is registered as it is formed

TRUSTS and UNINCORPORATED ASSOCIATIONS
• Normally have a Governing Document
• Rules and Charitable Objects established
• Powers of and Appointment of Trustees
• Permitted Activities of Charity

UNINCORPORATED CHARITY THEN LIKELY
• No limit on personal liability of trustees
• Charity cannot enter into contracts or investments in own name
• Two or more trustees are named or
• Use of Charities Land holding service required to own land
• Official Custodian of Charities

COMPANY LIMITED BY GUARANTEE
• Registered at Companies House
• No shareholders
• Non Distribution clauses for both income and capital
• Charitable purposes
• Limited liability of members

WHY HAVE A CHARITABLE INCORPORATED
ASSOCIATION (CIO)?
• Only registration is with Charity Commission
• Limited liability protection for Trustees
• Legal entity in own right

WHY HAVE A CIO? (continued)
• Organisation can employ paid staff
• It can enter into contracts in its own name
• It can own freehold or leasehold land and property

CONVERSION TO CIO
• Unincorporated charity can convert now
• Incorporated – waiting for response to feedback
request – nothing yet
• Feedback request closed 10 June 2016

TO CONVERT TO A CIO
• Choose Structure
• Write the Governing document

CHOICE OF CIO STRUCTURE
• There are two types of CIO available
• Association
• Foundation

ASSOCIATION CIO
• Wider membership
• There are voting members other than trustees
• The members elect a committee (trustees)
• The committee ‘runs’ the charity
• All members vote on major decisions

FOUNDATION CIO
• The only members are the trustees
• The charity is run by the trustees
• Probably originates from a trust deed or will
• There are no other voting members

WRITE THE GOVERNING DOCUMENT
• Guidance on how to write the Charitable Purpose
• An opportunity to review the objects
• Bring the constitution up to date
• Consider the area of operations
• Explain changes to CC

OTHER POINTS
• Does your existing charity allow the transfer of assets
• Is there a dissolution clause
• Do you have permanent endowments
• You may require Charity Commission permission
• Make sure your existing filing is up to date
• Have a good track record

APPLY ONLINE
• Beware that questions appear depending on
answers provided!
• Link your application to your existing charity
• Who
• What
• Where

TRUSTEE DETAILS
• Trustee declarations
• Eligibility to Act
• Understand your charity
• Each trustee must sign a declaration

TRUSTEES INFORMATION
• Name and former names
• Address
• Date of birth
• Email and contact numbers
• Other trusteeships

UPLOAD TO CHARITY COMMISSION
• Last accounts of current charity
• Provisional figures / budget for next year
• Transactions with trustees and permissions
• Explain the assets to be transferred
• Permanent Endowment Conditions

• And WAIT!!
• But CC may come back with questions

• Transfer the assets and liabilities to the new CIO
• There will be a new charity number – ensure that
documentation is updated
• Some banks allow the same bank account to be
used
• Follow rules re Permanent Endowments

NEW REGISTRATIONS:
• PAYE
• Gift Aid
• VAT
• General stationery

• Close previous charity?
• Legacies with specific charity number?
• Linked register at Charity Commission
• Take legal advice

You should now be a CIO !!

A COUPLE OF UPDATES TO BE AWARE OF:
• Auto Enrolment
• Fraud Week and protection from it
• Apprenticeship levy

LIFE GOES WRONG

CHARITIES GO WRONG

• OVERLY DOMINANT CHIEF
EXECUTIVE
• LACK OF FINANCIAL CONTROL
• STAGNANT OR WEAK BOARD

• FRIENDS AND FAMILY
• ARGUMENTATIVE / ABRASIVE /
CHALLENGING / DESTRUCTIVE
• MEETINGS

BEST INTERESTS OF THE CHARITY?

• CONFRONT THEM
• SEEK ADVICE
• RESIGN

• RANGE OF SKILLS
• HOLD EXECUTIVE TO ACCOUNT
• FURTHER THE AIMS OF THE CHARITY

• APPOINTMENT POLICY
• DEVELOPMENT POLICY
• RETIREMENT POLICY
• CHOCOLATE TEAPOT
(ACCOUNTANT)

• ASK QUESTIONS
• KEEP ASKING THEM
• EXTERNAL ADVISORS

Annual Charity Seminar 2016

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