B2 the legal and regulatory landscape an update
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This session will update trustees on recent legal and regulatory changes, including: -New guidance from the Charity Commission on charities with a connection to a non-charity -Where are we now on serious incident reporting? -Lessons from recent Charity Commission inquiries -GDPR one year on -What’s new at the Fundraising Regulator, including the new Code of Fundraising Practice.
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B2 the legal and regulatory landscape an update
- 1. THE LEGAL AND REGULATORY LANDSCAPE: AN UPDATE Speakers Christine Rigby, Senior Consultant, Bates Wells Alex Jameson, Associate, Bates Wells Priya Warner, Head of Policy, Fundraising Regulator Co-sponsor: Lead sponsor: Drinks reception sponsor: Bursary sponsor: Technology sponsor:
- 2. WHAT WE WILL COVER What’s new at the Charity Commission Other legal developments GDPR one year on What’s new at the Fundraising Regulator Co-sponsor: Lead sponsor: Drinks reception sponsor: Bursary sponsor: Technology sponsor:
- 3. WHAT’S NEW AT THE CHARITY COMMISSION
- 4. CHARITY COMMISSION STRATEGY 2018 - 2023
- 6. REGULATORY ACTION GARDEN BRIDGE TRUST
- 8. INCREASED MOVE TO DIGITISATION
- 11. NEW GUIDANCE FOR CHARITIES WITH A CONNECTION TO A NON-CHARITY
- 12. WHO DOES THE GUIDANCE APPLY TO? Charity Trading subsidiary Sister non- charity Regularly funds non-charity
- 13. WHO ELSE DOES THE GUIDANCE APPLY TO? Charity Non-charity is trustee or appoints trustees Non-charity funds charity Non-charity co-delivers services Non-charity is sole member
- 14. WHAT/WHO IS AFFECTED? Trading subsidiaries Campaigning and advocacy Corporate foundations Funding relationships Federated structures Joint-working
- 15. 6 KEY PRINCIPLES Recognise the risks Do not further non-charitable purposes Must operate independently of the non-charity Avoid unauthorised personal benefit or conflicts of interest Maintain the charity’s separate identity Protect the charity and its reputation
- 17. TAX AND VAT • Increases to small scale trading by charities • Changes to Gift Aid donor benefit rules • Deed of covenant for trading subsidiaries • Preparing for IR35
- 18. COMING IN 2020…. TRUSTS REGISTRATION SERVICE Applies to: • Charitable trusts • Incorporated charities with funds held on restricted trusts or endowments For existing trusts Register by 31.3.21 For new trusts created after 1.4.20 Register within 30 days
- 19. LOOKING AHEAD……. Continued focus on safeguarding and serious incident reporting Consultation on charging by the Charity Commission Charities Act 2020?
- 20. GDPR, ONE (AND A BIT) YEAR ON ALEX JAMESON ASSOCIATE DATA PRIVACY BATES WELLS Co-sponsor: Lead sponsor: Drinks reception sponsor: Bursary sponsor: Technology sponsor:
- 21. MAY 2018… re- consenting privacy notice “we are committed to protecting your data” cookies notice retention policy data protection policy data breach policy “please stay in touch” “PLEASE DON’T LEAVE” POLICIES POLICIES POLICIES POLICIES POLICIES POLICIES POLICIES
- 22. FIRST GDPR ENFORCEMENT ACTION
- 24. NEW GUIDANCE - DATA SHARING
- 25. NEW GUIDANCE - COOKIES
- 26. SUBJECT ACCESS REQUESTS • Verify identity • Check the scope • Identify the systems to search – trustees personal emails? • Project management • Timing – 30 days – does this need to be extended? • Can you refuse? • Consider exemptions • What will happen next – ICO complaint? Employment claim?
- 27. WHAT NEXT?
- 28. WHAT SHOULD BE YOUR FOCUS NOW? • May 2018 was about ‘getting ready for the GDPR’ • Now should be about accountability, which means: • Evidencing compliance • Ensuring processes (and paper policies) actually work! • Understanding and training – are you getting it right? • Culture change!
- 29. MYTHS • You need consent for everything • You need to undertake a DPIA for every new use of personal data • Everybody needs a Data Protection Officer
- 30. WHAT’S NEW AT THE FUNDRAISING REGULATOR, INCLUDING THE NEW CODE OF FUNDRAISING PRACTICE PRIYA WARNER, HEAD OF POLICY, FUNDRAISING REGULATOR Co-sponsor: Lead sponsor: Drinks reception sponsor: Bursary sponsor: Technology sponsor:
- 31. INTRODUCING THE FUNDRAISING REGULATOR • The role of trustees • Complying with the fundraising standards • Responding to complaints • Reporting requirements of the Charities Act 2016 • Fundraising Preference Service WHAT WE WILL COVER
- 32. INTRODUCING THE FUNDRAISING REGULATOR We regulate all charitable fundraising in England, Wales and Northern Ireland. • We set the standards for fundraising the UK • We investigate complaints about • We provide guidance and support and research. • We give people more control over communications they receive from WHO WE ARE
- 33. COMPLYING WITH THE FUNDRAISING STANDARDS • Must always act in the charity’s best interests • Ultimate responsibility for fundraising and ensuring compliance with the law • Ensure any risks or conflicts of interest are managed • Ensure agreements with third party fundraisers are in place • Ensure relevant licenses / permissions are in place for collections • Should consider the impact of any campaigns on the charity’s reputation • See Charity Commission’s guidance (CC3 & CC20) and charity governance code THE ROLE OF TRUSTEES
- 34. • Consistent standards for fundraising • Sets expectations for charitable organisations • Sets out standards for considering complaints • Benchmark for best practice • Developing respect between fundraisers and the public COMPLYING WITH THE FUNDRAISING STANDARDS THE CODE OF FUNDRAISING PRACTICE
- 35. COMPLYING WITH THE FUNDRAISING STANDARDS STRUCTURE OF THE CODE
- 36. • Standards where ‘must’ and ‘must not’ are in bold text indicate a standard based on a legal requirement • However, all of the standards are equal • The code is not designed to be a legal handbook - you are responsible for making sure that you get the advice you need COMPLYING WITH THE FUNDRAISING STANDARDS THE CODE AND THE LAW
- 37. COMPLYING WITH THE FUNDRAISING STANDARDS • Example: Terms governing conditions of confidence and what constitutes information MUST be stipulated as part of written agreement between the Freelance Fundraiser and Client. • Becomes: The written agreement between you and the third-party fundraiser must include terms defining what is considered confidential information. PLAIN ENGLISH
- 38. COMPLYING WITH THE FUNDRAISING STANDARDS USE OF THE TERM ‘YOU’
- 39. COMPLYING WITH THE FUNDRAISING STANDARDS • Take time to digest the new code • Check whether you need to update training materials or internal policies • Ensure that staff and volunteers about the changes – this is an opportunity to raise awareness of the standards that you are expected to meet PUTTING THE CODE INTO PRACTICE
- 40. RESPONDING TO COMPLAINTS • Complaints are a learning opportunity • Encourage ‘local resolution’ • Look at complaints against the code • Recommendations for improvement • External review process • Publish named case summaries on our website OUR COMPLAINTS PROCESS
- 41. RESPONDING TO COMPLAINTS • Increase understanding of what a complaint is • Have an effective complaints process/procedures • Respond in a timely way • Investigate thoroughly with transparent decisions • Learn from complaints and show your supporters this • Consult our complaints handing guidance HOW TO IMPROVE COMPLAINT HANDLING
- 42. THE CHARITIES ACT 2016 • Produce a clear and discrete statement on fundraising • Cover the detail of who delivers the work and how • Give an accurate number of complaints • Set out how your organisation protects vulnerable people TIPS FOR CHARITY REPORTING
- 43. THE CHARITIES ACT 2016 Provide statements on fundraising, detailing: • Approach to fundraising • Whether signed up to voluntary regulation scheme or standard • If charity failed to comply with the scheme or standard • Monitoring of fundraising agencies/third parties • The number of complaints received • Actions taken to protect vulnerable people YOUR ANNUAL REPORTS SHOULD…
- 44. FUNDRAISING PREFERENCE SERVICE • Free to use • Allows public to control communication • Charities access suppression requests via portal • Not accessing requests is a breach of the code • Name charities which do not access suppressions and refer to ICO INTRODUCING THE FPS
- 45. FUNDRAISING PREFERENCE SERVICE • Public submits FPS request to stop communication • Charity notified of FPS request via email • Charity accesses request via FPS portal • Charity creates FPS profile to manage suppressions • Charity action FPS request within 21 days HOW DOES IT WORK
- 46. ANY QUESTIONS? Contact enquiries@fundraisingregulator.org.u k Phone 0300 999 3407 Visit www.fundraisingregulator.org.uk
Editor's Notes
- Welcome to this legal and regulatory update session. I’m Christine Rigby, a solicitor in the Charity and Social Enterprise Team at Bates Wells. My co-speakers at my colleague Alex Jameson who is one of our data protectoion specialists, and from the Fundraising Regulator, Priya Warner who is Head of Policy there.
- So what’s been happening this year for us to tell you about? Well, in these unusual times, Parliament has been pretty distracted by Brexit so there isn’t loads of new law to tell you about. However, it’s always good for you as trustees to hear what’s the latest from your main regulators – the Charity Commission and the Fundraising Regulator, and to hear about other areas of law that might be impacting on your charity’s activities. As a trustee of a small charity myself, I’ve tried to think about what’s important to tell you – not just in relation to the charities you represent, but also what you personally would find helpful to know about what’s expected of you as a trustee. The aim is we will spend about 15-20 mins each which should then leave time for questions at the end. We are all also available afterwards if you have a question that doesn’t get answered in the session.
- So, to kick off, what’s been happening at the Charity Commission?
- Once again it has been a busy year for charity regulation. This time last year the Charity Commission had just announced its brand new five year strategy. This slide shows how the Commission describes its purpose. The new strategy was fully implemented from the start of the new financial year in April and now, seven months further on, we are now starting to see the strategy playing out in its casework .
- When announcing its new strategy a year ago, the commission set out its view that charities must act in line with public expectations and also suggested that charities need to go further than strict compliance with legal obligations. More recent comments on the way the commission aims to regulate the sector came last month at the Commission’s Annual Public Meeting. In her speech, the Chair of the CC, Baroness Stowell again referred to the need for charities to “embody and reflect public expectations” of charity and said that “any gap between these expectations and reality risks damaging the standing of charity in the eyes of the public.” In the Charity Commission’s own words, it says ‘we enforce the law, but encourage charities to see the legal minimum as just that: a minimum, not an aspiration’.
- In the financial year 2018/2019 the commission issued 20 official warnings and 27 notifications of its intention to issue an official warning so this seems to be increasing use of this new power. In a number of cases, including the Oxfam inquiry, we have seen the power exercised during the course of a statutory inquiry. This was not reall anticipated when the Bill containing the official warning power was going through Parliament; the intention was more to use the warning as a less severe sanction which would be an alternative to opening an inquiry. [And in June 2019 the commission withdrew an official warning which it had issued to a charity in February 2019.] Overall, the commission has used its new legal powers on 137 occasions since they were introduced in the Charities (Protection and Social Investment) Act 2016, including: disqualifying 21 charity trustees; removing 7 disqualified trustees from position; issuing 9 orders directing that specified action should not be taken, in the context of a statutory inquiry. It has also used its new powers to direct the winding up of a charity.
- In June 2019 the commission launched its new online form for reporting a serious incident. All serious incidents, both new and updates, must now be notified to the commission using the online form. This reflects a general trend towards increased digitisation at the Charity Commission and a move towards online tools for most interactions with the commission. Although this is part of an efficiency move for the commission, we continue to experience delays from the commission when applying for consents and making new registration applications. Additional funding has now been promised for the commission from the Treasury and we hope this will start to reduce some of the longer delays.
- So what’s been happening this year for us to tell you about? Well, in these unusual times, Parliament has been pretty distracted by Brexit so there isn’t loads of new law to tell you about. However, it’s always good for you as trustees to hear what’s the latest from your main regulators – the Charity Commission and the Fundraising Regulator, and to hear about other areas of law that might be impacting on your charity’s activities. As a trustee of a small charity myself, I’ve tried to think about what’s important to tell you – not just in relation to the charities you represent, but also what you personally would find helpful to know about what’s expected of you as a trustee. The aim is we will spend about 15-20 mins each which should then leave time for questions at the end. We are all also available afterwards if you have a question that doesn’t get answered in the session.
- We are the independent regulator of charitable fundraising in England, Wales and Northern Ireland. We maintain and improve the Code of Fundraising Practice which sets the standards that apply to fundraising carried out by all charitable institutions and third party fundraisers in the UK. We investigate complaints about fundraising made by members of the public where these cannot be resolved by the organisations concerned themselves. In Scotland, complaints about Scottish-registered charities are dealt with by the Scottish Fundraising Standards Panel. This means that when a complaint is made, either we or the Scottish Fundraising Standards Panel will consider it, depending on which country the charity is primarily registered in. We provide guidance and support for fundraisers and the public, and conduct research on fundraising trends. We enable people to have more control over the communications they receive from charities through the Fundraising Preference Service.
- The main duty of trustees is to advance the purposes of the charity and to always act in the charity’s best interest. Trustees need to ensure that the charity’s assets and resources are only used for the purposes for which the charity was set up. This extends to the charity's fundraising activities. Trustees have many responsibilities directly related to fundraising. Trustees take ultimate responsibility for the fundraising activities of their charity. This is still the case even when they have delegated these roles. They need to ensure that any risks or conflicts of interest that may arise in fundraising activities are managed by the charity. Trustees are ultimately responsible for ensuring the charity is compliant with the law in the way it fundraises. This includes the need to ensure agreements with third party fundraisers are in place and that the relevant licenses / permissions are in place for collections. Their role includes considering the impact of any campaigns on the charity’s reputation. The Code of Fundraising Practice outlines trustee duties For broader information about trustee responsibilities, see the Charity Commission’s guidance The essential trustee: what you need to know, what you need to do (CC3) Charity fundraising: a guide to trustee duties (CC20)
- The code aims to: promote a consistent, high standard of fundraising; make sure charitable institutions, their governing bodies and fundraisers know what is expected of them; set out the standards we use when considering complaints; provide a benchmark for organisations and fundraisers to assess their practices against so they can identify necessary training and monitor and set policy priorities for their fundraising; and develop a culture of honesty, openness and respect between fundraisers and the public.
- The revised Code of Fundraising Practice came into effect 1 October 2019 alongside a new easier to use and navigate website version, which I hope you have had some time to explore. The changes are designed to make it easier for fundraisers, charities and third-party organisations to understand the standards expected of them when fundraising. The new code is also easier for the public to navigate, so that they know what to expect from ethical fundraising. These changes include Consolidation of the former code, rulebooks and legal appendices so that all of the standards can be found in one code. Clearer navigation by restructuring the standards in to three parts so that users can clearly identify which standards apply depending on the type of fundraising they do. Clarification of where there are differences in law in England and Wales, Northern Ireland and Scotland. Transparent, jargon-free language, following an independent review by the Plain English campaign, which gave the code a Crystal Mark standard.
- Some important points regarding the code and the law. The Code has been reviewed by lawyers in England and Wales, Scotland and NI to ensure it is legally up-to-date. But it’s not designed to be a one-stop-shop for all of the legal requirements you must follow now and in the future. You are responsible for making sure that you get the advice you need and keep on top of what the law requires. A common misconception in some charities is that other code standards are somehow less important than the legal ones. But as far as the code goes, all of the standards should be given equal weight. The examples pictured show how a standard is displayed in PDF form (grey box) and on our website
- The plain English principles we adopted included: • Keeping sentences short. – in this example, why use 26 words when 18 will do…?!! • Using 'you' and 'we' and active verbs where possible to make the language more direct and engaging. • Using words that are appropriate for the reader (except where there is a legal necessity to quote legal language directly). In this example, not everyone knows what “conditions of confidence” are, so if there is a simpler alternative that doesn’t affect the meaning, we should use it!
- Each standard uses the term ‘you’ (and ‘your’). To make it easy to use, we have set out who we mean by ‘you’ at the beginning of each section, and the code includes a glossary of terms. Unless we say otherwise at the beginning of a section, ‘you’ (and ‘your’) means the following. A charitable institution Or a third-party fundraiser which may be a volunteer, professional fundraiser or commercial partner if they are fundraising.
- The Code of Fundraising Practice set out the standards we use when considering complaints We deal with complaints about fundraising in England, Wales and Northern Ireland and fundraising in Scotland where it is carried out by charities registered primarily with the Charity Commission for England and Wales or the Charity Commission for Northern Ireland We investigate complaints about fundraising where these cannot be resolved by the organisations themselves Our service is free and can be used by anyone who believes they have been affected by poor fundraising practice Complaints are an opportunity for charities to learn We think organisations should have an opportunity to respond to complaints before we look at a case We encourage ‘local resolution’ of complaints and often refer the complaint back to the charity If we have identified a breach of the code, we may make recommendations for improvement to the organisations concerned. We may also make recommendations to provide the complainant with an appropriate remedy. Our decisions are final and there is no process of appeal However, parties to the complaint may request an external review We publish case summaries on our website to share learning and insight In October 2018 our Board agreed that we will name all organisations we investigate from 1 March 2019. We issued the first set of 10 named investigation summaries in September 2019 All parties are provided with a copy of the investigation summary intended for publication when we issue our final investigation decision and have two weeks to raise any concerns or comments
- Our Annual Complaints report shows handling complaints is the most frequently identified breach of the code In most cases the breaches relate to a charity not providing a full response to the concerns raised or a failure to demonstrate learning from a complaint In some cases had the original complaint been better dealt with that we would likely not have received a complaint at all We have seen that charities can have a tendency to be defensive when responding to complaints This demonstrates a need for improvement across the sector (both large and small charities) This is also important for small charities who represent 27% of complaints from organisations outside the levy In the cases of some smaller charities it seems the failure to properly deal with a complaint is linked to resources However, we have seen examples of poor complaint handling in larger charities as well No matter what you’re size, you need procedures to protect your organisation and keep your supporters
- Thinking about complaint handling also feeds into your requirements under the Charities Act 2016 We undertook a short research project to evaluate how charities are adapting to the new reporting requirement of the act. We found that the majority were not compliant with the act (only 40% covered all requirements). The key reasons for not adequately covering requirements were: Setting how the fundraising work was delivered and managed, and who did the work – for example, did the charity carry it out through its own teams or did it use third parties or community groups? How it managed third parties – the processes, how the contract was managed and how they were checked Charities should have good processes for fundraising complaints and keep records of complaints – the act simply asks for the organisation to state how many complaints they have received. The statements should set out how vulnerable people are protected with specific reference to fundraising – not just general safeguarding
- The Charities Act 2016 (section 13 and 14) require those registered charities which have their accounts audited (income is over £1 million) to include extra information about fundraising in their trustees’ annual report. The requirement came into effect for reporting periods ending from December 2017. The first accounts under the new legislation would have to be produced by October 2018 as charities have 10 months to file their accounts. There are 6 specific requirements in the act that need to be covered by statements in their accounts. The charity's approach to its own fundraising activities and any fundraising activities done on its behalf. In particular, by a professional fundraiser or commercial participator. If the charity or someone acting on its behalf was signed up to a voluntary fundraising regulation scheme or standard. If so, what scheme or standard. If the charity failed to comply with the scheme or standard mentioned above. If the charity monitored fundraising activities done on its behalf. If so, how did it monitor these activities. The number of complaints received by the charity or anyone working on its behalf, about fundraising activities done by itself or someone on its behalf. What the charity has done to protect vulnerable people and the wider public from certain behaviour during (or in connection to) fundraising activities. Behaviour includes: unreasonable intrusion on a person’s privacy unreasonably persistent methods to receive a donation undue pressure on a person to give a donation (of money or other property)
- A reminder about our FPS which sets out to help the public. Launched 6th July 2017 Online and telephone Free to use service that allows members of the public to control the communications they receive from specific chosen charities Charities can access suppression requests via the Charity Portal Not accessing requests is a breach of the Code and potentially the DPA 2018 From 1st March, naming charities which do not access and refer to ICO Cost covered through Fundraising Levy Not accessing is a breach of code Big change is that we are now naming charities which do not respond or access the service.
- People can use the Fundraising Preference Service to put a stop to communication from charities they no longer want to hear from. They can make a request either for themselves or on behalf of someone else. The service is free and funded by the fundraising levy. The FPS applies to all charities in England, Wales and Northern Ireland, regardless of their size. The Code of Fundraising Practice says you must stop sending direct marketing communications after a FPS request is received. We publish a list every month of organisations that have failed to act on an FPS request. If you continue to contact someone, we may refer you to the Information Commissioner’s Office (ICO).