The presentation was a workshop at NCVO's Trustee Conference on Monday 11 November 2013. The presentation was by Christine Rigby from BWB and Nick Mott from the Charity Commission. This presentation looks at what has happened, what is imminent and what is on the horizon for charity law. http://www.ncvo.org.uk/training-and-events/trustee-conference

1. AM3: Changes to charity
law and regulation for
trustees and treasurers
Christine Rigby, Senior Consultant, Bates Wells Braithwaite
Nick Mott, Charity Commission

2. What we will cover
1.
What has happened?
•
Charitable Incorporated Organisation
•
Public Services (Social Value Act) 2012
2.
What is imminent?
•
New powers to invest permanent endowment
•
Charity Commission for Northern Ireland
3.
What is on the horizon?
•
Charity law reform

3. 1. CIOs – the BIG one
Charitable Incorporated Organisations
– New Legal Form
– Incorporated – limited liability on
debts
– Bespoke legal form designed for
charities
– No Companies House
– 14% new charities are CIOs

4. 1. CIOs (cont.)
Any concerns?
– New and untested
– No public register of
charges – may deter lenders
• Should we consider CIOs?
– New charities
– Existing unincorporated
charities wishing to
“incorporate”
– Existing charitable
companies and IPSs

5. 2. The Public Services (Social Value) Act 2012
• Potentially really helpful for charities
– Public authorities
– Procurement
– Obligation
– Economic, social and environmental well-being of the
area
• Social improvement over profits?
• Those who don‟t?
– Potentially subject to challenge
• Early engagement with commissioners

6. 3. Other developments
• Safeguarding
– Criminal Records Bureau and the Independent
Safeguarding Authority merged to form the new
Disclosure and Barring Service
– New Update Service
– No longer need for new checks for new jobs

7. 3. Other developments (cont.)
• Data Protection
– Charities have been fined for the first time
– £70,000 and £150,000 respectively
– Plenty of guidance on Information Commissioner’s
Office website

8. 4. Charity cases
• Charity Tribunal:
– still a trickle, not a flood
– Cases include two unsuccessful challenges to Charity
Commission decisions to institute inquiries
– Majority of appeals brought by third parties, not the
charities themselves
• Surprising number of High Court decisions dealing with:
– Internal disputes within charities
– Whether charities can claim rates relief

9. 5. On the horizon?
• Trusts (Capital and Income) Act 2013
– Introduces a “total return” approach to investing
permanent endowment
• Charity Commission for Northern Ireland
– Due to begin registration next year for English
charities operating in NI

10. Charity law reform
•
A lot of talk, lots in the pipeline!
–
–
Government response to Lord Hodgson’s review
–
•
Two Parliamentary committees reviewing charity law
Law Commission and National Audit Office reviews
So what might actually change?

11. What is not changing?
• The basic role of the Charity Commission
• Public benefit test
• The rules about paying trustees
• Self regulation of fundraising (but 5 year review)
• National Exemption Orders for house to house
collections
• Registration threshold of £5k (and £100k for excepted
charities)

12. What is changing?
• Some of the Charity Commission‟s powers may be
reduced/delegated to partnership bodies
• Late filing fines may be introduced.
• Increase in audit income threshold from £500k to £1m
• Changes to the Annual Return
- Abolishing the Summary Information Return
- For charitable companies, a single Annual Return for
both the Charity Commission and Companies House
- Requiring charities to disclose information on
income sources and political and campaigning
activities

13. What else is changing?
• Clearer and wider powers for charities re social
investment
• Less onerous procedures for disposal of charity land
• Review of the remit of the Charity Tribunal – should
it be able to hear appeals against any decision of
the Charity Commission?

14. Thank you
Christine Rigby
Senior Consultant
Charity & Social Enterprise Department
Bates Wells & Braithwaite London LLP
2 – 6 Cannon Street
London EC4M 6YH
Tel: 020 7551 7712
E-mail: c.rigby@bwbllp.com

15. Thank you
Christine Rigby
Senior Consultant
Charity & Social Enterprise Department
Bates Wells & Braithwaite London LLP
2 – 6 Cannon Street
London EC4M 6YH
Tel: 020 7551 7712
E-mail: c.rigby@bwbllp.com

16. Charity Law & Regulation
What’s changed?
Nick Mott
Neal Green
11 November 2013

17. What’s new?
Charities Act reviews
Public benefit – new guidance
Lessons from investigations cases
Decision making – new guidance
The accounting framework - SORP
Annual return
17

18. It’s been an interesting year at
the Charity Commission
18

19. But we’ve kept going with the day
job
Dealt with 172,000 emails, phone calls and letters
Registered 4714 new charities
Completed 1232 compliance cases and ran 54
investigations
Reviewed 1900 sets of accounts
Relaunched our website

20. with ever decreasing resources

21. and we’re making some changes
Accounts filing – a tougher line
“It‟s important to me that charities
provide the public with information
about how they spend their money”
96% of those asked agree

22. What do the Charities Act
reviews mean for charities?
• No instant changes
•
•
•
•
COMING SOON(ish)
Some streamlining (HMRC joint portal; joint
filing with Companies House)
Law Commission
Stronger powers
Annual return changes

23. public benefit: what’s new?

24. public benefit: trustees’ duties
1. Carry out your charity‟s purposes for the public benefit
2. If the poor cannot afford your fees – make more than minimal
provision for them to benefit
3. Make decisions that are within the range of decisions trustees could
properly make in those particular circumstances
4. Have regard to our public benefit guidance
5. Report on public benefit in your Trustees‟ Annual Report

25. a final word on public
benefit…..
For us – it‟s complicated
For most charities – it‟s simple

26. Investigations – lessons learned
26

27. Lessons from investigations
cases
fraud
conflicts
decisions
Compliance
toolkit
Guidance
CC news
27

28. Guidance
171,268 contacts with trustees
100 + online publications
6,000,000 page views
28

29. Decision making (1)
It’s your decision – charity trustees and decision
making
Aims of the guidance:
• increase trustees‟ confidence
• improve trustee decision making
• explain the consequences of getting it wrong
• make clear the Commission‟s role
Plus some practical hints and tips
29

30. Decision making (2) principles
•
•
•
•
•
•
•
act within your powers
act in good faith, in the interests of your charity
make sure you are sufficiently informed
take account of all relevant factors
ignore irrelevant factors
manage conflicts of interest
decisions within the range of decisions a
reasonable trustee body could make

31. Decision making (3) –
in practice?
• Understand your governing document
• Aim to do the best for your charity
• Get advice if needed; read guidance; assess
risks
• Consider all the angles
• Don‟t get sidetracked
• Be alert to personal interests being affected
• Take time, consider all the options; how will it
look to others?

32. Decision making (4) –
Other things to thing about
• All the trustees are responsible for the decision
• You must comply with your governing document
(quorum, how and when decisions are made)
• What if someone disagrees?
• Keep proper records of what you discussed and
decided

33. The Accounting Framework for
SORP – what next for SORP?

34. SORP Exposure Draft
Developed by expert sector-based
committee (SORP Committee)
Informed by series of „roundtable‟
events in 2009
Set out requirements for small
charities first
Be clear about requirements
(must), advice (should) and options
(may)
Simpler headings in SoFA

35. Revised SORP timetable
Four months
consultation
ended 4
November
Collation and
analysis
Final draft for
3- tier FRC
sign-off
starting in
Spring 2014
New SORP
finalised in
Summer 2014
New
Regulations
in place by
Autumn
New
framework
accounting
periods
commencing
1 January
2015

36. What about the annual return?
New for 2014
FRSB membership

Qualified accounts

Trustee payments

Trading subsidiaries

Grant making

Other regulators

Key policies

BUT
36

37. What about the annual return?
Farewell to the
SIR
37

38. Thank you
Questions?
www.charitycommission.gsi.gov.uk
@ChtyCommission