Presented on Monday 2 November at NCVO/BWB Trustee Conference 2015. Alice Faure Walker, BWB Trusteeship in context: Legal and regulatory update If you would like to find out more about our 2016 Trustee Conference email us at ncvoevents@ncvo.org.uk or call us on 020 750 3153.

1. Organised by: Lead Partner:
Media Partner:
Sponsors:AM1: TRUSTEESHIP IN CONTEXT:
LEGAL AND REGULATORY UPDATE
ALICE FAURE WALKER, BWB
2 NOVEMBER 2015 Drinks sponsor:

2. NCVO/BWB Trustee Conference 2015
Trusteeship in context:
legal and regulatory update
Alice Faure Walker, BWB
2 November 2015

3. Ever changing times
• What should you be doing now?
• What must you prepare for?
• What is on the horizon?

4. • Fundraising
• Company law
• Social investment
• Consumer law changes
• Tax and VAT
• Recent charity cases
• What else is in the pipeline?
What we will look at

5. FUNDRAISING

6. Fundraising – where are we now?
• A raft of initiatives since May 2015
– FRSB investigations and report
– Institute of Fundraising Task Forces and changes to the Code of
Fundraising Practice
– Parliamentary review
– Review of fundraising by Sir Stuart Etherington
– Information Commissioner’s Office review
– Possible statutory reform in the Charities (Protection and Social
Investment) Bill
– Review of guidance from Charity Commission and others

7. Fundraising – what to do now
• Ensure compliance with the changes in the Code of Fundraising
Practice
– All “oughts” changed to “musts”
– Ban on door to door fundraising if “no cold calling” sticker
– Telephone Preference Service registered calls
• Ensuring compliance with data protection legislation
• Dealing with complaints
– Serious incident reporting?

8. Fundraising – what to watch out for
• More changes to the Code of Fundraising Practice, including:
– Explanation of how to opt-out of communications
– Ban on sale of data to third parties
– Data sharing only allowed if opt-in
– Requirement to end telephone call when asked
– Prohibition on intrusive and persistent behaviour
• Charities (Protection and Social Investment) Bill
– New requirements for agreements with professional fundraisers and
commercial participators
– Larger charities to include information about fundraising in annual report
– New reserve power to regulate fundraising
• New Charity Commission guidance – CC20

9. Fundraising – other possible developments
• Sir Stuart Etherington’s Review of Fundraising
– Three lines of defence
• Increased trustee accountability and responsibility
• New specialised fundraising regulator
• Statutory regulator
– Fundraising Preference Service

10. COMPANY LAW

11. Small Business, Enterprise and Employment Act 2015
• Affects charitable companies and subsidiary trading companies
• Aims to enhance transparency and cut red tape
• Implementation to be staggered

12. Small Business, Enterprise and Employment Act 2015
• October 2015
– Simplified procedure for new director/secretary consent to act
• April to June 2016 – People with significant control
– Control of 25% of the voting rights
– Right to appoint or remove a majority of the board
– Otherwise exercises significant influence or control.
• The implications are
– New PSC register
– Filing with Companies House

13. Small Business, Enterprise and Employment Act 2015
• June 2016
– Simplified Annual Return procedure
– Central register for statutory registers
• October 2016
– Ban on corporate directors

14. SOCIAL INVESTMENT

15. Social investment
- Law Commission report September 2014
- Charities may combine their powers to invest and spend
charity funds to make a social investment
- Recommended an express statutory power
- Charities (Protection and Social Investment) Bill
- Charities may make an investment “with a view to both
(a) directly furthering the charity’s purposes; and (b)
achieving a financial return for the charity”
- Trustees must “satisfy themselves that it is in the
interests of the charity to make the social investment”

16. Social investment
• Social investment tax relief
– Introduced April 2014
– Tax relief on investments in charities and other social enterprises
– Application to expand the scope of the scheme
• Divest Invest
– Divest from investment in fossil fuels
– Invest 5% of assets in climate solutions

17. CONSUMER RIGHTS

18. Consumer Rights Act 2015
• Came into force 1 October 2015
• Applies where goods or services are provided directly to the public
• Brings most of the legislation into one place and makes it more user
friendly
• Key changes to the law:
– A new requirement that written terms be fair and in plain, intelligible
language
– Including pre-contractual information in the terms of the contract
– Digital content
– Ticket re-selling
• Review terms and conditions

19. TAX AND VAT

20. Tax
• Gift Aid
– Right to a refund – beware the small print
– A new model declaration?
– The effect of further devolution in Scotland?
• Gift Aid Small Donations Scheme
– Increase in the limit
• Donations to trading subsidiaries

21. VAT
• Direct mailing
– A change of approach
• Construction of new buildings
– Is this a business?

22. WHAT ELSE?

23. • Charity Tribunal
– Independent Press Regulation Trust –
registration as a charity
– Appeal by Cambridgeshire Target Shooting
Association
– Standing to appeal – case pending in the Upper
Tribunal
– Fees?
• Other cases
– Ilott v Mitson – legacies
– Greenfinch Charitable Trust – personal liability for
trustees
– WatchTower Bible Society – judicial review over
scope of Charity Commission inquiry
Charity cases

24. Other news
• Education Bill
• Housing Bill
• Increase in the audit threshold
– The income threshold has increased from £500,000 to £1 million for
financial years ending on or after 31 March 2015
– Similar increase in the group accounting threshold
• Increasing popularity of CIOs
– Draft regulations allowing conversion from company limited guarantee due
in the next few months

25. FURTHER DOWN THE LINE…

26. Law Commission -Technical Issues in Charity Law
• Consultation topics:
– Royal Charter and statutory charities - changing purposes and amending
governing documents
– Unincorporated charities – changing purposes and governing documents
– Cy-près schemes and the proceeds of fundraising appeals
– Regulating charity land transactions
– Use of permanent endowment
– Payments to charity trustees
– Ex gratia payments
– Incorporation, merger and insolvency
– The Charity Tribunal and the courts

27. Law Commission -Technical Issues in Charity Law
- Report expected late 2016
- Legislation in 2017-18, subject to Parliamentary
timetable

28. Alice Faure Walker
Bates Wells Braithwaite
10 Queen Street Place
London EC4R 1BE
Tel: 020 7551 7813
Email: a.faurewalker@bwbllp.com
Web: www.bwbllp.com

29. Trusteeship in context:
legal and regulatory update
Jane Hobson
Head of Policy
Neal Green
Senior Policy Advisor
NCVO/BWB Trustee Conference
2 November 2015

30. Charity Commission:
Strategic Priorities
• Protecting charities from abuse and
mismanagement
• Enabling trustees to run their charities
effectively
• Encouraging greater transparency and
accountability by charities
• Operating as an efficient, expert regulator
with sustainable funding

31. Key Guidance
• The essential trustee
• It’s your decision: charity trustees and
decision making
• Managing charity assets and resources: an
overview for trustees
• Public benefit: rules for charities

32. Alternative approaches
• Checklists
• Newsletter
• E-mails
• Social media
• Podcasts and videos
• Public meetings and other events

34. Ensure your charity is carrying out
its purposes
It’s about:
•Understanding your charity’s
purposes – what you can and
can’t do
•Knowing how your charity’s
activities fulfil its purposes and
benefit the public
•Knowing what difference your
charity is really making

35. Comply with the governing
document and the law
It’s about being:
•Familiar with your governing
document
•Up to date with filing accounts,
returns and any changes to its
details
• Aware of other laws that apply
to your charity
– You don’t need to be an expert;
you do need to take reasonable
steps to find out

36. Act only in your charity’s best
interests
It’s not about:
•preserving the charity for its own sake!
•Anyone’s personal interests
It is about:
•What furthers the charity’s purposes
•Balanced, adequately informed
decisions
•Recognising and dealing with
conflicts of interest
•Ensuring any trustee benefits are permitted
•Being prepared to question and challenge
•Accepting majority decisions

37. Manage your charity’s resources
responsibly (the duty formerly known as ‘prudence’)
It’s about
•Managing risks, protecting assets
(reputation) and people
•Getting the resources your charity
needs
•Having and following appropriate
controls and procedures
•Dealing with land and buildings
•Responsibility for, and to, staff and
volunteers

38. Act with reasonable care and skill
It’s about:
•Using your skills and experience
•Deciding when you need advice
•Preparing for meetings
•Getting the information you need
(financial, management)
•Being prepared in case something
does go wrong

39. Ensure your charity is accountable
It’s about:
•Meeting legal accounting and
reporting requirements
•Being able to show that your charity
complies with the law and is effective
•Being accountable to members and
others with an interest in the charity
•Ensuring that staff and volunteers
are accountable to the board
•Accountability as an opportunity not
a burden

40. Trustee decision making
• Key role of trustees
• Putting duties into practice
– Act within powers
– Act in good faith, in the charity’s
interests
– Ensure adequately informed, take advice if needed
– Take account of all relevant factors
– Ignore irrelevant factors
– Deal with conflicts of interest
– Within the range of decisions a reasonable trustee
body could make in the circumstances

41. Charity trustee meetings:
15 questions you should ask
Strategy – Opportunities and risks
•What effect is the current economic climate
having on our charity and its activities?

42. Charity trustee meetings:
15 questions you should ask
Financial Health
•Are we financially strong enough to maintain our
operations?
•Do we know what impact the economic climate is
having on our donors and support for our charity?
•Do we have any reserves?
•Have we reviewed our banking arrangements and,
where relevant, our investments?

43. Charity trustee meetings:
15 questions you should ask
Financial Health
•Have we reviewed our contractual commitments, such
as office leases, rental agreements, equipment hire?
•Have we reviewed any contracts to deliver public
services
•If we have a pension scheme, have we reviewed it
recently?
•How can we make best use of any permanent
endowment investments we hold?

44. Charity trustee meetings:
15 questions you should ask
Governance
•Are we an effective trustee body?
•Do we have adequate safeguards in place to
prevent fraud?

45. Charity trustee meetings:
15 questions you should ask
Making best use of resources
•Are we making best use of the financial benefits we
have as a charity?
•Are we making the best use of our staff and
volunteers?
•Have we considered collaborating with other charities?
•Are we making the best use we can of our property?

46. Email reminders
Submitting documents
•1st
reminder – to let charity know that the online
system is available - (month 4)
•2nd
reminder (month 7)
•3rd
reminder (month 10)
•Default notice (month 11)
•Final reminder – (month 14)

47. Has it worked?

48. CC News and regulatory alerts
• CC News – 4 times a year
• Regulatory alerts – when needed
• Press releases

49. Follow us on Twitter
Follow @ChtyCommission, for:
•…advice on running your charity,
with links to support available
elsewhere
•updates about our guidance and
consultations
•information about our work,
including case reports
•In future: short informational
videos

50. Public meetings
• Annual Public Meeting
• Regional meetings
• Conferences

51. What do you think?
• Are we helping trustees?
• Are our messages reaching them?
• Are there barriers we can remove?
• Is having guidance on the website working?
• “Less is more” Do you agree?
• Are there other ways we can reach trustees?

52. Thank you
NCVO/BWB Trustee Conference
2 November 2015