3 June 2011

- Last chapter covers holding, transferring and receiving funds safely -

The Charity Commission, the independent regulator of charities in England and Wales, has today published the last chapter of Protecting Charities from Harm, its online compliance toolkit for charity trustees.

The toolkit has been developed in partnership with the charity sector and is a useful guide which aims to give trustees some practical advice to help manage risks and protect their charity and its property from harm.

All charities need money or financial assistance of some kind. Charities raise and spend money in a variety of ways within the overall objective of fulfilling their charitable purposes. This includes direct spending on charitable projects to help beneficiaries and supporting governance, administration and fundraising. Charities which work internationally often move money across international borders, encountering different financial systems and needing to use different currencies. Whatever the charity, its trustees are legally responsible for ensuring their money is used for legitimate charitable purposes and safeguarded, as much as possible, from loss.

Most countries in the world have some form of banking system in place. Using the banking system is a prudent and responsible way to ensure that charity funds are safeguarded, and that there are appropriate audit trails of the sort which trustees must keep for the receipt and use of charity money. This chapter of the toolkit looks at the need for charities to have and use bank accounts; explains what the trustees’ duties are when using the banking system; and the particular issues which arise in connection with exchanging sterling for other currencies.

However, charities may need to use and work in cash to some degree. Charities may need to use alternative financial systems, although these are more inherently risky than using formal banking systems. These include Money Service Businesses, agents using alternative remittance systems, Payment Services, cash couriers, or even other charities and NGOs.

This guidance provides advice to trustees about what things they need to consider if they have to use cash and these alternative methods; the associated risk management factors; and the sort of financial controls which may be appropriate. Practical tools for trustees to help them meet their legal duties have also been developed.

The earlier chapters of Protecting Charities from Harm covered charities and terrorism; due diligence and monitoring; and fraud and financial crime. The toolkit can be found on the Commission’s website.

End.

For further information please contact the press office

PR 28/11

Notes to Editors

1. The Charity Commission is the independent regulator of charities in England and Wales. See www.charitycommission.gov.uk. For further information call our contact centre on 0845 300 0218.

2. The Charity Commission’s compliance toolkit, Protecting charities from harm, can be found on the Commission’s website.

3. Protecting charities from harm comprises four chapters:

• Charities and terrorism;
• Due diligence, monitoring and verification of end use of charitable funds;
• Fraud and financial crime;
• Holding, moving and receiving funds safely in the UK and internationally