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CC News 39 - Summer 2012
Have your say on draft public benefit guidance
We want to hear your views on new draft public benefit guidance for charity trustees. Public benefit is at the heart of what it means to be a charity - in law, a charity is an organisation with exclusively charitable purposes that are for the public benefit. Our guidance explains what people need to consider when setting up a charity and what trustees need to consider to run their charity for the public benefit and when reporting on public benefit. We have taken care to write the guidance in simple language and have used a new web-based format, which means that the guidance is split into different sections and pages, like a website. We hope this makes it easier for trustees to find relevant sections of guidance and to access more detailed information when they need it. We can also provide a text document of the draft guidance on request for those who wish to read it off-line. Our public benefit guidance was first published in 2008, and we have reviewed it to take account of a recent Charity Tribunal decision, changes in the law, such as the introduction of the Equality Act 2010 as well as trustees' experience of using the guidance.
We're especially keen to hear from charity trustees, so please don't forget to tell us that you are a serving trustee in your consultation response. You've got until 26 September to have your say. Top of page
Preventing fraud in charities - new guidance
We've joined forces with others to create a new guide on preventing and responding to fraud in charities. Charity Fraud - a guide for the trustees and managers of charities explains what trustees' duties are towards their charities. It includes a checklist on things you should do to prevent problems from happening in the first place, and explains how to respond if you find out that your charity has fallen victim to fraud. For instance, the guide features a flow chart explaining when to report incidents of fraud to whom (see below for information about the Commission's guidance on reporting serious incidents). The guide is published by the Charity Finance Group in collaboration with the Commission and a range of organisations, including the National Council of Voluntary Organisations (NCVO), the National Fraud Authority, the Fraud Advisory Panel and the Serious Organised Crime Agency. The new guide summarises the Commission's own detailed guidance (Compliance Toolkit, Chapter 3: Fraud and Financial Crime).Top of page
Dame Suzi moves on
The Chair of the Charity Commission, Dame Suzi Leather, has come to the end of her term of office. Dame Suzi was appointed in 2006 and has served the maximum two terms allowed. During her time in office, Dame Suzi has overseen the Commission's implementation of the Charities Act 2006 and has steered the organisation through two strategic reviews, including last year's review which saw us responding to funding cuts of a third over four years. Dame Suzi will now take up a position as the Chair of trustees at a charity. Arrangements for her succession are the responsibility of the Cabinet Office, who are expected to appoint a new Chair in the autumn. Our Board member John Wood will act as Interim Chair in the meantime.Top of page
Charities and reserves - new research and tips for trustees
Does your charity have a reserves policy, and, if so, does your Trustees' Annual Report (TAR) explain that policy clearly?
New research by the Commission suggests that over three quarters of TARs now include a statement about the charity's reserves policy - up from less than half six years ago. That is good news, but the research also finds that many charities - especially smaller charities - do not explain clearly enough why they hold a certain level of reserves and under which circumstance the reserves might be used. Charity law requires charities to spend income within a reasonable period of time - so it's important trustees explain why they hold income in reserve. Read the Commission's guidance Charities and Reserves (CC19) for details about trustees' duties. Also, umbrella bodies Charity Finance Group, ACEVO, and the Institute of Fundraising have collaborated on a new publication called Beyond reserves. It includes case studies of charities' approach to reserves and includes useful insights and practical tips. Top of page
Charitable disaster appeals - what you need to know
If your charity takes part in appeals for funds after disasters or emergencies, you'll need to know about our new guidance on starting, running and supporting charitable disaster appeals (CC40). The guidance is aimed at charity trustees as well as members of the public who want to help respond to desperate need.
It sets out what you need to know to run an appeal legally and effectively and explains how people can support relief efforts without setting up new charitable appeals - for example by volunteering their time and skills. The guidance also highlights the importance of wording appeals in a way that lets the public know exactly what they are supporting. Thinking carefully about the wording of appeals can also help your charity be clear about how it wants to help and whether any surplus funds can be used for other projects it may be involved with. The final section includes tips on safeguards for avoiding fraud affecting your charity or your appeal. Top of page
New look for guidance on reporting serious incidents
We have rewritten our guidance on reporting serious incidents and hope that the new format and style makes it easier for trustees to navigate. While the guidance now looks quite different, the basic message for trustees remains the same: trustees should let us know when their charity experiences a serious incident. As a matter of good practice, you should inform us as soon as the incident has occurred. This lets us know that you have properly identified a risk to your charity and are taking appropriate steps to manage the risk. When it's clear that trustees are managing the incident appropriately, there may be no role for us, but we may need to get involved following a serious incident if we have concerns about the way that trustees have responded. The guidance has also been updated to reflect changes in the law, including the introduction of the Protection of Freedoms Act 2012 and changes to reporting requirements on fraud in charities.
Chance to promote trusteeship
Trustees' Week, the annual campaign to promote and celebrate trusteeship, is planned for 5-11 November this year. Trustees' Week, which is in its third year, is an opportunity for charities to raise awareness of the vital work of trustees, organise trustee training events, recruit new trustees or simply say thanks to their existing trustees. We at the Commission will be posting information about events and campaigns taking place under the Trustees' Week banner on the Trustees' Week blog. You can also download useful information and resources from the blog, including model posters and flyers, and a list of 10 top tips for promoting Trustees' Week. Just email firstname.lastname@example.org to tell us about your event or to nominate a trustee case study.
In May, we published a report of our inquiry into a charity (now removed) that worked to promote the health of people affected by bullying, including by operating a confidential helpline. The Commission opened an inquiry after receiving complaints about comments made to the media about calls to the charity's helpline by the charity's chief executive. The inquiry concluded that the statements resulted in a risk that individuals may have been identified, although that risk was not realised. The inquiry report highlights charity trustees' legal duty to protect information their charity holds or processes about beneficiaries, donors and employees. Top of page
Did you know? New pensions rules for charities employing staff
The Pensions Regulator has published an online leaflet explaining new rules about pensions, which affect all charities that employ staff members.
The rules will require all employers to make pension arrangements for employed staff and to contribute at least 3% of what is described as 'reckonable salary' to the scheme as an employer contribution.
The changes will come into effect after October 2012 in a staged way (larger charities will have to comply sooner than smaller ones). But even the smallest employers, with 1 or more staff members aged 22 or over earning more than £5,564, will need to have arrangements in place by 2017 at the latest.
If you are a charity employing staff, for more information as to when you will be affected see this information sheet. Top of page
Internal Financial Controls (CC8) - updated guidance
CC8 now takes into account findings of the recent ICAEW review project that assessed charities' financial governance, as well as findings from our case work with charities. It also includes new recommendations on reviewing cash withdrawals and documenting loans to the charity, as our case work shows poorly recorded cash withdrawals and loans from trustees may often be a problem in charities. Top of page
Did you know? Free advice sessions on data protection
The Information Commissioner's Office (ICO) is offering charities the chance to take part in free one-day advisory visits, to help you understand how to meet your legal requirements under the Data Protection Act. The ICO can shape visits around the needs of charities, so that you get the most out of the experience. So for instance, charities that handle personal data can learn more about their responsibilities in handling that data and receive tips about how to keep that data safe. The visits were launched in December 2011 and over 40 voluntary organisations have already taken up the opportunity. You can find more information about the visits on the ICO website. Top of page
Charities recognised for online reporting
Congratulations to all winners and runners-up of this year's ICAEW Charities Online Financial Reporting and Accounts Awards. Find out more about the awards and watch the video which showcases the financial reporting and accounts of the winners and runners up on the ICAEW website. Top of page