New requirements for charities and professional fund raisers PLUS charity sector update16/12/08
On 1 November 2016 certain provisions of the Charities (Protection and Social Investment) Act 2016 (the “2016 Act”), amending both the Charities Act 1992 and the Charities Act 2011, came into force – requiring charities and ‘professional fund-raisers’ to ensure that agreements between them contain certain required provisions. In particular, section 13 of the 2016 Act adds to the prescribed requirements for agreements that allow professional fund-raisers to solicit money/other property for the benefit of a charity. An agreement must now also state:
- that the professional fund-raiser undertakes to be bound by the agreement;
- how the activities in the agreement will protect vulnerable people/other members of the public; and
- any arrangements which enable the charity to monitor compliance with those two requirements.
All parties to such agreements should take note that the incoming provisions do not specifically exclude agreements that are already in place, meaning all will need to be updated to comply with the new legislation.
The Charities Act 2011 already gives the Charity Commission the power to suspend charity trustees in certain situations but a new provision has been inserted (Section 75A) which permits the Charity Commission to issue a warning to a trustee who it considers has committed a breach of trust or duty – or to the charity itself.
What's been happening in the charity sector?
Update on the Small Charitable Donations and Childcare Payments Bill 2016
Parliament; 15 November 2016
The Small Charitable Donations and Childcare Payments Bill 2016 has completed its passage through the House of Commons and has now passed to the House of Lords. The Government successfully resisted several opposition amendments, including calls to exclude certain charities from the ‘connected charities’ rule and to include small donations made by cheque, via texts or online within the scheme. However, the definition of “contact less payment” in the Bill will cover donations made by Oyster cards and other smart cards, as well as new payment services similar to Apple Pay and Android Pay. The Government also confirmed that it would lay regulations in Parliament to simplify the process of gift aiding donations made by SMS and online through digital intermediaries. The Bill includes provisions to amend the Small Charitable Donations Act 2012 to reform the Gift Aid Small Donations Scheme. If enacted, the changes will take effect from 6 April 2017. The House of Commons Library has published a useful briefing paper on the Bill.
NCVO launches consultation on new version of the charity sector governance code
National Council for Voluntary Organisations; 4 November 2016
The National Council for Voluntary Organisations (NCVO) has launched a consultation on a new version of the charity sector governance code. The consultation, which includes recommendations for charity boards and proposals for higher standards, will end on 7 February 2017.
Commission to consult on raising £5m from sector to pay for regulation
Civil Society; 3 November 2016
William Shawcross, chair of the Charity Commission, has told the All Party Parliamentary Group on Charities and Volunteering that the Commission will launch a consultation in early 2017 on plans to raise £5m from the sector to pay for regulation, and that ideally all of the Commission's funding would come from the sector, although smaller charities would be exempt.
Fundraising Regulator and Institute of Fundraising enter into a framework for working together
Fundraising Regulator; 2 November 2016
The Fundraising Regulator and the Institute of Fundraising have signed a Memorandum of Understanding (MoU) that sets out how they propose to work together. The MoU secures an on-going role for the Institute of Fundraising in helping to shape fundraising best practice. In particular, the Institute of Fundraising is appointed as the Fundraising Regulator's official partner for producing non-legal guidance for fundraisers on the Code of Fundraising Practice.
Regulators issue guidance on new fundraising rules
Fundraising Regulator; 1 November 2016
The Fundraising Regulator has developed frequently asked questions about the new fundraising rules contained in section 13 of the Charities (Protection and Social Investment) Act 2016, which came into effect on 1 November 2016. These include details of the Fundraising Regulator's approach to applying the new rules to pre-1 November 2016 fundraising agreements and examples of what might constitute unreasonable fundraising practices. All commercial participator or professional fundraiser agreements entered into by charities from 1 November 2016 must comply with the additional information requirements. Failing to do so will be a breach of the Code of Fundraising Practice.
HMRC clarifies effect of Common Reporting Standard on charities
Association of Charitable Foundations; 1 November 2016
According to the Association of Charitable Foundations, incorporated charitable grant-makers will not be required by the new Common Reporting Standard to carry out due diligence on organisations they fund. The Standard is being implemented worldwide, and will come into force in the UK on 31 May 2017. However, HM Revenue and Customs’ approach to compliance by charities that are Financial Institutions will be a “soft landing” (i.e. it will not seek to apply penalties where charities have made efforts to carry out due diligence requirements and report accurately).
Fundraising Regulator announces dates for consultation on the Code of Fundraising Practice
Fundraising Regulator; 27 October 2016
The Fundraising Regulator has said that it will consult charities on prospective changes to the Code of Fundraising Practice between February and April 2017.
Government publishes final funding policy for the Apprenticeship Levy
Department of Education; 25 October 2016
In a written ministerial statement, the Secretary of State for Education has set out the key features of the final funding policy for the Apprenticeship Levy. This includes the extension of the deadline for using funds in an organisation’s digital account from 18 months to 24 months, which will assist charities in implementing apprenticeship schemes and give them longer to spend funds on apprenticeship training. The funding policy will be implemented in May 2017.
New website to help charities fight fraud
Charity Commission; 24 October 2016
The Charity Commission, in collaboration with members of the Charity Sector Counter-Fraud Group, has launched a new website to help charities combat fraud. The website - Charities Against Fraud - includes guidance, useful tips and case studies for charity trustees, staff and volunteers. It also directs users to other organisations that tackle fraud, and allows charities to sign up for email alerts that provide details of scams affecting charities.
Consultation on updated guidance for reporting serious incidents.
Charity Commission; 20 October 2016
The Charity Commission has launched a three-month consultation on proposed changes to its guidance for charities on reporting serious incidents (e.g. frauds, thefts, criminal breaches, etc). The draft guidance includes new checklists and a table of examples to help trustees understand when to report something to the Commission, to the police or to other regulators. Responses must be submitted by 12 January 2017.
Dates set for changes made to gift aid claims on digital donations
Parliament; 19 October 2016
The Finance Act 2015, Section 20(2) and (3) and the Finance Act 2016, Section 173(1) (Appointed Days) Regulations 2016 bring into force changes that will make it easier to claim Gift Aid on digital donations made through non-charity intermediaries, such as digital giving platforms. The extension of the ‘qualifying donation’ definition to include gifts made through intermediaries will come into effect from 6 April 2017. Amended rules for gift aid declarations, record keeping and powers to impose penalties of up to £3,000 on both charities and non-charity intermediaries for failing to comply with the rules came into effect from 14 November 2016.
Charity Authorised Investment Fund launches
Charity Investors Group; 12 October 2016
The Charity Investors Group, Charity Law Association and the Investment Association have announced the launch of the Charity Authorised Investment Fund (CAIF) structure. The CAIF is a new investment vehicle for charities and will offer some of the same benefits as the existing Common Investment Fund, including tax benefits for registered charities, but will additionally offer improved regulatory oversight and exemption from VAT on investment management fees. The Investment Association has published guidance on creating CAIFs
Fundraising Regulator and Information Commissioner enter into a framework for working together
Fundraising Regulator; 11 October 2016
The Fundraising Regulator and the Information Commissioner have signed a Memorandum of Understanding (MoU), which provides a framework for co-operation and information sharing between them. The MoU states that, subject to any legal restrictions on the disclosure of information and at their discretion, each regulator will alert the other to relevant breaches discovered while undertaking their respective duties, provide relevant supporting information and keep the other updated on the progress of such cases. While not legally binding, the MoU alerts charities to the regulators' clear intention to work closely together to provide joined-up intervention when complaints about fundraising practices raise issues in their respective fields.
Charity Commission launches new digital resource for charity trustees
Charity Commission; 5 October 2016
The Charity Commission, in conjunction with Grant Thornton and Zoe Amar Communications, has launched a new resource intended to help trustees exploit digital for their charity. The guide, which covers fundraising, governance, brand, and service delivery, looks at the opportunities that digital can bring to charities, including better governance, and how trustees can ensure that they are prepared for the potential challenges of digital.
For more information please contact Claire Reynolds, Sam Hopkins or Nicola Roscoe.