changes to charity law and regulation for trustees and treasurers workshop
DESCRIPTION
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-conferenceTRANSCRIPT
AM3: Changes to charity law and regulation for trustees and treasurersChristine Rigby, Senior Consultant, Bates Wells BraithwaiteNick Mott, Charity Commission
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
What we will cover
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
1. CIOs – the BIG one
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
• 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
2. The Public Services (Social Value) Act 2012
• 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
3. Other developments
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
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
• 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
5. On the horizon?
• A lot of talk, lots in the pipeline!
– Two Parliamentary committees reviewing charity law
– Government response to Lord Hodgson’s review
– Law Commission and National Audit Office reviews
• So what might actually change?
Charity law reform
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)
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
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?
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: [email protected]
Thank you
Christine RigbySenior Consultant
Charity & Social Enterprise DepartmentBates Wells & Braithwaite London LLP2 – 6 Cannon StreetLondon EC4M 6YHTel: 020 7551 7712
E-mail: [email protected]
Thank you
Charity Law & RegulationWhat’s changed?
Nick MottNeal 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
18
It’s been an interesting year at the Charity Commission
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
with ever decreasing resources
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
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
public benefit: what’s new?
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
a final word on public benefit…..
For us – it’s complicated
For most charities – it’s simple
26
Investigations – lessons learned
971 serious incidents
360 uses of statutory powers54 complianceinvestigations
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Lessons from investigations cases
fraud
decisions
Guidanceconflicts
CC news
Compliance toolkit
28
Guidance
171,268 contacts with trustees
6,000,000 page views
100 + online publications
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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
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
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?
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
The Accounting Framework for SORP – what next for SORP?
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
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
37
What about the annual return?
Farewell to the
SIR
Thank you
Questions?
www.charitycommission.gsi.gov.uk@ChtyCommission