Charity News Speed Read - May 2018
We summarise the latest news affecting charities.
- New Guidance Published Following a Report Showing the Level of Cyber Security Breaches Among Charities
- HMRC Research Exposes Extent of Unclaimed Gift Aid
- An Update on the Interim Safeguarding Taskforce and a Recent Commission Inquiry into Safeguarding Incidents
- Charity Commission Publishes Study on Insider Fraud
- Recent Charity Consultations
- Regulators Issue Guidance on Fundraising Audit Requirements
- Charity Commission Publishes New Trustee Welcome Pack
New Guidance Published Following a Report Showing the Level of Cyber Security Breaches Among Charities
The National Cyber Security Centre has published the Small Charity Guide which outlines steps charities can take to defend against common cyber-attacks. The Charity Commission has also included the NCSC guide in its guidance on what charities can do to protect against fraud.
This follows a report published by the Department for Culture, Media and Sports based on findings of a random probability telephone survey of UK businesses and registered charities from last year.
The significant findings of the survey concerning charities include that:
- 19% of charities discovered at least one cyber security breach or attack in the past year. For large charities with an income of £5 million or more, this figure rose to 73%
- 44% of charities hold personal data on customers, beneficiaries or donors electronically. Among these, 30% of charities have experienced breaches or attacks
- the average cost to a charity of a breach is £1,030
- 53% of charities said that cyber security is a high priority for their organisation's senior management but only 21% respectively had a formal cyber security policy
HMRC Research Exposes Extent of Unclaimed Gift Aid
The government is encouraging donors to declare Gift Aid on their donations after HMRC research revealed that charities are losing out on nearly £600 million a year in extra funding.
An Update on the Interim Safeguarding Taskforce and a Recent Commission Inquiry into Safeguarding Incidents
- The Charity Commission has provided an update on the work of its safeguarding taskforce which was opened in February after the public spotlight on Oxfam. The update highlights that there were 532 new serious incident reports received in February and March 2018, compared to 176 for the equivalent period in 2017. The increased reporting relates to both historic and more recent incidents.
- The Charity Commission has opened a statutory class inquiry into the Royal National Institute of Blind People (RNIB) and its subsidiary charity, RNIB Charity, over concerns about safeguarding of vulnerable beneficiaries. The inquiry was triggered by concerns about the oversight and management of a residential setting for children and young people in Coventry run by RNIB Charity. A serious safeguarding incident was reported by the trustees on 2 March 2018. On the 16 March 2018 RNIB Charity reported further serious incidents which had occurred over the course of the last year, as well as a notice of intended action by Ofsted. The investigation will focus in particular on the trustees' governance and oversight of safeguarding arrangements in the charities' schools and care homes, and will be reviewing whether trustees reported all relevant safeguarding incidents which have occurred to the Commission.
You can find further information about the key safeguarding updates in our main article.
Charity Commission Publishes Study on Insider Fraud
Insider fraud is committed by somebody within the charity such as a trustee, employee or volunteer. The Charity Commission report found that the following factors contributed to the fraud occurring:
- excessive trust or responsibility being placed in one individual
- lack of challenge or oversight
- absence of controls or existing controls are poorly applied
The report also highlights how important timely reporting is with only 62% of fraud's being reported to Action Fraud and 57% being reported to the Charity Commission. The Commission have highlighted that the crucial lesson for charities is not about introducing lengthy counter-fraud policies but instead about changing people’s behaviours and encouraging staff and all those involved in charities to be vigilant and speak out when things don’t seem right.
This report was published shortly before the chief executive of Age Concern South Tyneside between 2007 and 2017 was convicted of defrauding the charity of £700,000 across eight years.
Recent Charity Consultations
- The Charity Commission has undertaken a consultation on new guidance for charities which have close relationships with connected entities or organisations, and in particular, how trustees are expected to deal with them. VWV took part in the Charity Law Association working party and submitted a response. The consultation closed on 15 May 2018 and we expect a response from the Charity Commission in due course. We will report on the outcome in future charities law briefs.
- The Charity Tax Commission has launched a consultation to gather views on whether and how the tax treatment of charities needs to be reformed.
Regulators Issue Guidance on Fundraising Audit Requirements
The Fundraising Regulator and the Charity Commission have issued guidance to raise awareness of the fundraising audit requirements which apply to charities reporting their financial years starting after 1 November 2016. The new audit requirements apply to charities which are reporting in 2018, typically those with a December 2017 or March 2018 year end.
Charities must include a statement in the trustees' annual report which must include, among other things, information about the charity's approach to fundraising, how the charity monitors the fundraising activities and how many complaints the charity has received about its fundraising activities.
Charity Commission Publishes New Trustee Welcome Pack
The Charity Commission has published a new trustee welcome pack to help new trustees in their role. The welcome pack outlines the basic role of trustees, informs them of their duties and responsibilities and explains what needs to be sent to the Commission which can be used as a useful starting point for newly appointed trustees. It may also serve as a helpful reminder for trustees who have been in post for a longer time.