The charity news you need to know about, condensed to save you time.
The Fundraising Regulator (the 'FRR') was established in January 2016 following the Etherington review into the self-regulation of charity funding. It formally took over the previous Fundraising Standards Board's role on 7 July 2016, with the aim of ensuring that charitable fundraising is open and accountable to the public.
After a consultation, the FRR published the arrangements for its funding through a registration and levy system, applicable from 1 September 2016. As initially proposed, the levy applies in banded rates, increasing in proportion to the charity's fundraising expenditure. For charities whose expenditure meets or exceeds the threshold of £100,000 the annual levy will start at £150. This increases to £15,000 for the few charities who spend over £50 million in fundraising.
In addition to the levy, there will be a registration scheme for charities whose fundraising expenditure falls below the £100,000 threshold, with a flat registration fee of £50. Charities that are paying the levy will be registered without any additional cost.
The FRR will publish a list of the charities that are registered and paying the levy on its website in due course. However, it has clarified that it will not immediately 'name and shame' those who fail to register or pay the levy, instead seeking to initially engage with charities and address their concerns. The FRR is due to review the current arrangements after three years.
For further information, see our 2016/17 edition of Trends in the Charity Sector.
The new FRR is consulting on its proposals for a self-regulatory Fundraising Preference Service (the FPS) with the aim of enabling individuals to only receive fundraising communications that they want from charities. The proposed model for the FPS would run in conjunction with the existing telephone and mail preference services.
As currently drafted the proposals:
The FPS will cover communications by telephone, text, mail and email, and will apply to communications where the main purpose is to raise funds.
The FR is accepting views on the proposals until 30 September 2016.
The Charities (Protection and Social Investment) Act 2016 gives the Charity Commission a power to issue an official warning to a charity or a trustee when it considers that there has been a breach of trust or duty, or other misconduct or mismanagement. This power is expected to come into force in November 2016.
The Commission proposes that it will issue a warning based on its assessment of the risks in the circumstances, taking into account the following factors:
Examples of where the Commission might use its warning power include unauthorised benefits to trustees where the amounts are small, or poor decision making where the loss to the charity is too small for stronger sanctions to be proportionate.
The Commission believes that the power will enable it to act in a more targeted and proportionate way. However, the response from the charity sector has been mixed. The National Council for Voluntary Organisations and the Charity Law Association have voiced concern regarding the high degree of discretion given to the Commission and the effect that publication of a warning may have on the reputation of a charity. It appears that the Commission may apply a low threshold for using of the power, which may concern charities and trustees.
The Charity Commission has said that it will 'consider further' the points made in responses to its consultation, which closed on 23 September. The Commission will publish a summary of consultation responses by the end of December 2016.
The new guidance sets out what charity trustees need to know when thinking about taking or defending legal action. The guidance gives an overview of:
The guidance also includes a checklist for trustees to consider when deciding whether defending legal action is in the charity’s best interests.
The Charity Commission has released the new annual return, which all registered charities with an income of more than £10,000 and all Charitable Incorporated Organisations (CIOs) with financial years ending in 2016 must complete.
The new annual return form will not ask for details about the charity trustees, such as their contact addresses and emails, as this is now included in a separate form to allow charities to view and amend trustee details at any time. Charities will be asked to confirm in the annual return that the trustee information held for the charity is up to date.
There are also a number of small changes to the financial information required of charities with an income of £500,000 and over, reflecting the changes introduced by the new SORP.
The return must be submitted at any time within 10 months of the end of the charity’s financial year, though the Commission urges charities not to wait until then. Failure to file on time can result in the Commission taking regulatory action.
Guidance on annual returns is available.