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Connections with Non-Charitable Organisations - The Results Are In

on Tuesday, 06 November 2018.

The Charity Commission has published a summary of the responses to its consultation on guidance for charities that are connected with non-charitable organisations.

The Commission produced draft guidance on managing the relationship between charities and non-charitable organisations. It then investigated what the sector thought of the draft. The Commission has now published a summary of the feedback and a list of ways in which they will improve the guidance.

Brand Sharing

The Commission is keen to emphasise the importance of a charity maintaining its independence when it is connected with non-charitable bodies. The Commission is concerned that the public could be confused when, for example, organisations share similar names. This could occur when charities are set up by commercial businesses.

The respondents to the consultation would like the guidance to show a greater acceptance of brand sharing. There is concern that the guidance may produce new regulations regarding public transparency, without updating formal Commission frameworks.

Benefits as Well as Risks

Importantly, the respondents think the guidance should set out the benefits of affiliation with non-charitable organisations, as well as the risks. Charities are often advised to put in place trading subsidiaries for the purpose of managing risk and to protect charitable funds and it is important that the guidance does not deter charities from setting up such structures.

Proportionality

The guidance attempts to capture a huge range of scenarios and relationships and some considered this blanket approach unhelpful. Its remit includes charities which have trading subsidiaries, as well as those who are affiliated with international NGOs or 'connected to' public bodies; clearly these are very different situations.

Respondents would also like the guidance to acknowledge that some charities are likely to have greater resources for compliance than others. Advice could therefore be tailored in a way which would help reduce compliance costs for smaller charities. One way to achieve this would be a more consistent application of the terms 'must', where there is a legal duty, and 'should', where the guidance indicates good practice.

Know Your Audience

Respondents would like the guidance to be more accessible to trustees and volunteers. This includes reducing the length, having clearer scope and using language which is easily understandable by non-lawyers.

Have Your Say

Almost 60 charities, sector associations and charity legal advisors responded to the draft guidance, including VWV. If you or your organisation would like to be involved in developing the final guidance, please email guidanceandpractice@charitycommission.gsi.gov.uk.


For more information, please contact Bryony Thomas in the Charities Law team on 020 7665 0973.