Holding Charity Meetings During Lockdown

Charity Commission LogoFrom the Charity Commission

Coronavirus continues to have a major impact on charity events and trustees need to consider how and if they can hold meetings.

Charitable companies and Charitable Incorporated Organisations (CIOs) can hold AGMs and other members’ meetings online.  This temporary amendment is in the Corporate Insolvency and Governance Act 2020 and also applies to exempt charities that are community benefit or friendly societies.  It was extended from 30 September to 30 December 2020 but may be extended again if the government thinks this is needed. We will update with any changes if they happen.

For other types of meetings, or for any other type of charity, trustees need to check if their charity’s governing document allows them to hold meetings online or by telephone. Where it does not, an alternative may be to amend it to allow meetings to be held in this way.

Holding meetings online or by telephone

In the current situation, it may be difficult to hold face-to-face meetings. Some charities have clauses in their governing documents that allow them to meet virtually or to use telephone facilities, so we advise trustees to check their governing document and see if they can make amendments themselves to facilitate changes as to how or when meetings are held.

Generally, if there is no such clause in the governing document and you decide to hold meetings over the phone or using digital solutions, we will understand but you should record this decision and that you have done this to demonstrate good governance of your charity.

In the specific cases of members’ meetings (not trustee / director meetings) of Charitable Incorporated Organisations or charitable companies, held between 26 March 2020 and 30 December 2020:

  • they may be held by phone / video or other electronic means, even if the governing document requires them to be held physically face-to-face
  • members still have the right to vote, but the charity can require this to be done electronically, or by other means (such as by post)
  • members will not have the right to attend a meeting in person or participate in meetings other than to vote

If you rely on these provisions, you must ensure that this decision is recorded in the minutes and that all other meeting requirements are met. You should ensure that you have a robust system to ensure only those eligible to vote can do so and that you record who has voted and the percentages of votes cast.

Disagreements and Disputes in Charities

conflict resolutionWhy internal disputes are a problem

Charity trustees, staff and members can sometimes disagree with each other over decisions about the charity.

A serious disagreement within a charity may cause the charity problems and damage its reputation.

It is your responsibility as trustees to try to resolve a disagreement or dispute. The Charity Commission can only get involved in exceptional circumstances.

How to resolve a dispute yourself

Your charity’s governing document may include a ‘disputes clause’ with procedures for dealing with a dispute. Even if it doesn’t, you should do everything you can to reach an agreement yourselves.

When to get external help

Charity trustees and members need to work together to settle any differences they have. If your trustees can’t reach an agreement and follow the directions in your governing document, you may need to look for some independent external help.

An independent third party will look at both sides and come up with some fresh ways to resolve the dispute.

If the dispute is about the way your charity is run, you could:

  • approach the charity’s national or umbrella body, if it has one
  • contact an organisation like the Advisory, Conciliation and Arbitration Service “ACAS”
  • ask a local church leader or community elder for help, if it is a religious dispute

Mediation

Mediation is a more formal way to settle disputes. It is a private and confidential process in which an independent person meets with both sides, helping them to reach a solution that everyone finds acceptable.

Mediation can be quick and cost-effective. Through mediation, both sides must agree to any solution, so it is more likely to be a lasting agreement.

If your dispute is taken to court, you will be expected to have tried mediation first.

WHEN to involve the COMMISSION

The commission can only get involved in internal disputes when:

  • there are no trustees (or correctly appointed trustees) in place, and
  • you can show that all attempts to resolve the dispute have failed

When the commission won’t get involved

The commission will not get involved if your dispute is about trustees’ decisions or policies. Trustees are free to make decisions for their charity, so long as they are acting within the law and within the rules of the charity’s governing document.

More detailed information can be found here

Annual Return Deadline Coming Up!

cartoon-alarm-clock-ringingWhen to submit your annual return

You must submit your annual return within 10 months of the end of your financial year

For example, if your financial year end was 31 March 2019, your deadline is 31 January 2020

INcome under £10,000

You only need to report your income and spending

Income between £10,000 and £25,000

You must answer questions about your charity in an annual return.

You do not need to include any other documents

Income over £25,000

You must answer questions about your charity in an annual return.

You will need to get your accounts checked and provide PDF copies of your:

  • trustee annual report
  • accounts
  • independent examiner’s report

You also need a full audit if you have:

  • income over £1 million
  • gross assets over £3.26 million and income over £250,000

Prepare your annual report and accounts first. You can then upload them when you complete your annual return.

Making A Complaint About A Charity

You can complain to the Charity directly, unless you suspect illegal activity, like terrorism or abuse.

!Contact the police on 101 if you suspect illegal activity!

If you are not happy with how the charity deals with your complaint, contact the relevant regulator:

Fundraising complaints

Contact the Fundraising Regulator to complain about:

  • the way you’ve been asked for donations
  • how fundraisers have behaved

You can also complain on behalf of someone else.

Advertising complaints

Contact the Advertising Standards Authority to complain about:

  • an advertising campaign you think is offensive, deceptive or inaccurate
  • the amount of emails or mail you get from a charity

You can change how often you get emails, phone calls, texts or post from a charity using the Fundraising Preference Service.

Other serious complaints

Complain to the Charity Commission if a charity is, for example:

  • not doing what it claims to do
  • losing lots of money
  • harming people
  • being used for personal profit or gain
  • involved in illegal activity

Make a serious complaint about a charity.

If you’re a Trustee or Auditor

You can:

If You’re A Charity Employee Or Volunteer

Read how to report serious wrongdoing at a charity you work for

Charity Annual Return – New Questions

Information board stating "Annual return 2018 and 2019. Salaries + benefits = transparency and public trust".From the Charity Commission

all 2018 and 2019 annual return questions

Why we are asking about salaries and benefits in charities

Our research into public trust and confidence in charities shows that the public is concerned about high levels of pay in charities.

Because of this we will be asking charities to provide more information about salaries to increase accountability.

We will ask for a breakdown of salaries across income bands, and the amount of total employee benefits for the highest paid member of staff.

But, in response to concerns raised during our public consultation, we will not publish details of benefits given to the paid member of staff on the charity register.

Legal Requirements for Accounting Records

All charities (whether registered with the Charity Commission or not) must prepare accounts and make them available on request.  All charities must keep accounting records, and prepare annual accounts which must be made available to the public on request

Charities with a gross income of more than £25,000 in their financial year are required to have their accounts independently examined or audited

Keeping accounting records

These records – for example cash books, invoices, receipts, Gift Aid records etc must be retained for at least 6 years (or at least 3 years in the case of charitable companies); where Gift Aid payments are received records will need to be maintained for 6 years with details of any substantial donors and to identify ‘tainted charity donations’ in accordance with HMRC guidance

An independent examination is an external review of a charity’s accounts and is carried out by an independent person with the requisite ability and practical experience to carry out a competent examination

An examination involves a review of the accounting records kept by the charity, and a comparison of the accounts presented with those records.  This means that all cash books, bank statements, invoices and receipts must also be made available for checking by the independent examiner

Closing Down A Charitable Company

Related imageThe company must first of all be removed from the Companies Register but only if it:

  • hasn’t traded or sold off any stock in the last 3 months
  • hasn’t changed names in the last 3 months
  • isn’t threatened with liquidation
  • has no agreements with creditors, eg a Company Voluntary Arrangement (CVA)

A company can apply to the registrar to be struck off the register and dissolved if it’s no longer needed, for example if:

  • the directors wish to retire and there is no one to take over the running of the company
  • the company is a subsidiary whose name is no longer needed
  • the company was originally set up to exploit an idea that turned out not to be feasible

More details can be found here:

Once the company has been removed from the Companies House Register, it can be removed from the Register of Charities.

A charitable company has an automatic right to expend all of its assets on its purposes.

You can tell the Charity Commission that you have wound it up by completing the closure form. This can be done online – more details  can be found here:

Appointment of Trustees

Charity Commission LogoA charity must follow any rules in their governing document about who appoints new trustees, when, and how, new trustees are appointed and who can be a trustee – the governing document may impose conditions

Co-opted trustees are found most commonly in unincorporated associations or charitable companies where the charity has a membership. Their appointment is under express provisions in the governing document allowing the trustee body to fill vacancies on an ad hoc basis or to supplement the skills of existing trustees.

Trustees may be appointed in a number of different ways – for example:

  • they can be nominated by the other trustees or by another organisation, such as a local authority
  • they may be elected by the charity’s members
  • they may become a trustee by virtue of a post which they occupy, such as a mayor or mayoress of a town, the chief executive of a local health trust or the head master of a school; such trustees are known as ‘ex officio’ trustees

Other than in the case of ex officio trustees, the appointment of a trustee becomes effective only once a prospective trustee has formally agreed to accept the trusteeship. The trusteeship may then begin immediately, or on a specified date.

Following the appointment of a new trustee, trustees must ensure that the Commission is notified of the appointment as soon as possible

Responsibilities of Trustees

Image result for duties of charity trustees ukYou and your co-trustees must make sure that everything your charity does helps (or is intended to help) to achieve the purposes for which it is set up, and no other purpose. This means you should:

  • ensure you understand the charity’s purposes as set out in its governing document
  • plan what your charity will do, and what you want it to achieve
  • be able to explain how all of the charity’s activities are intended to further or support its purposes
  • understand how the charity benefits the public by carrying out its purposes

Spending charity funds on the wrong purposes is a very serious matter; in some cases trustees may have to reimburse the charity personally.

More details can be found here

Selling or Leasing Charity Property

Image result for selling charity propertyThere may be various reasons for disposing of your charity land. You may, for example, want to relocate the charity to more appropriate premises or release some cash that you can apply to other projects.

Before you start, you and the other trustees must be sure that:

  • you have permission to sell or lease the property – either in your governing document or in the law
  • there is nothing in your governing document that prevents you selling or leasing the property
  • your charity actually owns the title to the property
  • the sale or lease is in the charity’s best interests
  • if the property is designated for a particular purpose, such as a recreation ground, that the sale or lease doesn’t go against this

It’s usually straightforward to sell or lease charity land and property – most charities don’t need Charity Commission approval.  You must try to get the best deal for your charity and follow any rules in the law and your governing document.

More detailed information can be found here

For free property advice, guidance and workshops visit the Ethical Property Foundation