What the Charity Commission expects from trustees in its casework

CC903546-E4A0-491B-9E28-17765EEBB663Trustees or charity officers contact the Charity Commission for different reasons. These include applying to register a charity, updating the recorded details of a charity or using one of the electronic forms to apply for a service. When you contact the commission, it expects you to always:

  • prepare carefully – this includes reading relevant commission guidance, ensuring you have all the information you need before contacting the commission and being clear what it is you want or need from the commission
  • provide information which is true, complete and correct

When the Charity Commission contacts you, it needs to be confident that its regulatory concerns have been fully addressed. This means the commission expects you to:

  • fully cooperate with it
  • provide full, frank and honest answers to its questions
  • provide information or documents it has asked for by the date specified

This will help ensure the commission’s engagement with your charity is completed as soon as possible.

Sometimes the commission may decide to check some of the information you have given it with other people or organisations, or it may ask for evidence to prove what you are telling it is correct. This is standard practice.

If you cannot meet a deadline the commission has set, you must let it know immediately and before the deadline expires. You must also ensure that you answer the commission’s questions fully and honestly. This means you should not provide limited or partial responses.

If you:

  • do not cooperate with the commission
  • do not provide information the commission has requested, or
  • provide partial, inadequate or no response

the commission is likely to conclude that the regulatory concerns are not resolved or allayed. If you do not provide the information requested, or provide limited, partial or inadequate responses the commission will often consider this a regulatory concern in itself. This may result in it deciding to take stronger regulatory action.

The courts have made clear that they expect trustees to cooperate with the regulator.

The commission will consider non-cooperation as evidence of mismanagement or misconduct, which is a matter the commission takes seriously.

It is a criminal offence under section 60 of the Charities Act 2011 for anyone to knowingly or recklessly provide false or misleading information to the commission. This includes suppressing, concealing or destroying documents.

Charity Trustee – Declaration of Eligibility and Responsibility

Making Decisions At A Charity

Charity Commission on Twitter: "Are you making sound decisions as  #CharityTrustees? Find out how to fulfil your legal responsibilities and  record the decisions you make: https://t.co/4b10voJw8s #ThursdayMotivation # Charity… https://t.co/UBbwRCSX07"Find out about making valid trustee decisions that are in your charity’s best interests by clicking on the numbered links below. 

It is important to follow these steps when making significant or strategic decisions, such as those affecting the charity’s beneficiaries, assets or future direction. The Charity Commission doesn’t expect trustees to follow them step-by-step for minor decisions

  1. Follow the principles
  2. Keep records from the start
  3. Follow your charity’s rules and the law
  4. Get the information you need
  5. Plan your meetings
  6. Manage conflicts of interest
  7. Work together to make decisions
  8. Involve others at your charity

These are the standards that the courts have developed for reviewing decisions made by trustees. Trustees must:

  • act within their powers
  • act in good faith and only in the interests of the charity
  • make sure they are sufficiently informed
  • take account of all relevant factors
  • ignore any irrelevant factors
  • manage conflicts of interest
  • make decisions that are within the range of decisions that a reasonable trustee body could make

They must be able to show how they have followed these principles.

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.

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

The SMART way to set your charity’s objectives

All organisations have a goal which they want to ultimately achieve, but to have any sense of achievement, along the way your organisation needs to assess its progress in manageable chunks called objectives.

Fundamental to any plan is the need to set clear objectives or targets for the organisation against which future service delivery and progress can be monitored.
These objectives should be SMART:

Specific – the situation required should be clearly and precisely
specified 

Measurable – standards should be set against which progress can be
measured
Agreed – all Management Committee members, staff and volunteers
should agree to, and be fully committed to, these
objectives
Realistic – objectives must be realistic i.e. achievable but not too easy
or too challenging
Time-bound – the organisation must specify a time for completion

 

The following objectives are clear, precise and measurable:
“We will relocate our services to Derby by moving to suitable premises costing no more than £2,500 p.a. and we will complete the move in six months’ time”
“We will increase the number of Service Users by 15% during the next year”

If you need further help with this, please contact us here

Charity Trustees and Liability

Charity Trustee Liability InsuranceAbout corporate structures

Some charity structures are corporate bodies. If you choose a structure that forms a corporate body, the law considers your charity to be a person in the same way as an individual.

This gives your charity the legal capacity to do many things in its own name that a person can do, such as:

  • employing paid staff
  • delivering charitable services under contractual agreements
  • entering into commercial contracts in its own name
  • owning freehold or leasehold land or other property

If a charity structure is a corporate body, generally its trustees aren’t personally liable for what it does.

If your charity isn’t a corporate body (‘unincorporated’):

  • the trustees are personally liable for what it does
  • it won’t be able to enter into contracts or control some investments in its own name
  • two or more trustees, a corporate custodian trustee or the charities’ land holding service will have to ‘hold’ any land on your charity’s behalf

More information can be found here

Starting the New Financial Year on the Right Foot

Robust financial management is vital so charities can protect themselves against financial difficulties or abuse, and meet the needs of their beneficiaries.

There’s no better time than the start of the new financial year to assess your charity’s financial situation and financial controls, to see how you can improve them. Doing this is key to making sure that your trustees are able to protect the charity’s assets and resources.

The Charity Commission has recently updated their Charity finances: trustee essentials (CC25) guidance to help trustees and charity staff get to grips with the basic areas of financial management. It also links to more detailed guidance on a number of areas.

Setting Up a Charity

FundraiserThere are 6 steps to setting up a charity.

  1. Find trustees for your charity – you usually need at least 3.
  2. Make sure the charity has ‘charitable purposes for the public benefit’.
  3. Choose a name for your charity.
  4. Choose a structure for your charity.
  5. Create a ‘governing document’.
  6. Register as a charity if your annual income is over £5,000 or if you set up a charitable incorporated organisation (CIO).

More information can be found here