Tel: 01865 261100

marketing@critchleys.co.uk

Charity Comment Winter 2010

Kath Moss, Charity Consultant

 

Welcome to the Critchleys Winter 2010 Charity Comment. We have set out below some key changes since our Summer newsletter together with our comments.

  Legacies

Does your charity have a fundraising strategy and how do legacies feature in your plan?  Guest contributor Alison Talbot of Blake Lapthorn has covered this topic in her article“Making the Most of Legacies” 

  Review of the Charity SORP

During October, it was announced that the Accounting Standards Board (ASB) will be writing an accounting standard for charities and other public benefit entities. This is part of its work to harmonise UK accounting standards with international standards. It is envisaged that this will be in place for 1 July 2013. 

“In response to feedback during previous consultations, the ASB plans to develop a standard tailored to the needs of public benefit entities such as charities. It will also retain the sector-specific statements of recommended practice (SORPs) where there is a clear need”. For more information, on the consultation which will run to 30 April 2011 see here. 

  Governance

Also during October, the updated governance guidance for the sector was published. There is no “track changes” version of the changes to show what has changed and why.  

In our opinion, the updated guidance is broadly common sense.  Successful organisations generally have a learning culture and will build this guidance into their review programme.

  Charities back on track 2009-10

This is the third report of its type and was published in September 2010 These reports set out themes and lessons from the Charity Commission’s compliance work and inquiries. While the majority of charities are well run, the report suggests that charities continue to be put a risk of abuse or harm because of weak governance and poor management. There are still concerns about issues on safeguarding of vulnerable beneficiaries.

See here for the full article.

We recommend that charities undertake a health check of their policies and procedures.

  Public Benefit & schools

The Attorney General has referred the guidance on Public Benefit and schools to the Charity Tribunal. We understand that it is possible that the case will take place in early 2011. Cynics might say that the concept of public benefit, introduced by the Charities Act 2006, was a simply a means of challenging fee charging.

In our opinion this will help to clarify the long debate which has been running regarding fee charging charities.

  The Charity Commission

The charity sector has always been challenged to do more for less! Now the Charity Commission faces a very similar challenge with significant cuts to its budget arising from the Comprehensive Spending Review. The Commission is consulting with charity trustees for their thoughts – see here. One MP has brought an early day motion to challenge the cuts proposed for the regulator. We wonder how the current review of Practice Note 11 (guidance for external auditors on the conduct of charity audits) will be affected.

  The Transition Fund

(From the ACEVO website) ACEVO is to provide expertise to help shape the new £100m Transition Fund. ACEVO have been announced as a partner of the Big Lottery Fund in the delivery of the Office for Civil Society's new Transition Fund.

The new £100m Fund, announced by the Chancellor in the Comprehensive Spending Review, has been established to support third sector organisations who may be badly affected by public spending cuts and who need to adapt to new public service markets.

  Sharing costs between charities - VAT

Please click here for our article on issues arising from a case on cost sharing between businesses and the possible implications for charities.

  The Finance Act 2010

The Finance Act 2010 has changed the law governing the tax treatment of charities and donations. Click here for our article on the new “Fit & Proper persons” test.

We recommend that all trustees and senior management should sign the HMRC declaration.

  The Bribery Act 2010

This will come into force on 1 April 2011. It creates a new offence of failure by an organisation to prevent a bribe being paid for on or on its behalf. Click here for the firm’s article on the new legislation.

We recommend that charities review the policies and procedures of their trading subsidiaries to address the requirements.

  The Charities Act 2006

For information

• Exempt charities are progressing to registration. 
• The CIO is still not an available form of legal vehicle. 
• The provision on licensing & public collections is still awaited 

• The Act is due for review in 2011

  The Equality Act 2010

The Equality Act came into force on 1 October 2010.  There is a charity exemption in respect of protected characteristics such that a charity can restrict its services on the basis of a protected characteristic.

The test is around the provision of benefits being a proportionate means of achieving a legitimate aim; or for the purpose of preventing or compensating for a disadvantage linked to a the protected characteristic.

The Charity Commission has produced initial guidance for trustees – see here for more information. We understand that there are plans to produce further guidance. 

We recommend that you revisit your objects to ensure that your charity can rely on the exemption.