Wednesday, November 30 2022

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Annual performance consultation

The Charity Commission is advice on a new approach to the annual report (AR). The consultation proposes an update and the introduction of additional questions. The changes would increase the number of core questions, which all eligible charities must complete, from 16 to 32. This would impact all charities with an income above £10,000 and all incorporated charities in society, regardless of their income.

At NCVO, we recognize the value of transparency in building trust in our industry. We also support the use of data by the Charity Commission to design its support and regulatory approach. However, we recognize the importance of balance and know that with each additional question comes some work to collect data and check for accuracy. This consultation comes at a time when the sector is facing significant challenges and capacity requirements. Indeed, the Charity Commission notes in its own consultation paper that charities have pointed out that gathering information is the most time-consuming part of the process.

Our initial review of the consultation raised a series of questions that we wish to explore further before formulating the NCVO’s response. These include:

  • What will be the impact of the overall increase in basic questions on the production of the annual return?
  • How easy is it to find the additional data and how reliable would this information be?
  • Is there an overlap between the proposed new questions and the trustee’s annual report?
  • Are the questions clear and easy to understand, and is there a risk of confusion?
  • Are there any questions where the data could be misunderstood or interpreted?

Some more specific areas we want to explore:

  • Is the language and approach to income thresholds appropriate?
  • Does the term “high dependency” ignore important contextual information and how might this impact donor decisions?
  • Are the questions about overseas income and expenses clear and what scenarios might make reporting difficult? for example, crisis response
  • How can valuable information about where and how services are delivered realistically be collected and what complexity or sensitivity needs to be considered?
  • Is the detailed information about the website host realistic?
  • Do members and federated charities feel that the definition of membership is clear and are there any concerns about these issues?
  • Are there any risks in presenting the total headcount and payroll costs without a more detailed explanation of the ratios and justifications?

We will submit a response to the consultation on behalf of the sector and look forward to hearing how the changes will impact your charity. Please complete our Annual Performance Survey which reflects the questions above or email [email protected] with your comments.

We also encourage charities to review the consultation and submit a response to the Charity Commission by September 1.

In the news

Investigation of the Captain Tom Foundation: The Charity Commission has launched an investigation into the Captain Tom Foundation. The Charity Commission opened a case in March 2021 exploring the governance, leadership and spending of the foundation. This has now been compounded following what he describes as “newly identified concerns”. The inquest will examine the charity’s independence from the family of the late Captain Sir Tom Moore and businesses linked to them. It will seek to establish whether the trustees have properly managed the conflicts of interest in relation to the ownership of the registered trademark of the mark “Captain Tom”. The investigation is ongoing. It is important that trustees always make sure to identify, declare and manage cconflicts of interest in accordance with the guidelines of the commission.

Donations from the Prince of Wales Benevolent Fund: The BBC has reported that the Charity Commission is considering whether it should carry out a review of donations received by a Prince of Wales charity. This follows reports by The Sunday Times that millions of euros in cash were handed over to the Prince by a former Prime Minister of Qatar in 2015. This money was allegedly given to the Prince of Wales’s Charitable Fund (PWCF) which , in turn said that it carried out appropriate due diligence checks. As of the date of publication of this blog, the Charity Commission has stated that there will be no investigation of these donations. The story serves as a reminder of the importance of such controls and that charity trustees are involved in establishing a charity’s overall approach to fundraising. The Chartered Institute of Fundraising has produced an excellent guide to accept and decline donations and the Charity Commission due diligence guidance is available here.

New charities: creation and choice of a legal form

We are hosting two webinars with our expert legal partners, Withers LLP, as they cover the essential steps you need to take to set up and register a new charity and the four common legal charity structures and how to choose the best one for your organisation.

Establishment July 12, 2022
Choose your legal structure September 20, 2022

Banking services unavailable or unsuitable

Banking services are a basic requirement for the voluntary sector, but a growing number of charities are struggling to find banking services that meet their needs. More than 1,200 voluntary organizations responded to a survey commissioned by the civil society group between March and May 2022. The results prepared jointly by NCVO, NAVCA, ACRE, WCVA and CFG produced a wealth of detailed information on the issues facing charities face.

Briefing #1 was published on the NAVCA website and explores four key messages that connect the experiences of all respondents:

  1. The services that charities need are becoming less and less available
  2. The services available are not suited to the way charities operate
  3. Charities often encounter poor customer service
  4. Online banking services are not designed or accessible to charities

Director Diversity Resources

Reach Volunteering has released new resources as part of their Trustee recruitment cycle resource pack. These include:

New and updated governance courses: fundraising, safeguarding and supporting good governance

I am happy to say that in response to calls from our members, we will be introducing two new courses:

Fundraising Responsibilities for Trustees: The all-new explore half-day course helps directors understand their charity’s approach to fundraising and fundraising. It is designed to help boards ensure their charity has the resources it needs to thrive in a sustainable way. It also offers important insight into the effective governance of fundraising to ensure it remains ethical and in line with values ​​and legal obligations.

The essentials of protection for trustees: Trustees of charities must take reasonable steps to protect people who come into contact with their charity from harm. This introductory training session explains the key responsibilities of administrators for backing up according to Charity Commission guidelines. It also brings to life best practices for integrating protection into governance, including insurance research and the role of lead protection administrators.

We have also completely overhauled our Good governance support course which is intended for staff and volunteers who help implement structures and processes that help directors carry out their duties and responsibilities. It helps people within this role identify how processes can be improved to align with the purpose and objectives of the organization. For the first time, we are adopting a programmatic approach by organizing the course over four half-days.

Trainings and events

Dan Francois is the principal governance consultant for the NCVO. For more regular updates, follow @mynameisdanfran Where @NCVO on Twitter.


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