Bates Wells Briefing for Charities & Social Enterprises | 27 June 2017

Bates Wells Highlights

Charities, Social Enterprise

This week is a good week to get ready for coming developments. The Fundraising Preference Service will launch next week and the revised Good Governance Code is expected to be launched in mid-July.

At a glance

The Charity Commission has entered into a series of Memoranda of Understanding with local authorities and the Information Commissioner.

Various sector bodies have responded to the Queen’s Speech.

New Philanthropy Capital has published a report highlighting “8 developments that have the greatest potential to improve evaluation and programme design, and the careful collection and use of data.”

The Competition and Markets Authority has published an update on its market study into care homes for the elderly.

Charity Commission

New inquiry

The Commission has announced it opened a statutory inquiry into Youth Development Summer Camp Project (1086721) back in September 2016.  The charity has objects to provide youth development activities at summer camps to children up to the age of 17. The case began when the Commission was informed by the Metropolitan Police that a charity trustee had been arrested under the Safeguarding Vulnerable Groups and Adults Act 2006. The trustees had not made a serious incident report to the Commission. The charity’s annual returns for financial years’ ending 2014 onwards suggest that the charity has no written safeguarding policies in place, including in relation to risk management or vulnerable beneficiaries. The Commission is investigating whether any Disclosure and Barring checks have been conducted, and more generally, whether the trustees have properly managed risks and have complied with their legal duties and responsibilities, particularly regarding safeguarding.

Inquiry report

The Commission has published its inquiry report into Rabia Educational Trust (1082410) and an accompanying press release. The charity operates an independent Islamic school, The Rabia Girls’ and Boys’ School, in Luton, Bedfordshire. The inquiry concluded that there had been mismanagement and misconduct in the administration of the charity because the trustees:

  • repeatedly failed to submit the charity’s accounts and annual returns to the Commission within the required timescales in breach of their legal duties
  • failed to address the concerns of the Commission and did not comply with the action plan issued in September 2015
  • failed to respond in a meaningful way when the Commission contacted the trustees for an update in March 2016
  • had not complied with the legal requirements to obtain the Commission’s consent when disposing of charitable assets to connected parties (this included failing to seek Commission consent when renting out part of the charity’s office space to a nursery which was a connected party and disposing of another interest in land under a 99 year lease without taking legal or professional advice or registering the lease at the Land Registry)
  • failed to comply with the legal requirements and regulations of another regulator (and as a result of this, the Commission has directed the trustees under section 84 Charities Act 2011 to address the remaining concerns of Ofsted and the Department for Education by appointing someone with expertise in the Independent School Standards to ensure the charity’s schooling provision is fit for purpose).

Grenfell Fire

The Commission has made a statement about how some of the funds raised for those affected by the Grenfell Fire will be allocated, after a joint approach was agreed by several charities which will now be working together to coordinate financial help, with the support and advice of the Commission.


The Commission has published its statistics from 1 April 2016 to 31 March 2017, breaking down the 187 inquiry cases and 1,172 operational compliance cases opened during the year into various classifications:


The Commission has entered into a series of Memoranda of Understanding (‘MoUs) with the following:

An article in Third Sector reports that the reason behind the MoUs with the last three bodies is a pilot project designed to clamp down on business rates avoidance.


Civil Society Media reports the revised Good Governance Code is due to be launched around 11th July.  Thisarticle summarises some expected changes.


Civil Society Media reports the revised Good Governance Code is due to be launched around 11th July.  Thisarticle summarises some expected changes.


The Great Repeal Bill

The Queen’s Speech outlined eight Brexit bills the next Government will aim to pass, including the so-called Great Repeal Bill, and separate bills on customs, trade, immigration, fisheries, agriculture, nuclear safeguards and international sanctions. The Government has stated that there will be no Queen’s Speech in 2018 in order to give MPs more time to deal with Brexit laws.

Brexit deal and negotiations

The Government has also set out some information and documentation about the Article 50 process and the negotiations.

A Chatham House-Kantar survey has found that two-thirds of Europeans in the nine countries surveyed believe the EU should take a hard line with the UK. However Donald Tusk echoed the words of John Lennon to suggest the UK could stay in the EU.

The Politics Studies Association and The UK in a Changing Europe have published a paper considering the EU referendum, one year on.

Queen’s speech

NCVO has published this summary of what the Queen’s speech means for charities. 

Social Enterprise UK has published this comment.


Fundraising Regulator

Following articles in the sector press, the FR has issued this statement about its future funding arrangements.   

Gerald Oppenheim, the FR’s Head of Policy, has published this blog marking the first anniversary of the Fundraising Regulator opening for business.  

Fundraising Preference Service

The FR has confirmed to BWB that this is due to launch on Thursday 6th July.

Fundraising by smaller charities

The Institute of Fundraising (IoF) has announced it will convene a summit between small charities, funding organisations and infrastructure bodies to identify ways to increase fundraising mentoring, advice and training initiatives for smaller charities. The announcement was made as the IoF released their Fundraising Support for Small Charities report and campaign calling for more to be done to help small charities to grow their fundraising skills and capacity in the long-term.

Social impact

New Philanthropy Capital has published “Global innovations in measurement and evaluation”.  The report “highlights 8 developments that we think have the greatest potential to improve evaluation and programme design, and the careful collection and use of data.”

See under Philanthropy below.

Social finance

Pioneers Post reports that UpEffect – a crowdfunding site run by a Muslim woman – boasts a 100% successful funding record with all 12 social enterprises on the site having won the finance they need.

In their overview of developments in the impact investing space, Pioneer’s Post also reports that two new products launched this week promise to open up impact investing to individual investors. The first is the Impact Investment Trust PLC. It is a publicly listed vehicle and shares will begin trading from 10th July. Its investment advisor is Obviam, who manages the Swiss government’s development portfolio since 1998. It aims to generate an annual 8% return for long term investors. The other product is Dolphin Living Retail Charity Bond. This is the fifth bond to be issued by Allia’s Retail Charity Bonds Platform. The bond offer closed in 24 hours after exceeding the target of £25 million. The money will be used to acquire more affordable housing.

The same article also reports on the following key developments:

  • Toniic’s recently published T100 report which contains insights from impact advisors and consultants. The report considered responses from 37 impact investment intermediaries. Key findings included a growth in offerings for those who want to invest impactfully irrespective of geographic location and portfolio size; and
  • A big boost to financial inclusion as Leapfrog Investments and Omidyar Network’s acquired a stake in Cignifi, which uses big data to create financial profits in emerging markets. 

Third Sector reports that the Big Lottery Fund and the Lloyds Bank Foundation have launched a new funding pilot to give small charities better financial support for their work in local communities. The foundation identified 22 charities it had recently funded and which the grant-maker believed were in need of additional funding. Those charities have been offered a share of an additional funding pot worth almost £400,000 from the Big Lottery Fund without having to go through another time-consuming grant application or monitoring process. 

Civil Society reports that Resonance Bristol SITR Fund – an impact investment fund offering tax breaks for lending money to charities has raised £2.1m – the first large-scale application of the relief. So far the fund has 70 investors, the majority of which from Bristol or the surrounding areas and 10 wealth managers and independent financial advisers whose clients have invested in the fund. The company has published its first annual social impact report for the fund, which has invested £900,000 of the £2.1m raised so far, in five social enterprises. The fund remains open to eligible investors on a quarterly basis, and aims to raise £5m by the end of the year.

Big Society Capital blog – Shifting the dial in the provision of small scale finance

Rebecca McCartney from Big Society Capital reports on the launch of Homeless Link’s Social Investment Fund which marks the fifth Growth Fund that has been launched to date. The new fund will establish new investors offering a different route for organisations to access social investment including membership bodies like Homeless Link. Once the Growth Fund is fully deployed, there will be over £45 million available in blended small loans and grants to charities and social enterprises. The article also notes that other funders are showing interest in providing small loans, such as ASDA Community Capital, a partnership between Social Investment Scotland (SIS) and ASDA, that uses the proceeds of the plastic bag tax to provide small loans to social enterprises in Scotland and sits alongside the ASDA Supplier Development Academy for social enterprises to support product development and an opportunity to pitch to ASDA. Another growing source of small scale investment is from individual investors that are putting Social Investment Tax Relief (SITR) to use. FareShare South West is one social enterprise that received £70,000 investment from individual investors using SITR to scale its distribution of fit-for-purpose food going to waste to local organisations working with vulnerable people to ensure they have nutritious food.

Social Finance has published “Refugee community sponsorship: A guide to becoming a sponsor”. 

On 23 June 2017, the Law Commission published a report on pension funds and social investment. In the report, the Commission looks at whether there are any legal or regulatory barriers to using pension funds for social impact, including investment in social enterprises. The Commission launched a call for evidence on pension funds and social investment in November 2016, following a request from the government for the Commission to review the law governing how far pension funds may or should consider issues of social impact when making investment decisions.

Health and social care

The Competition and Markets Authority (CMA) has published an update on its market study into care homes for the elderly, setting out its initial findings which include:

  • that complaints and redress systems often do not work well.
  • there are a number of business practices and contract terms that might break consumer law. The CMA has already opened a consumer enforcement investigation into concerns about certain care homes charging families for extended periods after a resident has died and homes charging large upfront fees.
  • indications that there are at present weak signals and incentives for the sector to undertake future investment necessary to grow capacity primarily intended to serve state-funded residents.

The CMA invites comments by 5 July 2017.


NAVCA has published a report to highlight how a Single Point of Contact (SPOC) commissioning model provides better services for people and communities, improves their wellbeing and can save money.  Neil Cleeveley, Chief Executive of NAVCAcomments “Government and commissioners need to take heed of this report. It shows how a SPOC model improves outcomes and saves money. Commissioners need to be able to either adopt this model or be ready to demonstrate how their chosen alternative is better at improving people’s wellbeing.”

Data protection

The Information Commissioner’s Office (ICO) has issued a £50,000 fine to MyHome Installations Ltd for pursuing people who had specifically opted out of telephone marketing.

Also see under Campaigning and elections below.

Campaigning and elections

The ICO has said it will be asking the Conservative Party about the marketing campaigns conducted from a call centre featured in a Channel Four News undercover investigation.

The Electoral Commission has published details of two concluded investigations where sanctions have been applied.

  • an individual Mr Peter Harris has been fined £12,000 for failing to deliver his spending return and audit report for the EU Referendum on time.
  • the Democratic Unionist Party has been £4,000 because the spending return it delivered for the May 2016 Northern Ireland Assembly election was inaccurate.

This information is necessarily of a general nature and doesn’t constitute legal advice. This is not a substitute for formal legal advice, given in the context of full information under an engagement with Bates Wells.

All content on this page is correct as of June 27, 2017.