Bates Wells Briefing for Charities and Social Enterprises | 1 November 2017

Bates Wells Highlights

Charities, Social Enterprise

Bates Wells Partner Abbie Rumbold has written for the New Statesman about the social care gap.  See here

This week’s Briefing covers the two week period from 16th October.

At a glance

The Fundraising Regulator’s Board have agreed changes to the Code of Fundraising Practice relating to static collections.

The Fundraising Regulator has published its report on complaints received by charities about fundraising in 2016. 

The Court of Appeal has held that the segregation of male and female pupils in an Islamic voluntary-aided school was directly discriminatory. 

The Office of Financial Sanctions Implementation (OFSI) has published new guidance to help charities and other non-governmental organisations that deliver humanitarian aid to comply with financial sanctions.

The Information Commissioner’s Office has confirmed that data controllers will be required to pay a fee under the new data protection regime next year.  

Charity Commission

Regulatory alert – phishing scams

The Commission has issued a regulatory alert warning charities about phishing scams.

Fraud surveys

Co-inciding with Charity Fraud Week last week, the Commission has published two fraud surveys:

The closing date for the surveys is Friday 8 December 2017, after which the Commission will analyse the findings and publish a report of the review on its website. It will summarise the themes and common issues, and share good examples of counter fraud and detection practices.

Register statistics

The Commission has published the latest statistics on the Register of Charities.

As at 30 September 2017, there were 176,443 charities on the Register, with a total annual income of £74.429bn.

Charity Commission funding

Civil Society Media reports the chief executives of the Charity Finance Group, Acevo, Navca and the Small Charities Coalition have written to the Chief Secretary to the Treasury to call for an increase to the Charity Commission’s annual grant. 

Money laundering and terrorist financing

The Charity Commission for England and Wales has publicised the UK’s National Risk Assessment (NRA 2017) of money laundering and terrorist financing and in particular the chapter on non profit organisations (NPO) – which includes charities.  The NRA 2017 assesses the terrorist financing risk of the NPO sector in its entirety to be low, whilst recognising that certain parts of the sector – particularly charities working internationally in certain countries – face significantly higher risks.

Case report

The Commission has published a case report into Shoeboxes for our Heroes, a company not registered as a charity.

The Commission received complaints that the company was being described as a charity on social media. The organisation and its founder were also the subject of adverse media reports. The Commission looked for evidence that the organisation was charitable and should have registered, but concluded there was no such evidence.  The Commission therefore provided regulatory guidance to the founder, warning him that it was illegal for a non-charity to attempt to raise funds by claiming falsely to be a registered charity. The organisation has subsequently registered as a Community Interest Company meaning that it now comes under the remit of the Regulator of Community Interest Companies.

New inquiry

The Commission has announced that it has opened an inquiry into Dream It Believe It Achieve It, a charity working to advance the physical education of children and young people and to relieve disability.  The Commission’s initial concerns about the charity related to fundraising, but the inquiry will be looking at:

  • the administration, governance and management of the charity by the trustees, including its financial controls
  • the charity’s relationship with connected companies and whether these relationships are in the best interests of the charity
  • transactions between the charity and companies connected to the trustees and former trustees, and whether any unauthorised benefits have been received

Charity Tribunal

There are a number of new cases before the Tribunal – no details given as yet:

  • Afifa Kiran
  • Vanessa Laming
  • Zainul Siddiqi
  • Tobias Yeates – this has been listed for a hearing in early 2018

The Tribunal has struck out:

  • An appeal by Joseph Ackerman relating to the conduct of the Charity Commission (and others) in their dealings with a charity called Delapage Limited. The case was struck out on the grounds the appeal did not concern a decision, direction or order of the Charity Commission which is capable of being appealed to the Tribunal.
  • An appeal by Linda Ferguson relating to an anticipated direction of the Charity Commission (given under section 42 of the Charities Act 2011) requiring the name of a charity to be changed – the Tribunal has no powers to hear an appeal of this kind. 


A new Government Grants Information System (GGIS) enables grant information on £100 billion (2016 to 17) worth of grants to be recorded and reported across government departments.  See here for details.

A written submission from 11 charities to the House of Lords Citizenship and Civic Engagement Committee has, among other things, recommended:

  • a legal definition of full-time volunteering, to give volunteers a legal status; 
  • utilising money from dormant assets to support third sector organisations to drive and deliver civil society initiatives; and 
  • closer partnership between schools and charities to increase civic engagement among young people.

The 11 charities are The Scout Association, Leap Confronting Conflict, UK Youth, V Inspired, Girlguiding, NCS Trust, The Mix, Ambition, British Youth Council, Citizenship Foundation, and City Year UK.

New Philanthropy Capital has also published its submission to the Citizenship and Civic Engagement Committee.


Citizen’s rights

The EU Justice Sub-Committee is due to hold an evidence session this Tuesday 31 October 2017 on citizen’s rights post Brexit. Topics for discussion will include:

  • The progress that has been made towards an agreement on citizens’ rights for EU nationals in the UK and UK nationals in the EU;
  • The main hurdles for reaching an agreement on citizens’ rights;
  • The impact on individuals of the delay in guaranteeing residence rights;
  • The legal impact of a ‘no deal’ scenario;
  • The protections offered to UK and EU nationals under human rights law; and
  • The enforcement of any agreement post-Brexit.

Charity sector implications

Third Sector reports that in its 2017 Legacy Giving report, Legacy Foresight has stated that it expects that Brexit and a stagnating housing market will affect charities’ income from legacies.

In the following blog for Charity Times, Caron Bradshaw, Chief Executive Office of Charity Finance Group urges charities to speak up on Brexit.

Local government

The House of Commons Communities and Local Government Committee has launched an inquiry into the impact of Brexit on local authorities. The committee has stated that the role of local authorities post-Brexit is “unclear”, and that it intends to clarify the best outcome from Brexit negotiations for local authorities and which powers currently exercised by EU institutions could be devolved to them after the UK’s withdrawal from the EU.  The committee also intends to examine the effects of Brexit on the:

  • Investment, development, and economic funding of local authorities.
  • Employment of EU nationals on a local level, particularly in areas such as adult social care and construction.

The committee has invited written submissions to its inquiry which can be submitted by online form until 14 November 2017.


Code changes

The Fundraising Regulator’s Board have agreed changes to Section 17 on Static Collections (collecting tins) in the Code of Fundraising Practice.  The full Code changes can be found here. Sections amended include 17.2, 17.3 and 17.4  The FR says these Code changes are designed to allow greater flexibility for charities to determine which contact details (those of the organisation or of the volunteer) are appropriate to provide on their authorisation certificates / letters / badges in order to authorise their volunteers’ static collection activities. The changes will allow charities to address concerns about volunteers disclosing their own personal information by taking responsibility themselves to hold the volunteers’ identifiable information, and offering contact information for the organisation directly to those who wish to verify a collector’s authority.  The Code changes were made on 19th October and organisations have been given a transition period until 31st December 2017 to become compliant.

Fundraising Regulator’s complaints report

The Fundraising Regulator has published its report on complaints received by charities about fundraising in 2016. The report is based on submissions from 893 charities.  Key findings include:

  • The total number of complaints reported by those 893 charities was 42,782.
  • Overall fundraising using direct marketing (which includes contact by telephone, email and addressed direct mail) and face-to-face fundraising, in all forms, was the cause of the most complaints followed by public collections. 
  • The charities who took part sent over 300 million pieces of addressed direct mail and reported receiving just over 16,000 complaints. The Fundraising Regulator noted that this is a very low ratio of complaints versus activity.

Civil Society Media has published this more in-depth look at the report – it also includes some interesting information about compliance with the new 2016 Act requirement for charities over the audit threshold to include details of fundraising complaints in their annual report. 

Online giving

The Fraud Advisory Panel has published “A guide to donating through crowdfunding sites”. 

Giving safely

The Fraud Advisory Panel has published “Giving safely – a guide to donating to UK charities”. 

Also see under Data protection below.

Health and social care

BWB Partner Abbie Rumbold has written for the New Statesman about the social care gap.  

The government has published its response to the Communities and Local Government Select Committee’s report on adult social care.  Key responses made by the government include that it:

  • Disagreed with the recommendation that it should set up a standard process for assessing the costs of care (taking into account local variation in wages and costs). The government stated that commissioning social care was a matter for local authorities who were best placed to understand the needs of local people and communities. In addition, the Care Act 2014 already places a duty on local authorities to have regard to the importance of ensuring the sustainability of the market overall in order to meet the needs of local people.
  • Did not think that the Care Quality Commission’s remit should be extended to include oversight of how local authorities agree prices with care providers and their arrangements for monitoring the care services that they have purchased. The Department of Health publication, Commissioning for Better Outcomes: A Route Map, provides local authorities with sufficient guidance to oversee these activities themselves.
  • Remains committed to further business rates retention as a means of giving local government greater control of the income it raises. Local authorities should be able to direct growth in their business rates as they see fit, whether this be the development of new infrastructure or the funding of other local priorities. These reforms remain a priority for the government.

The Care Quality Commission has published the response to its second set of proposals that aim to simplify and strengthen the way it regulates health and social care in England.

Housing and homelessness

The government is consulting on new guidance to make sure local authorities intervene earlier to help prevent families and individuals becoming homeless.

Social finance

Pioneers Post reports on the HCT Group’s (a social enterprise) merger with Manchester Community Transport Group. Due to the merger and other “organic” growth, HCT Group predicts that its turnover will grow by £12 million next year.

Scott Ro, writing for Pioneers Post provides three tips for social enterprises to get their products to the right people. The tips include focusing on the last yard and not just the last mile, starting with the problem and not your solution, and getting the right size for a sales team.

According to Third Sector, Big Lottery Fund and the Department for Digital, Culture, Media & Sport are offering £4.5m of funding, via the Place Based Social Action programme, to projects that will support social action in local communities. Local partnerships (which could include community members, local charities or businesses, and local authority representatives) can apply to obtain up to £500,000 of funding.

Civil Society reports on the ten outcomes contracts which have been agreed between charities and central and local government. The contracts have launched using cash from the first tranche of funding from the £80m Life Chances Fund – delivered by the Big Lottery Fund on behalf of the Department for Digital, Culture, Media and Sport.

According to Civil Society, the charity sector had a total income of £74.4bn last year. This is a £5.8bn increased from two years ago. Most income came from charitable activities (£38.92bn) and voluntary income (£22.59bn). Trading, investment, and other income make up the rest.

On Big Society Capital’s blog, James Ronicle (Associate Director at Ecorys UK) describes findings from the latest research collaboration between Ecorys UK and the Policy Innovation Research Unit (PIRU). The research found four factors which seem to determine whether a SIB is launched. These include leadership, clear outcomes, shared understanding and data.

Claire Kearney (Investment Director at Big Society Capital (BSC)) shares the launch of a support map which is the first step in pointing intermediaries towards the different resources available in each of the different areas of BSC’s Building Blocks tool (an in-practice guide and self-assessment survey that organisations can use to help identify strengths, development needs and areas where additional support could be valuable).

Jeremy Rogers (Chief Investment Officer at BSC) introduces BSC’s new series of blogs exploring social investment data visualisations. As part of BSC’s transparency initiative, BSC is now launching visualisations of their data to allow users to follow their own paths of enquiry through the data. The visualisation on this edition of the blog is of the initial £1bn of BSC’s committed investments with co-investors. Future data dives will look at how social investment is being used by charities and social enterprises.

Social impact

New Philanthropy Capital has published this blog about what impact measurement means.

Organisations working internationally

The Office of Financial Sanctions Implementation (OFSI) has published new guidance to help charities and other non-governmental organisations that deliver humanitarian aid to comply with financial sanctions. A new factsheet responds to requests, particularly from smaller charities, for clearer, simplified guidance on issues affecting the charity sector.

Culture and creative

Nesta has published a report “Matching the crowd – Combining crowdfunding and institutional funding to get great ideas off the ground”.  The report examines the impact of matched crowdfunding as a new means of getting ideas and projects off the ground, through analysis of a £251,500 matched crowdfunding pilot for arts and heritage projects.  Key findings included:

  • Matched crowdfunding can help leverage additional funds. The £251,500 in match funding provided by Arts Council England and Heritage Lottery Fund as part of the pilot helped leverage an additional £405,941 from the crowd of 4,970 backers. 
  • The pilot largely attracted new supporters and finance for arts and heritage organisations, rather than drawing from existing philanthropic sources. 


The Department for Business, Energy and Industrial Strategy has launched a call for evidence on reform of the Green Deal framework of legislative, commercial and contractual arrangements supporting the Green Deal pay-as-you-save scheme for energy efficiency measures in buildings.  The call for evidence is being made alongside the government’s publication of its Clean Growth Strategy, which sets out a comprehensive set of policies and proposals that aim to deliver increased economic growth and decreased emissions.  The call for evidence closes on 23 November 2017 and will be followed by a consultation.

Campaigning and elections

Civil Society Media reports the Electoral Commission has responded to a letter from NCVO and other sector bodies about the Lobbying Act.

BOND has published this blog “Why we must take on the civil society sceptics to defend charity campaigning”. 

Also see second para under Data protection below.

Data protection

The Data Protection Bill (Bill) second reading debate took place in the House of Lords on 10 October 2017. Members debated the Bill’s key points and issues around EU-UK data flows in light of Brexit. The Information Commissioner published a briefing in advance of the second reading.  The Committee stage in the House of Lords involving a line by line examination of the Bill when amendments can be made is scheduled to start on 30 October 2017.

The ICO has issued:

  • this blog about a Conservative Party telephone campaign carried out in the run up to the 2017 general election.  The ICO found that two small sections of the written scripts used by those making the calls crossed the line from legitimate market research to unlawful direct marketing.
  • this press release about an international survey of the adequacy of website privacy notices. 

GDPR preparations

The Information Commissioner’s Office has :

  • announced it will launch a dedicated telephone service from 1st Nov aimed at helping small businesses (under 250 employees) prepare for new data protection laws.
  • announced plans to simplify its “12 steps to take now” graphic in response to calls from small and micro businesses that they need access to targeted information about how to prepare for the GDPR.
  • confirmed that data controllers will be required to pay a fee under the new data protection regime next year – this stems not from the General Data Protection Regulation but from the Digital Economy Act 2017 (and the proposed Data Protection Bill).  The fee amounts are under consultation at the Department for Digital, Culture, Media and Sport.  The ICO state that fees will be “fair” and will “reflect the relative risk of the organisation’s processing”. A three-tier fee system based on organisational size and turnover is proposed, that will take account of the amount of personal data processed by an organisation. The new fee regime will commence on 1 April 2018. The ICO have warned that annual notifications should be renewed regardless, as failure to do so remains a criminal offence. It foresees that fees paid under the current regime will cover one year, with any new regime fee not becoming payable until a current regime notification would otherwise expire. More detailed information is expected by the end of 2017.

Civil Society Media has this blog on GDPR and consent from Stephen Service of the Fundraising Regulator.

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Disclaimer – The information contained in this update is not intended to be a comprehensive update – it is our selection of the website announcements made in the week up to last Friday which we think will be of interest to charities and social enterprises. The content is necessarily of a general nature – specific advice should always be sought for specific situations.


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 November 1, 2017.