Bates Wells Briefing for Charities and Social Enterprises | 17 January 2018

Bates Wells Highlights

Charities, Social Enterprise

Safeguarding policy

A number of charity trustees have received an email this week from the Charity Commission querying the apparent lack of a safeguarding policy for the charity, triggered by the filing of the charity’s annual return.  The Commission says this is something that requires “urgent attention”.  If you would like any advice about whether in fact your charity should have a safeguarding policy, or want advice on what should be covered within a safeguarding policy, please contact BWB’s Claire WhittleJean Tsang or Caraline Johnson.

The GDPR comes into force in May 2018 and has a number of implications for housing associations. BWB are hosting a seminar on 30th January which will provide an overview of the key changes as well as practical tips for housing associations regarding the processing of personal data. Click here to learn more and to book your place.

At a glance

The Charity Commission has announced that the 2016 Act provisions on automatic disqualification of trustees (and charity senior managers) will now be brought into force on 1 August 2018.

The Department for Education has published updated privacy notice model documents for local authorities including wording for schools and local authorities to issue to staff, parents and pupils about the collection of data.

Government has announced a funding pot of £1.7m to support and create mutual organisations to deliver public services.

Charity Commission

CC News

The latest edition of CC News can be found here. This issue states that the 2016 Act provisions on automatic disqualification of trustees (and charity senior managers) will now be brought in on 1 August 2018 and that the form to apply for a waiver of disqualification will be available from February 2018. Guidance on the new rules and the waiver form will be issued on the Commission’s website later this month.

Annual Public Meeting

The commission has provided details about its upcoming annual public meeting, which will be held on 23 January at the Royal Institution and the keynote speech will be delivered by the Duke of Cambridge.

New investigation

The commission has announced that it has opened an inquiry into Hope House School Limited (1121132) a charity which runs a school in Nottingham for children and young people with autism. The inquiry was opened following a “books and record” inspection, which was triggered by an anonymous complaint, and will focus on whether:

  • the trustees have exercised sufficient oversight and control of the charity
  • the financial controls of the charity are adequate and its funds have been properly expended solely in furtherance of its charitable objects
  • potential conflicts of interest and connected party transactions have been properly managed
  • there has been any unauthorised trustee benefit

Independent schools

The commission has issued a regulatory alert about “Payment Diversion Fraud” in the independent schools sector, whereby fraudsters are contacting parents outlining details and payment instructions for school fees (primarily via email and often from the school’s own compromised email system). The victim then makes the required payment into the bank account, which is in the control of the fraudster.

Tax and VAT

Civil Society Media reports the Government has confirmed that charities will claim gift aid as normal despite forthcoming different tax rates coming in Scotland; i.e. will claim basic rate tax assuming 20% basic rate.


Charity sector implications/campaigning

Third Sector reports David Davis, the Secretary of State for Exiting the European Union, has called for UK NGOs to campaign against EU preparations for a “no-deal” Brexit. Davis made the call in a letter last month to Theresa May, the Prime Minister, warning that EU measures to prepare for a scenario in which the UK left the EU without a securing a trade deal could already be damaging British businesses. Davis’s letter, which was leaked to the Financial Times newspaper, said organisations should be encouraged to lobby the EU if they were likely to be affected by EU planning, and specifically mentioned NGOs.  Following the letter, Sue Tibballs, chief executive of the Sheila McKechnie Foundation, which supports campaigning by charities, said the government needed to give a clear view on whether it was comfortable with charity campaigning.

Data protection


The Department for Education (DfE) has published updated privacy notice model documents for local authorities that aim to assist their compliance with the General Data Protection Regulation (GDPR).  The DfE’s model privacy notices provide suggested wording for schools and local authorities to adapt and issue to staff, parents and pupils about the collection of data.

Recent ICO fines

Carphone Warehouse has been issued with one of the largest fines (£400,000) by the Information Commissioner’s Office (ICO), after one of their computer systems was compromised as a result of a cyber-attack in 2015.  The company’s failure to secure the system allowed unauthorised access to the personal data of over three million customers and 1,000 employees.  The compromised customer data included: names, addresses, phone numbers, dates of birth, marital status and, for more than 18,000 customers, historical payment card details.

Also see under Fundraising and Scotland below.


FCA Regulation of online giving sites

Following the introduction of the second European-wide Payment Services Directive (PSD2) persons collecting cash on behalf of a charity and then transferring the cash to the charity electronically will generally need to be regulated by the Financial Conduct Authority (FCA).  The exception to this will be persons who can demonstrate that they are offering this collection service both non-professionally and as part of a not-for-profit or charitable activity.   BWB’s Gillian Roche-Saunders comments “Based on this, volunteer fundraisers doing a one-off collection and transmission activity may be able to use an exemption.  However most online fundraising platforms, or other collection intermediaries who frequently accept and electronically transmit donations to the charity, are likely to be caught by PSD2.  This will particularly be the case if they derive an income stream from charging charities a percentage of the money raised for them (whether or not this is for profit).”  For further information, please speak to Gillian or your usual BWB contact. 

GDPR for fundraisers

The Institute of Fundraising (IOF) is running a series of webinars and a seminar in London.  See here for details. 

Fundraising Preference Service (FPS)

Civil Society Media reports the latest update from the Fundraising Regulator shows that fewer than 5,000 members of the public have signed up to use the Fundraising Preference Service since it launched in July last year. A spokesperson from the Fundraising Regulator told Civil Society News that 4,893 individual members of the public have made 13,843 suppression requests relating to 1,117 charities using the FPS, as of the 31 December 2017.

Society lotteries

See this IOF blog about the pitfalls of a new facility to take part in society lotteries by SMS text.

Also see under Northern Ireland below.


See under Charity Commission and Data Protection above.

Social finance

In this press release published by the Department for Digital, Culture, Media & Sport, Tracey Crouch (Minister for Sport and Civil Society) announced that up to £330 million from dormant bank and building society accounts will be used over the next four years, to help the homeless, disadvantaged young people, local charities and other good causes in the UK.

Pioneer’s Post comments on this press release in its article – Social investors will “innovate and break new ground” with dormant assets money which includes thoughts from Peter Holbrook (CEO of Social Enterprise UK) and Rob Wilson (former civil society minister).

Seb Elsworth (Chief Executive of Access) writing for Third Sector is positively struck by the range of initiatives which will be funded and the different ways in which the money will be used as a resilient social sector requires a healthy mix of finance and funding available on different terms and for different purposes. 

Writing for Civil Society, David Ainsworth identifies the lack of a structured, long-term strategy in dealing with the money from dormant accounts and assets which will accrue to the Reclaim Fund over the next decade. For example, he cautions against focusing these funds on single issues as specific issues may not be as relevant in the future.

Third Sector reports on the government’s offering of a funding pot of £1.7m to support and create mutual organisations to deliver public services. This was announced by Tracy Crouch (Minister for Sport and Civil Society). £1.2m of this is available as match funding to former public sector organisations that deliver services and want to become mutuals. The remaining £500,000 will be used for other purposes including to fund a mentoring scheme and peer-support programme for mutuals.

On Big Society Capital’s (BSC) blog, Nick Benton (Data & Management Incorporation Controller, BSC) shares details about BSC’s third data dive into social investment. This looks at the revenue sources and business models being used by charities and social enterprises. Although the categories used are not based on any industry standard definition, BSC hopes to use open data to build a more complete picture over time.

The University of San Francisco’s Online Master of Public Administration degree program has created an infographic to help readers learn more about crowdfunding and to showcase the recent rise in its popularity. Among other interesting facts, it states that an estimated $10.7 million was raised for civic crowdfunding spread over 1224 civic crowdfunding projects between 2010 and 2013.

Social enterprise and mutuals

See here for a list of Community Interest Companies registered in December 2017. 

The IPPR Commission on Economic Justice has published a policy paper on increasing employee ownership of businesses “Capital Gains – broadening company ownership in the UK”.   The Employee Ownership Association comments on the paper here

Charity mergers

New Philanthropy Capital has published two short articles about charity mergers which are definitely worth a read:


The Office of the Scottish Charity Regulator (OSCR) has published the latest blogpost in its series about GDPR: The Legal Basis for Processing and Transparency by Alison Johnston of the ICO.

The Scottish Charity Appeals Panel (which was set up in accordance with the Charities and Trustee Investment (Scotland) Act 2005 s.75 to deal with appeals against decisions of the Office of the Scottish Charity Regulator) is now having its functions transferred to the First-tier Tribunal for Scotland.

Northern Ireland

Gerald Oppenheim of the Fundraising Regulator has written this blog about self regulation of fundraising in Northern Ireland.

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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 January 17, 2018.