Bates Wells Briefing for Charities & Social Enterprises | 3 December

Bates Wells highlights

Services
Charity
Sectors
Charities, Social Enterprise
Type
Update

Following the launch of the British Academy’s ‘Principles for Purposeful Businesses’ report, Bates Wells approves of the principles set out by this important study. For more see today’s Briefing.


At a glance

NPC has launched a manifesto for a more impactful charity sector. 

The Information Commissioner’s Office has published detailed guidance on special category data.


Charity Commission

Inquiry and regulatory compliance case reports

Name of organisationBrief descriptionAnything unusual e.g. unusual facts or novel/rare use of Commission’s powers
Regulatory compliance case decision for DownsideA report by the Independent Inquiry into Child Sexual Abuse (IICSA) made a number of recommendations for the charity including the separation of the school and abbey to ensure safeguarding policies and practices could be implemented and maintained for the school, and that safeguarding arrangements were always free from the conflicting priorities of the abbey.The Charity Commission has approved the creation of a new charity to run Downside school, separately to the abbey which will continue as Downside Abbey General Trust.
Inquiry into Kingdom Life Ministries (1109664)Inquiry reportPress releaseThe inquiry was opened into the charity, which runs a church, after repeated failures to file accounts, and the commission subsequently finding that all trustees received unauthorised payments from the charity between June 2013 and November 2018, totalling £456,853.The commission says that the former trustees consistently failed to comply with statutory orders and directions issued by the inquiry, including orders under s.47 and s.84 and rectification measures set out in an Official Warning issued in 2018. These failures constituted misconduct and mismanagement in the administration of the charity.
The inquiry disqualified all 3 former trustees of the charity from serving as a trustee or senior manager of any charity in England and Wales, for a period of 10 years.

Tax

Criminal offence of facilitating tax evasion

Charity Tax Group has published a briefing on steps small incorporated charities, such as churches and sports clubs, should be taking to protect against committing this offence. The briefing was prepared by Trevor James (Association of Church Accountants and Treasurers) and Richard Baldwin (Sport and Recreation Alliance). The guidance includes the following as examples which could lead to the offence being committed:

  • Cash payments to avoid VAT
  • Cash payments to employees.

For more on the background to this offence, see this article by Bates Wells’ Susan Shi.


Election and campaigning

NPC has launched a manifesto for a more impactful charity sector. Also see this accompanying blog by Leah Davis, NPC’s new Head of Policy.


Brexit

Update on the ‘UK Shared Prosperity Fund’

NCVO reports the Conservative party have provided some long-awaited clarity on the UK Shared Prosperity Fund (UKSPF) – which will replace EU funding post-Brexit – in their election manifesto. At a minimum it will match the size of EU Structural Funds in each nation. £500m of this is earmarked for disadvantaged people to help build the ‘skills they need to make a success of life’.

More information on the size of the UKSPF and an explicit mention of disadvantaged people is welcome, but what isn’t clear is what time period the £500m figure would be spread over. ESF funding is currently around £500m a year so NCVO will be pushing for its replacement to provide at least the same level of support that disadvantaged communities would have received.


Data protection

The Information Commissioner’s Office has published detailed guidance on special category data.


Fundraising

See these blogs on making fundraising more environmentally friendly:


Social finance

Investors for impact as risk-takers: defining feature, or distant aspiration? This instalment of the Pioneers Post/EVPA Impact Papers series argues that risk-taking is a necessary core in the DNA of investors for impact.

Backbone Fund – Supporting a thriving voluntary sector. The Paul Hamlyn Foundation announced grants totalling £1.2 million to six organisations in the latest round of the Backbone Fund. The aim of the funding is to champion the vital role that these organisations play in building resilience within the sectors in which the Foundation has an interest. The Fund is unrestricted and makes a lasting commitment of up to £50,000 annually for five years to each organisation.


Impact economy

The British Academy has published the second report from its Future of the Corporation programme, Principles for Purposeful Business, outlining the changes needed to put people and planet at the heart of corporate capitalism, and proposing a new formula for corporate purpose: to profitably solve problems of people and planet, and not profit from causing problems. Among others, the BBC provides commentary on the launch and the Independent’s coverage focuses on corporate ownership. Bates Wells has commented on the report, noting our involvement in the programme. Pioneers Post comments on the launch of the British Academy’s second report, at which Lionel Barber, editor of the FT, called for reform of the current economic system. The article notes that the event’s speakers were unanimous in describing the scale of the world’s current problems as meaning that business is at a unique point in history and needs to change rapidly.

The Global Steering Group for Impact Investment (GSG) signs landmark agreement with UNDP. At the GSG Impact Summit in Buenos Aires it was announced that GSG will work with the UNDP’s Sustainable Development Goals (SDG) Impact initiative to provide SDG ‘Investor Maps’, ‘SDG Impact Assurance Standards’ and other tools and engagement initiatives, to help educate policymakers and direct more funding into achieving the UN SDGs.


Faith based charities

See under Tax above.


Corporate governance

The Institute of Directors (IoD) has called on the next government to reform the corporate governance regime, publishing this manifesto. The proposals are designed to achieve three broad objectives: to increase the accountability of the UK corporate governance system to stakeholders and wider society; to improve the competence and professionalism of UK board members, and to enhance the ability of board members to pursue long-term, sustainable business behaviour (including addressing the challenge of climate change).


Scotland

Registration and public benefit

You may remember two trading subsidiaries of a Scottish charity are pursuing a case to register as charities, New Lanark Trading v OSCR. OSCR rejected the applications for registration and the First Tier Tribunal (FTT) upheld that decision. The Upper Tribunal has now held that the FTT decision did not properly conclude whether the trading activity of the applicants prevented them from registering as charities. The Upper Tribunal judge proposes to exercise its power to re-make the decision of the FTT – but has called for evidence on the issues before doing so. See here for the Upper Tribunal judgement.

Freedom of information

OSCR has published its response to the Scottish Government’s consultation on extending the coverage of FOI to organisations providing services on behalf of a Scottish public authority. OSCR has also posted a blog on this subject encouraging Scottish charities to respond directly or via a sector representative body.


Disclaimer – The information contained in this update is not intended to be a comprehensive update – it is our selection of the website announcements 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.


All content on this page is correct as of December 3, 2019.