Navigating the new normal

Charity regulation: coronavirus latest


All content on this page is correct as of March 17, 2020

As COVID-19 continues to cause disruption in the day-to-day operations of charities, the Charity Commission, OSCR and the Fundraising Regulator have all published advice.

Charity Commission and OSCR

Both the Charity Commission for England and Wales and the Office for the Scottish Charity Regulator (OSCR) have issued statements reminding charities to follow public health advice about the virus by highlighting the available advice from Public Health England and the Scottish Government respectively.

The commission was criticised last week when the initial version of its advice also contained a statement about reporting serious incidents which occur as a result of coronavirus. Charity leaders felt that the approach was burdensome at a difficult time for charities. The commission reissued its original statement, acknowledging that its previous advice was not as helpful as it would have liked, and confirming simply that serious incidents relating to coronavirus should be managed in accordance with the Charity Commission’s existing guidance on serious incident reporting and using charities’ own judgement.

The commission has now issued a further statement in which it has said that charities that are due to submit an Annual Return imminently, but feel unable to do so, can call the commission to request a filing extension. Perhaps more importantly, the commission makes the broader point that its approach to regulation during this period will be “as flexible and supportive as possible”, recognising that charities’ primary interest, and the commission’s, must be looking after the public. It also said that it will regulate the sector taking account of the wider public interest during this unprecedented period.

OSCR’s statement for Scottish charities (issued before this latest one from the commission) takes a proportionate and measured approach and covers a greater number of specific issues that charities are facing. In relation to the need to report notifiable events (Scotland’s equivalent regime to serious incident reporting), OSCR says that, whilst it would need to hear about something if it was likely to have a serious impact on the charity in the longer term (such as the cancellation of a significant fundraising activity which affects the charity’s ability to carry out its activities), OSCR recognises that reporting does not need to be at the very top of a charity’s priority list at this difficult time. Trustees should ensure that they have the time and space to make the right decisions for the organisation, record those decisions and the reasons for them, and then let OSCR know as soon as they can if the trustees think the incident is going to have a significant impact on the charity.

We would hope that the Charity Commission would take a similar reasonable and proportionate approach to that of OSCR in the expectations it places on charities given the unique challenges involved in the current situation.

OSCR also reminds Scottish charities wanting to do something more to help people directly in the community, but which are prevented from doing so by their governing document, of the need to follow the governing document and make sure that the charity is working within its purposes.  However, it says that if trustees think their charity may be uniquely placed to deliver support to a particular community, and a temporary change of purposes would allow it to do so, OSCR will put in place a process aimed at approving such changes as quickly as possible.

OSCR has also issued advice to Scottish charities which may be struggling to hold an AGM and/or file accounts on time due to the virus. It says that whilst charities should try to do this on time, it will take an understanding and proportionate approach to both accounts being filed late with OSCR and charities breaching their governing document by not holding an AGM on time. It also says that whilst it is currently not planning to extend filing deadlines, it will continue to look at this issue and see how to best support the sector at this difficult time. 

The Charity Commission has not yet issued any specific guidance on holding AGMs for English and Welsh charities. If you need any advice about holding or postponing your charity AGM at this time, please speak to your usual Bates Wells contact.

For charities which are established as companies in England & Wales, Companies House has issued guidance about filing accounts on time, saying that you will need to apply for an extension in good time in order to avoid a late filing fee.

Fundraising

Charities will also need to consider what to do in respect of the cancellation of any fundraising events. The Fundraising Regulator has issued advice to charities on COVID-19 and fundraising events.
In relation to donations and sponsorship monies it states: “If your event is cancelled you may need to refund donations made to it. Whether or not you need to will depend on the conditions under which the donation was made. For example, if money was donated on the condition that the fundraiser completes a marathon, donors should be asked if they are happy for funds to go to your organisation anyway, or if they want a refund. If there was no condition attached, for example the fundraising was carried out alongside someone’s marathon effort but without a condition of completion, then refunds may not need to be made.” Charities will also need to consider their contractual terms with event organisers and their insurance policies to check the position in relation to the cancellation or postponement of events. This will be particularly important for any challenge events taking place overseas.

The Fundraising Regulator more recently published guidance called “10 steps to setting up a fundraising campaign” to provide advice to members of the public who want to launch a Covid-19 appeal – https://www.fundraisingregulator.org.uk/more-from-us/resources/10-steps-setting-fundraising-appeal

The Institute of Fundraising has also published some useful guidance:


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 March 17, 2020.

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