Bates Wells Briefing for Charities & Social Enterprises | 16 June

Bates Wells highlights

Services
Charity
Sectors
Charities, Social Enterprise
Type
Updates

Bates Wells’ Lawrie Simanowitz has, together with the Institute for Voluntary Action Research, produced a new guide: “Thinking about Merger – during COVID-19“. It covers everything from reasons for thinking about merger, the stages in the merger process and what makes a successful merger.

We have developed a bespoke in-house training programme for all of your trustees and senior management. The coronavirus has brought new risks to the fore and impacted on almost every charity’s operations. Your trustees and SMT will be given an excellent overview of the legal and regulatory requirements of a charity and what good governance looks like in this crisis and beyond. The training can be held virtually and we can work around your trustees’ availability. Click here to find out more.


At a glance

A recent survey confirms two-fifths of charities have now applied for emergency government funds. 

The Charity Commission has published a new report into the relationship between Charity, charities and the general public. 

The Regulator of Social Housing has published the results of its second monthly survey of housing associations and local authorities about how they are coping with the coronavirus pandemic.  


Coronavirus – general

NCVO has published an update on public services and lessons from coronavirus

NPC is putting together a series of case studies, in the form of question and answer sessions, which further explore the impact of the coronavirus crisis from the perspective of individual charities.

The first case study is an interview with Rotherfield St Martin, a charity for older people. Further case studies will follow weekly.


Coronavirus – government and other sources of funding

An additional £63m has been confirmed by government to be distributed to local authorities in England to help those who are struggling to afford food and other essentials due to coronavirus.

Ministers have announced an extra £37.8m support package will be available to debt advice providers this year (20-21) so they can continue to provide essential services to help more people who are struggling with their finances due to Coronavirus. The Money and Pensions Service (MaPS), will oversee the allocation of the funds, including to charities, for debt advice and other money guidance services.

Two-fifths of charities have now applied for emergency government funds, finds survey. Pro-bono Economics provides a weekly update for Civil Society Media on how the pandemic is affecting the charity sector, including looking at the increasing numbers of charities that have applied for emergency funding.


Coronavirus – faith based organisations

The government has published guidance for the safe use of places of worship.  

Last week the Minister for Human Rights chaired a coronavirus roundtable which included leaders from the UK’s major faith groups and faith-based aid charities who met virtually to discuss the global impact of coronavirus on religious communities.


Corporate Insolvency and Governance Bill

The Bill had its second reading in the House of Lords last week. Various comments were made on the application of the legislation to the charitable sector. 

The Department for Business, Energy & Industrial Strategy (BEIS) and the Financial Reporting Council have updated their Q&As on company filings and general meetings in the light of the Bill.


Charity Commission

New research report

This week the commission has published a new report into “the relationship between Charity, charities and the general public”.  “Regulating in the public interest” draws together the main findings of research carried out over the last two years to offer a better understanding of:

  • the public in whose interest the Charity Commission regulates;
  • the views of trustees; and
  • the contemporary world in which everyone must operate.

Regulatory case report

Name of organisationBrief descriptionAnything unusual e.g. unusual facts or novel/rare use of Commission’s powers
Prince Andrew Charitable Trust (290140)
Regulatory case report
The charity reported to the commission a potential reputational risk due to media coverage of the television interview with the Duke of York in November 2019. The commission found that resulting action taken by the charity and its subsidiaries was appropriate.However, examination of the charity’s accounts and records identified other concern, including unauthorised payments to a former trustee who was being paid by the charity’s three trading subsidiary companies as a director of those companies.  The former trustee was an employee of the Duke of York’s Household and undertook work for the trading subsidiaries; the payments totalled £355,297. The full amount has now been repaid to the charity by the Duke of York’s household.The charity has notified the commission of its intention to wind up and distribute the remaining charitable funds to other charities with similar objects.The high profile of the case, given the connections with the Royal Family.The report issues a reminder that trustees have a duty to act with reasonable care and skill, taking account of any special knowledge, skill or professional status. It points out that this board of trustees, which included a lawyer, was expected to have had the knowledge and experience to act in accordance with charity law.

Inquiries

The commission has announced that it has agreed the terms of an independent review of the governance, management and finances of the Professional Footballers’ Association Charity, which is currently under a statutory inquiry. The trustees proposed the independent review, which will be carried out by a specialist charity lawyer and will make recommendations to the trustees on relevant matters, including future arrangements for the charity.


General

The campaign, #NeverMoreNeeded, has launched a new website and hub, designed to be a ‘one-stop-shop’ to showcase charities and their work and see the latest campaign developments.

The Association of Charitable Foundations has published a further report as part of its Stronger Foundations project.  The new report “Transparency and engagement:  the pillars of strong foundation practice” is based on an inquiry of a working group which looked at the transparency and engagement of charitable foundations, particularly due to the ‘growing interest’ in what foundations fund, the sources of their funding, where their assets are invested, and how decisions are made. ACF hopes that charitable foundations embrace the pillars of stronger foundation practice outlined in the report and consider them within the context of each foundation to ‘enhance their existing practice.


Data protection

The Government has laid the Age Appropriate Design Code, also known as the Children’s Code, before Parliament.  The code sets out 15 standards that relevant online services should meet to protect children’s privacy. The ICO is developing a package of support to help businesses implement the code during the transition year.


Fundraising

Charity shops

The High Streets Task Force has announced new training, expert advice and online resources for high streets in England.

Arts and higher education fundraising

See here for a guest blog for the Chartered Institute of Fundraising “What new research into arts and higher education fundraisers shows about their resilience”.  


Education

See above under Fundraising.

Ofsted has secured a conviction against a registered independent school for the first time. Rabia Girls’ and Boys’ School had been judged to be inadequate in its past four Ofsted inspections and as a result, Ofsted banned the school from accepting new pupils in 2019. However, the school did so anyway. Luton Magistrates’ Court fined the school £8,000 and fined the trust’s chair £4,000. A Schools Week article is available here.


Social finance and impact investing

Pandemic hits charity investment income. Civil Society Media provides a short commentary on how the pandemic has affected the stock market and therefore charities’ investment income over the next 18 months.

GIIN 2020 Annual Impact Investor Survey. The Global Impact Investing Network has published a report of its 2020 annual survey; this 10th edition captures data from 294 impact investors who collectively manage USD404bn of impact investing assets, representing an important subset of the USD715bn global impact investing market. Pioneers Post provides commentary on the report’s key findings.

The Ford Foundation announced that it is issuing a social impact bond, which will be the first of its kind from a foundation on the United States taxable corporate bond market. The bond’s proceeds will nearly double the Foundation’s grant making capacity to over $1bn, and shall be aimed at ensuring non-profits around the world can carry on their work to serve the world’s most vulnerable communities.

Bates Wells’ Sung-Hyui Park and Louise Harman write for Pioneers Post in Five ways impact investors can deal with the COVID-19 dilemma, following on from a roundtable at which they presented, hosted by European Venture Philanthropy Association. You can view the roundtable on YouTube.

£5m fund under threat as campaigners fight to save social investment tax relief from the scrapheap. Pioneers Post covers the latest in the campaign to persuade the government to renew the SITR scheme, which is due to end next year, referencing a statement issued last month by Chair of Big Society Capital, Harvey McGrath.  

Facing our Greatest Immediate Challenge – The Role of Philanthropy. Philanthropy Impact magazine has released its latest edition. The articles will be released over a weekly three part series. They include an article by Bates Wells’ Oliver Scutt and Phillippa Holland on “COVID-19 – a catalyst for investing in stakeholder capitalism”.


International development

MPs have published an interim report calling for DFID to stay independent.  


Housing

The Regulator of Social Housing has published the results of its second monthly survey of housing associations and local authorities about how they are coping with the coronavirus pandemic.  See here for a summary.


Environment

Last week the UK Business Secretary, Alok Sharma, made an announcement to launch five new business-focused groups with the aim of considering measures to support economic recovery and ensure the UK has the right skills and opportunities in place for its workforce over the next 18 months.  One of the groups will address this theme “Green recovery: How to capture economic growth opportunities from the shift to net zero carbon emissions.”


Procurement and state aid

BEIS has published a letter responding to questions from the Parliamentary EU Internal Market Sub-Committee about the level playing field and state aid. In light of the apparent disparity on the positions of the EU and the UK on the extent of level playing field commitments to be included in the agreement on the future relationship between the EU and the UK, the Committee had asked the BEIS to provide answers to several questions about the type of level playing field provisions being sought by the government in negotiations with the EU and about its plans in relation to any domestic subsidy control/ state aid regime. The response explains that the government plans to develop a separate and independent UK policy on subsidies, which will not involve any alignment with EU rules (although the EU/UK agreement should include reciprocal commitments to transparency and a right to request consultations). The government recognises that there are several complexities to developing a new domestic subsidy control regime, but it is working at pace to develop this policy and will share more detail on domestic subsidy control in due course.


Brexit

See under Procurement and state aid above.

Michael Gove has formally notified the EU that the UK will neither accept nor seek any extension to the Transition Period.  

The House of Lords Select Committee on the Constitution has published Brexit legislation: constitutional issues, a report concerning the constitutional issues and legislative challenges presented by Brexit. The report notes that, although the transition period ends on 31 December 2020, the government is “still only a little past half-way through legislating for Brexit”. Bills concerning agriculture, fisheries, immigration and trade have been reintroduced in the current parliamentary session. However, legislation that deals with the common frameworks between the devolved Parliaments and governments and their respective competencies will, for example, still be needed.


Mergers

In conjunction with the Institute for Voluntary Action Research, Bates Wells’ Lawrie Simanowitz has worked on this new guide: “Thinking about Merger – during COVID-19“. This guide is for for senior staff and trustees of small and medium-sized voluntary organisations, and covers everything from reasons for thinking about merger, the stages in the merger process and what makes a successful merger.


Northern Ireland

The Charity Commission for Northern Ireland is alerting Northern Irish charities about the COVID-19 Charities Fund.


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.


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 16, 2020.