Governance

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New Guidance for Charities with a Connection to a Non-Charity

If your charity has a close relationship with a non-charitable organisation – such as its founder, trading subsidiary, or a regular partner – you must manage the connection in your charity’s best interests and protect its independence. You need to plan for the risks as well as the benefits that the connection can bring.

The Charity Commission’s new guidance for charities with a connection to a non-charity will help you to do this. It draws together relevant law and practice, setting out 6 principles to help trustees run and review these connections.

It follows concerns that some relationships between charities and non-charities have damaged public confidence in charity. It will also help us, as the regulator, to better hold charities to account against existing rules.

Source: Charity Commission Newsletter issue 63


Beyond Charity Risk Registers

Charity risk management has traditionally been undertaken by identifying as many risks as possible and then applying an impact/likelihood scoring matrix. This may be undertaken at team, department and then board level. The resulting risk register will be extensive and so the board typically focuses on the top ten highest scoring risks. In practice, however, this leads to much debate and discussion on the scoring methodology and distracts attention away from how the risks are actually being managed.

To achieve better governance of the key strategic risks, many boards accept that there will be a set of headline risks (usually five, but up to six) which will always be key for their organisation. And it is likely that these are similar across many organisations. This does away with the need for subjective scoring methods and an arbitrary cut-off for risks that get board focus (it will always be the eleventh charity risk that comes back to bite you!).  It also saves much time and debate at board meetings.

To read the full Directory of Social Change article click here.

Source: The Directory of Social Change


Major Risks All Charity Board Members Need To Think About – Part 1

Charities need to take risks as well as avoid them, so trustees and managers should draw up a policy to put these in context.

Charities often deal with risk by preparing a register of all the things that could go wrong. But a long list, ranked for probability and impact, does not necessarily mean that you are managing risk.

A better approach is to start by having a conversation among trustees and senior managers about what the risk policy of your charity ought to be. This is about setting the tone from the top. But it is not about avoiding or minimising all risk: a charity’s risk policy needs to state where the charity is prepared to take risks as well.

A simple risk policy for a hypothetical children’s charity might state: “ABC Charity is committed to improving life outcomes for children. The charity is completely intolerant of all risks to children and young people. But to fulfil the charity’s objectives, it has to raise funds and will therefore accept some risk in undertaking new fundraising activities.”

Setting the initial framework allows the board to see the risk register in a context. The trustees of ABC Charity might question whether enough risk is being taken in fundraising. This changes the tone of the conversation at board level, which is too often focused on avoiding risk.

Board members are also much more likely to engage with high-level analysis of the strategic risks if they are small in number. This approach does away with number-based ranking and relies instead on descriptions of the risks and regular monitoring. It can be helpful to think in terms of the big five risks:

Impact

ABC Charity runs a number of programmes to improve children’s lives. While it believes that the programmes are well run and are well received, it needs evidence of outcomes. Unless the charity is able to demonstrate impact, it will not be achieving its objects and is unlikely to receive future funding.

Reputation

A charity’s reputation is everything, but it can be a slippery concept. Boards and senior managers need to understand how reputation weaves through everything a charity does. Inadvertently, you could be giving out contradictory messages that jeopardise your reputation. In fundraising, for example, you might adopt an ethical fundraising policy, but then give the fundraising team aggressive targets; which will matter most to the team?

Source: Directory of Social Change


Thanks But No Thanks: When Should Charities Refuse Donations?

Recent high-profile scandals have left many charity trustees wondering how to do the right thing when it comes to accepting certain donations.

Trustees have rightly been wanting to make sure that money does not come from sources that might compromise the charity’s reputation, independence and work.

Responsible trustees right across the sector will have been watching closely how others have managed difficult decisions in recent months, following concerns about the ethical implications of accepting money linked to sullied commercial brands or gala dinners that fell wide of the mark in terms of what is acceptable in the 21st century.

We seem to be moving beyond the days when fundraisers might have chased corporate giants doling out the biggest cheques without necessarily considering where the money came from.

Only hours after the Presidents Club Charitable Trust story broke, the sector was already alive with questions about whether charities should accept and/or return donations from the charity. And more recently, the Sackler Trust suspended all new charitable donations amid claims linking the family fortune to the opioid crisis in the US.

It’s clear that charities are being increasingly conscious of their purposes when considering these difficult judgements, weighing up concerns about how the funds were raised against the financial impact of turning them down.

Thinking back to when I first became a trustee myself, this wasn’t a mainstream concern; many charities saw maximising their short-term income for the cause as being straightforwardly in their best interests.

What we’re seeing now suggests trustees are listening to an increasingly civic-minded and conscious public, and thinking about how they can best live their charity’s values and stay true to their raison d’être.

This shifting, more conscious approach to trusteeship is not to be knocked. It can be seen across a whole range of issues – from calls for further clarity around ethical investment policies, to charities acknowledging the need for transparency, admitting when projects have failed, and reporting to the Commission when things go wrong.

From where I stand, it seems that the sector is increasingly emboldened by its own values, not just in what it does, but also in how it acts and behaves.

As regulator, we welcome this. Charities are more than just a sum of their balance sheet and services they provide to a community. They belong to the public, and exist for the betterment of society, so it is right that they are considering what the public, their beneficiaries and volunteers think and feel about sensitive issues when making decisions about money.

To read the full Charity Commission Blog click here.

Source: GOV.UK


Charity Whistle Blowers: How and Why We Value Them

We want to make it easier for charity workers and volunteers to draw serious concerns about their charity to our attention, particularly where the charity’s trustees and senior management team aren’t addressing them.

The intelligence that we get from whistleblowers can be vital in helping us to protect charities from financial loss, safeguarding and many other serious risks.

We know that the decision to blow the whistle can be difficult for the individual because of the tensions it creates over their loyalty to the organisation and their own livelihood and status.

That’s why we’ve been significantly upgrading our support for potential whistle blowers in recent months.

Monday 3 June 2019 brings the next improvement when an advice line specifically for charity whistle blowers opens for business.

Callers to this advice line will receive confidential advice to help them decide what to do about raising a serious concern about their charity, including whether and how to raise their concerns with us.

Created by us (with funding from Department for Digital, Culture, Media and Sport) but – crucially – operated independently by the specialist whistleblowing charity Protect, it’s part of our commitment to improving the confidence of individuals when facing what can otherwise be an isolating and difficult decision about speaking up.

This will be something that we pilot, so we will be closely monitoring and evaluating its impact on the experience of charity whistleblowers and on the amount and quality of intelligence it gives us.

Of course, we have to make sure that the whole process of blowing the whistle to us is effective from start to finish. This means, for example, being able to access at the start clear guidance from us. It also means facing as few barriers as possible to raising the sorts of serious concerns we want to hear.

Details of the whistleblowing process and advice line are available in our guidance: Report serious wrongdoing at a charity as a worker or volunteer.

To read the full Charity Commission Blog click here.

Source: GOV.UK


How to Assess Risk for Charities Working Internationally

Charities working internationally may face particular risks due to their operating environment including the application of financial sanctions, greater levels of corruption or criminal activity and the presence of terrorists, proscribed groups or designated entities.

As a risk-led regulator, we focus on areas of higher risk and we expect the same of trustees.

Risk Assessment Tools

The Charity Commissions International Charities Engagement Team, often get asked what does risk assessment mean in practice and how regularly should it be carried out.

With over 168,000 charities registered in England and Wales and approximately 17,000 operating internationally, there isn’t a one size fits all answer to these questions.

There’s no universally recognised criteria for assessing and determining risk and ultimately you must decide what is in the best interest of the charity.

But, they have produced risk management tools which may help you effectively manage risks and protect your charity from harm in Chapter 2 of the Compliance toolkit – Due diligence and Monitoring the end use of funds. It also includes:

• a risk assessment checklist (which highlights key issues to think about)
• a risk assessment matrix (which assesses the likelihood, impact and potential controls)

Recent events in 2019 demonstrate how practical our PESTLE analysis tool can be when assessing the risk arising from a range of external factors, and their impact on a charity working internationally.

To read the full Charity Commission blog click here.

Source: GOV.UK


The Importance of Safeguarding and Protecting People

Safeguarding is a key governance priority for all trustees, not just those working with groups traditionally considered at risk.

You should read the guidance about safeguarding duties for charity trustees which was recently updated.

We advise you to carry out a thorough review of your charity’s safeguarding governance and management arrangements and performance, if you haven’t done in the last 12 months.

It is also important that you contact us about any safeguarding issues, or serious safeguarding incidents, complaints or allegations which have not previously been reported to us.

Find out about reporting serious incidents in your charity as a trustee.

Find out about reporting serious wrongdoing at a charity as a worker or volunteer.

Source: Charity Commission Newsletter Issue 62

 


Quality and Transparency has Fallen in Charity Accounts

The Charity Commission’s recent review of charity accounts has found that just over half of charities are meeting the public benefit reporting requirements.

Just 70% of trustees’ annual reports and accounts in the public reporting review met the basic benchmark of user requirements.

The quality benchmark was based on recent research into trust in charities which found that ‘ensuring a reasonable proportion of donations make it to the end cause’ and ‘making a positive difference to the cause they work for’ were the most important factors for public trust and confidence in charities.

The main reasons why charities’ accounts submissions did not meet the basic benchmark were:

  • failure to evidence that accounts had been subject to independent scrutiny by an auditor or independent examiner, as required by law
  • not providing meaningful information about their charity’s purposes or the activities carried out to achieve those purposes

Also, just 52% of trustees’ annual reports in the public benefit reporting review met the public benefit reporting requirements.

Trustees are falling short on the requirements to explain activities carried out by the charity to further its purposes for the public benefit, and to provide a public benefit statement.

It is important that you explain the activities your charity undertakes and the impact you have. We want to see charity thrive, so charities must be clearer about who they help and what difference they are making.

Source: Charity Commission Newsletter Issue 62


Major Risks All Charity Board Members Need To Think About – Part 2

Charities need to take risks as well as avoid them, so trustees and managers should draw up a policy to put these in context. This is the second part to last week’s article by the Directory of Social Change.

Compliance

While not a high-level strategic issue, boards do need assurance that this is being dealt with properly. Compliance is not simply a box-ticking exercise. For ABC Charity, the inspection of a children’s nursery school by Ofsted will be crucial to its reputation and will help the board understand whether quality standards are being maintained, providing assurance that the operational team is delivering planned services.

Financial sustainability

This relies heavily on other strategic risk areas. A charity that is failing to demonstrate impact may find it difficult to source funding, for example. And non-compliance may damage reputation and jeopardises funding. But financial sustainability also has other aspects: does the charity have a viable business model, or can funders see the value to them in what the charity does and are they prepared to continue paying for it?

If a charity delivers fantastic services, but the costs are so high that no one is prepared to pay the price, then it is not viable. And with scaling down, some charities are finding that their management and overhead costs are now too high in proportion to their size. So financial sustainability risks are not simply about future funding, but also about the structure of the charity’s finances.

Specific risk

Finally, the board needs to consider whether there is a risk area that is specific to the charity. This may well link back to the risk policy and amplify a particular area of concern that needs to be managed well. The charity may be part of a federation, for example, with risks arising from the actions of others who share your name. Or the charity may be a membership organisation, with risks that the members and management team fall out of step and conflict ensues.

These are the big picture issues often missed off a conventional risk register, because the process tends to focus on the detailed listing of risks in various categories. To manage risk well, your charity’s board needs to engage in regular discussions with senior managers about the big five.

Source: Directory of Social Change


The Gap Centre would like to appoint a Company Secretary

The Gap Centre is a vibrant, thriving church-related charity at the very heart of West Bromwich. The Centre offers child care and other children-related facilities, together with youth and community work.

The role of Secretary is to support the Chair and is primarily an administrative role. It will be your responsibility to ensure the Board of Directors conducts itself professionally and effectively and provides sound governance of the charity.

This is a voluntary position with expenses paid, where required.

Main Responsibilities include:
• Responsible for the smooth and efficient running of meetings
• Work collaboratively with the Chair to plan, produce and circulate agendas and supporting papers for Directors meetings.
• Taking minutes and circulating to all Directors
• Checking that Directors and staff have carried out actions agreed at meetings
• Support members in fulfilling their duties and responsibilities, organising induction and ongoing training.

Person Specification:
• Experience of undertaking administrative tasks and minute-taking
• Excellent organisational ability and the ability to work collaboratively and provide support to other committee members&
• Knowledge or experience of business and committee procedures
• Experience of senior management or leadership
• Good independent judgement and ability to think creatively
• Strong interpersonal skills and the ability to communicate clearly both in person and in written form and provide timely advice
• Understanding and acceptance of the legal duties, responsibilities and liabilities of Directors

Time Commitment and Location:
• To attend a quarterly Board Meeting at The Gap Centre in West Bromwich, or the occasional away day at alternative sites.
• Pre and post board meeting administration.

For further information or to discuss the role, please email Les Trumpeter at ltrumpeter@selectlifestyles.co.uk.


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