Governance round-up: March 2016

This month we start with the board’s responsibility to have an eye on the horizon and two key NCVO publications. Michael Birtwistle has a roundup on the 2016 Budget and implications for the sector.

While the Road Ahead is our yearly take on the opportunities and threats for your charity in four key areas; politics, the economy, social and technology trends – a useful aid if you’re strategic planning. The summary version is available to all and the full version is downloadable free for members.

That’s the helpful bit. Now…

New anti-advocacy clause in government grant agreements

The Cabinet Office recently published guidance to prevent the use of government grant funding to inform public policy and also bans organisations from discussing issues related to the work funded by the grant with government officials or parliamentarians.

Read our letter to the Prime Minster, signed by over 130 charities, asking him to reconsider the anti-advocacy clause on grants.

My colleague Charlotte Ravenscroft has analysed why the clause is a bad idea. She also asked the Cabinet Office five questions about how the new anti-advocacy clause on grants would be applied and has their answers.

Company law update – register of people with significant control

From 6 April 2016, all companies including charities and social enterprises structured as companies will need to keep a new statutory register alongside their company books – the register of people with significant control (PSC register). Tamsin Anderson from Bates Wells Braithwaite (BWB) outlines the implications they have for charitable companies.

Charity law update

The Charities (Protection and Social Investment) Act is now law and expected to be implemented shortly. Our colleagues at BWB offer this handy summary:

• Charity Commission powers: The Charity Commission will have more regulatory powers over charities, including a new power to give official warnings to charities. In practice will only apply where the commission has regulatory concerns about a charity.
• Disqualification of charity trustees: More people will be automatically disqualified from acting as charity trustees, but this change will not be brought into force for at least 12 months. The Charity Commission will have a new power to disqualify people from serving as trustees.
• Fundraising: The bill imposes more controls over the relationship between charities and commercial organisations that raise funds on their behalf, in a bid to deter aggressive fundraising. Larger charities must include a new statement about their fundraising practices in their annual reports. The bill includes a power to require charities to register with (and adhere to guidance from) a fundraising regulator. These powers are only likely to be brought into force if self-regulation by the sector fails.
• Social investment: Charities’ powers to make social investments are now confirmed in statute. Social investment means investing the charity’s money in a way which does not just seek to make a financial return for the charity, but also aims in some way to further the charity’s purposes.

From the Charity Commission

• Filing annual accounts digitally: The Charity Commission and the Financial Reporting Council have launched the new taxonomies for charities reporting under the Financial Reporting Standard (FRS102). The commission notes the popularity of digital filing by companies with Companies House, and wishes charities to benefit from having this accounts filing option too. The option to file accounts by PDF will remain.
• Commercial partnerships: The commission has issued a ‘regulatory alert’ for trustees about charities’ commercial partnerships and arrangements with their trading subsidiaries in the wake of recent negative media coverage for Age UK.
• Paying to be regulated: In a recent speech at the Charity Commission’s public meeting in Southampton, chair William Shawcross announced a forthcoming consultation on charities making a financial contribution to the regulator. He did say ‘any moves must of course not hit small charities and we would only seek contribution from larger charities’. What the proposed definition or threshold of ‘small charity’ would be was not mentioned. NCVO will keep you posted.
• EU referendum and campaigning: The commission has issued rather stern supplementary guidance for charities wishing to campaign. Elizabeth Chamberlain outlines our problems with the guidance. The Electoral Commission guidance for all campaigners is primarily concerned with regulating expenditure.

Best of the blogs

• Charities need to stand up for Gift Aid or risk losing it says Andrew O’Brien from the Charity Finance Group.
• Using storytelling techniques to show your charity’s impact is really effective and not that complicated. Our Rowan has some great examples.
• A new report shows that government contracting with small and medium size enterprises (SMEs) needs to improve. 99% of charities qualify as SMEs. Nick has the key points.

Training and events

• Practical tools, guidance, best practice and compliance as a voluntary sector employer at the NCVO/BWB HR Conference – 9 May.
• Charity trustees: Induction and refresher training – 29 April.
• Fundraising responsibilities for trustees – 4 May.
• Understanding the numbers: financial intelligence for trustees – 20 May.