Feedback from the Charity Autumn Update


I was lucky enough to attend the recent Charity Autumn Update Seminar delivered by Catherine Rustomji from DWF Law and hosted by BWMacfarlane Chartered Accountants and wanted to share some of her bullet points with Wirral organisations.

With regard to the Charities (Protection and Social Investment) Act 2016 the following powers have been addressed to tackle abuse and mismanagement and to prepare for new fundraising rules.

From July 2016, the Charity Commission has the power to investigate and suspend with regard to a range of conduct, remove trustees following an inquiry, remove disqualified trustees.  There are further powers around action not be be taken, automatic disqualification and social investments.

From October 2016 the Charity Commission can issue a call to disqualify a person from being a trustee (of all charities or a specific charity or as an officer or senior manager).  They will also hold records of disqualification and removal.

From November 2016 the Charity Commission can issue official warnings, records of disqualification and removal, concerns over fundraising.

Larger charities will need to include in an annual return details of fundraising with regard to the approach taken, if they used a professional fundraiser or commercial participator, the voluntary scheme and standard, was there a failure to comply, were activities monitored, what was the number of complaints, what have they done to protect vulnerable people and the public from unreasonable intrusion, unreasonable persistence, and undue pressure.

(For fundraising purposes a large Organisations is considered to have an income over £1m; or income over £250k and assets of over £3.26m.)

In April 2017 it is expected that there will be an automatic disqualification from being a Trustee, and holds on participation in corporate decisions whilst disqualified.

Social Investment by charities was also discussed:

The definition of Social Investment is ‘A “relevant act” carried out “with a view to both directly furthering the charity’s purposes and achieving a financial return for the charity”.

The definition of ‘A Relevant Act’ is ‘An application or use of funds or other property by the charity; or Taking on a commitment in relation to a liability of another person which puts the charity’s funds or property at risk.’  It is usually the former point.

The elements that are relevant to consider at the point of taking the investment are;

The motivation of the Charity, Financial return, Specific legal duties, and that decisions are made in good faith.  Also to be considered; Is it a social investment, do trustees understand it is a social investment, they must be able to show this, did they make the decision in good faith.

Charities are automatically able to use Social Investment according to the Charities Act unless your own governing document restricts you in which case you could take legal advice to get the restriction removed.

The Trustees Duties when making a decision about social investment are to; act in the charity’s best interests, manage resources responsibly, act with reasonable care and skill.  They should act in good faith, only in the interest of the charity, therefore no conflict of interest, they should be sufficiently informed, and consider relevant factors, and be within the range of decisions of reasonable trustees.  Minutes are very important to show the documenting of decisions.

The Fundraising Regulator was also discussed:

Their mission will be to: Protect the public, donors and potential donors from unacceptable fundraising practices, sustain and enhance public confidence, support the sector to create a positive donor experience, ensure consistent fundraising standards.

Their general functions will be:  A code of Fundraising Practice, Rule books on Street Fundraising and Door to Door Fundraising, Investigating and taking action where significant public concern, Adjudicating complaints from the public where it can’t be resolved by the Charity, operating a fundraising preference service, and providing support and advice on good practice.

The Fundraising Regulator may deal with concerns about how a fundraising organisation collects or solicits money, their relationships with donors, their complaints handling process.

The Fundraising Regulator can take remedial action. For example, relevant training or online guidance, seeking evidence of remedy or /and public apology, suspend or submit and clear future fundraising, publication of adjudication findings and referrals to Charity Commission and other regulators.

I hope you have found this useful.

Zel Rodgers – Funding Development Officer at Community Action Wirral


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