Charities - New Challenges New Opportunities

We have seen significant changes in the governance environment within which charities must operate over the last 18 months or so including a number of key developments:-

• Action by the Information Commissioner’s Office in fining eleven charities for failure to comply with Data Protection rules and regulations.
• The publication by the Charity Commissioners of a Governance Code.
• The implementation of the Fundraising Code by the Fundraising Regulator and the implementation of the Fundraising Preference Service.

The central objective behind the actions of these three organisations is to ensure:-

• Integrity
• Transparency
• Accountability

This is to be welcomed by charities.  However, as they face the daily challenge of meeting the needs for those they seek to support it can prove to be a bureaucratic nightmare.

However, getting the culture right will get charities into the habit of good practice very quickly and therefore these changes are to be welcomed and not ignored.

Recommendations

We recommend that your Board of Trustees urgently review and rolls out an audit covering the following points:-

• What checks and balances are in place at board level to ensure accountability, transparency and integrity? If there are areas where there are gaps then they should be urgently addressed.
• Are there the correct contractual documentation in place to ensure that the above principles are adhered to? This could include contracts/service agreements ensuring that senior executives/managers are policed by the correct legal requirements and also that policies and procedures are in place to develop good practice.
• Policies and procedures particularly in relation to whistleblowing and social media are key. If somebody has a problem within the organisation and they are prevented from whistleblowing then this can have severely adverse consequences for a charity when a misdemeanour comes to light.  Furthermore, if employees, workers or volunteers are using social media in an inappropriate manner then again this can cause problems for a charity.
• Has there been sufficient training for the Board on recent developments and also has this training been cascaded down to all members of the team.

Transparency and accountability are principles to be welcomed and this is part of a deeper change that is taking place in relation to the charities’ relationship with donors and those who they seek to serve.  Regulatory bodies are rightly expecting high standards and certainly the public are expecting a more open and accountable system so they can see exactly where their money is directed.  These changes are not to be feared. 

The development of good practice and good culture is to be encouraged.  It may need some internal shaking up within organisations but the short term pain will be worth it to ensure that charities are well placed to meet the challenges that they will undoubtedly face in the future giving the changing population and the continuing reduction of government spending and support in certain key areas.

If you require advice on charity regulation compliance or assistance on how to resolve and prevent breaches, please do not hesitate to contact David Gibson – Head of Charities Fundraising Regulation at Short, Richardson & Forth on 0191 211 1524 or email, Andrew Swan – Head of Regulation and Financial Crime or Sheila Ramshaw - Specialist in Regulation & Financial Crime.