A summary of the key takeaways from a recent webinar Charities legal and regulatory preview.

"Prevention rather than cure: understand and embrace the quiet revolution in charity regulation"

Not our words, but those of the Chief Executive of the Charity Commission back in April when she spoke of the potential of My Charity Commission Account being rolled out for all charity trustees.  

And if you thought the draft Economic Crime and Corporate Transparency Bill making its way rapidly through Parliament has nothing to do with your charity, then think again. A recent amendment to the Bill means that all corporate charities should be aware of the proposed offence to failure to prevent fraud because they might be prosecuted under it: the initial proposal to limit the offence only to “large organisations” has disappeared from the latest version of the Bill which now awaits its final reading in the House of Lords before returning to the Commons for approval and Royal Assent.

Ignorance of the law is no defence, so this webinar will prepare you to navigate an increasingly complicated regulatory framework for charities.

We review a variety of topics including: 

• implementation of the remaining provisions of the Charities Act 2022,
• the new failure to prevent fraud offence,
• Martyn’s Law,
• and the roll out of trustees’ My Charity Commission Account and the revised annual return

Key takeaway notes

Charity legal and regulatory preview: Skating to where the puck is going to be 

Before people packed up their buckets and spades and headed to the beaches on 12 July we ran a bite-size lunchtime webinar looking forward to legal and regulatory changes which will impact charities in the second half of 2013. 

We focused on four areas: 

• upcoming changes being introduced by the Charities Act 2022;
• the Economic Crime and Corporate Transparency Bill;
• the Terrorism (Protection of Premises) Bill; and
• the new My Charity Commission Account and additional questions for the 2023 Annual Return. 

We chose these topics so charities can mitigate risk and prevent rather than cure, skating to where the puck is going to be, not where it has been been, like Wayne Gretzky who achieved legendary status in ice hockey, despite his unremarkable size and strength, because of his unrivalled intelligence, stamina and reading of the game. 

Here is our charity checklist for the summer of 2023.

Do you need to revisit your charity’s objects and any funds it holds on special trusts? 

• Are your objects fit for purpose or should they be revised?
• If they need changing, if your charity is a company and a high-profile one at that, you may be best dealing with this now rather than when the third tranche of provisions in the Charities Act 2022 come into force at some point later this year.
• If you have special trusts whose annual income doesn’t exceed £10,000 then consider using helpful existing law before it is withdrawn, again before the end of 2023.

Review schemes of delegation e.g. for property disposals and ex gratia payments

• Changes will come into force that will eliminate the need for registered charities to secure trustee certification in documentation disposing of land. If such a charity routinely disposes of land but its board doesn’t already delegate the execution of this task then it may want to reconsider its approach.
• The smart money is on most of the proposed changes to the ex gratia order regime coming into force before the year is out, so again this presents an opportunity to a board to rethink the extent to which a charity can unleash its talent by bringing its delegation (and supervision) to new levels.

Don’t consider the forthcoming new power of the Charity Commission to approve trustee remuneration as a get out of jail free card.

• Trustees are not entitled to receive benefits - in particular, payment - from their charity unless this can be justified and has been properly authorised. Are any of your trustees paid by your charity (or its trading companies), even if that is not for acting as trustees? 
• If so, what is the rationale, and have appropriate processes been followed and documented?

Are you aware of the Economic Crime and Corporate Transparency Bill making its way through parliament?

• Prepare for the introduction of the corporate offence of failure to prevent fraud. Did you know, as things stand, (but which may change before the Bill becomes an Act) that all incorporated charities may become liable where a specified offence is committed by an employee or agent? 
• Are you planning to review your anti-fraud policies, systems and controls to demonstrate “all reasonable procedures” have been followed? 

If your charity will be covered by Martyn’s Law – the proposed Terrorism (Protection of Premises) Act – what do you need to be planning now?

• Will your charity be covered by this legislation?
• If so, will you have standard or enhanced duties?
• And in each case to what extent can you avoid re-inventing the wheel in producing the relevant evaluation/ risk assessment?

Ensure your charity has appropriate policies, that they are implemented and that your people are regularly trained on them.

• You may have the best written policies in the world, but which ones are key, does everyone follow them, and do they achieve what you want? 
• Have a look at the specific policies the Charity Commission will expect charities to have in place and consider whether they are appropriate for your charity – because you will be asked about this in the next annual return you have to complete. 

Prepare your board for the rolling out of My Charity Commission account

• How engaged are all your trustees in the running of your charity? Do they rely on a couple of diligent board members to deal with the detail?
• How much better could your board work and your charity function if each trustee played their part, with a good awareness of their legal and governance responsibilities, as a group providing strategic leadership and scrutiny and support to executive teams charged with the day-to-day running of the organisation? The recently published latest annual research commissioned by the Charity Commission indicates there are still too few trustees who feel the need to engage with the support the commission provides.

If your charity can address all these questions in the coming months then that should help it to stay ahead of the game.