I have spoken to so many charity trustees over the past year or so, and there is a common theme behind their concerns, which is what should they be doing during the pandemic, and whether there will be any changes to the way they are regulated.
The Charity Commission has issued guidance to charity trustees, promising that their approach to regulation during this uncertain period will be as flexible and pragmatic as possible in the public interest, whilst helping trustees to be aware of the wider or longer impact of their decisions on their charity.
Here are some top tips for charity trustees as we continue to live with COVID-19.
How should you be holding your charity meetings?
COVID-19 continues to have a major impact on charity events. As a charity trustee, you will need to consider whether or not you are able to hold meetings and, if you are, how best to do so.
Until the restrictions in place in England and Wales are relaxed (scheduled to be from 19 July 2021) you should hold trustee or member meetings online or by telephone if you can. However, you can still hold trustees’ or members’ meetings in person if this is necessary to provide voluntary or charitable services.
You will need to check your charity’s governing document to see if it allows you to hold meetings online or by telephone. If not, an alternative may be to amend the governing document to allow meetings to be held in this way.
The Charity Commission does recognise that, for some charities, virtual meetings are not a viable solution, nor are socially distanced face-to-face meetings. In such instances, you may consider that you have no choice but to cancel or postpone your AGM or other critical meetings.
If you do consider such a decision to be necessary, you should follow any rules in your charity’s governing document that allow for postponement, adjournment or cancellation. If there are no such rules, but you decide that this is still the best course of action for your charity in the current circumstances, you should record the reasons for this decision to demonstrate good governance of your charity.
Recording your decision is particularly important if it is not possible to hold your AGM, as this may make it difficult for you to finalise your charity’s annual report and accounts. In addition, it is important to note that the provisions of The Corporate Insolvency and Governance Act 2020 allowing charitable companies and Charitable Incorporated Organisations to hold AGMs and other members’ meetings online came to an end on 30 March 2021.
File your annual return, report and accounts on time
Wherever possible, you should file your charity’s annual return, report and accounts to the Charity Commission on time. However, where the situation impacts on your ability to do this, the Charity Commission will allow a filing extension to any otherwise compliant charity that has applied for one.
As restrictions are gradually eased, the Charity Commission has reviewed its approach to filing extensions, and it will be contacting all charities with a filing extension that was in place by 30 June 2021. These charities will need to meet their filing commitments by 30 September 2021.
From 1 July 2021 to 30 September 2021, if you have an imminent filing date and you are unable to meet your filing obligation for a COVID-19 related reason, you can still apply for a new filing extension. The Charity Commission will allow a fixed 3-month extension from the date of your application.
Charity objects – can your charity help with efforts to tackle COVID-19?
Naturally, lots of charities are considering whether they can help the efforts to tackle COVID‑19 and its severe impact on people right across the country. If you want your charity to help, you should first consider your charity’s existing charitable objects. These are set out in your charity’s governing document.
Objects that might already allow you to offer support include:
- the relief of poverty
- the relief of need hardship or distress
- the relief of the elderly
- the advancement of education or advancement in life of young people
- the advancement of health
Trustees of charities with other objects may also be able to adapt and respond to COVID-19 either directly or indirectly. For example, a charity with an object to advance religion may be able to offer support as part of its pastoral work. An arts charity might help relieve isolation through its online work. Your charity may also have a general object that allows you to act for any charitable purposes, or an object that allows you to support the general benefit of a local area.
In considering what you can do under your existing objects, you will need to check whether your objects have restrictions, for example, to benefit a particular local area or class of beneficiaries.
If your existing objects do not allow you to help, you may be able to amend your governing document to change them. But consider carefully whether there are other charities that may be better placed to respond than yours, and also the wider and longer-term impacts of changing your charity’s objects – including on your charity’s existing beneficiaries.
If you want to change your charity’s objects, you should check to see whether you have the power to amend them, for example by using an express power in your governing document. If not, you may need permission from the Charity Commission.
Any changes proposed should be reasonable, consistent with what your charity does, and should not undermine your existing objects.
Could your charity work with a company or business?
Charities can work in a number of ways with non-charitable companies or businesses in an effort to tackle the impact of COVID-19.
For example, you could:
- provide a service or run a project together
- have staff seconded or volunteering for your charity
- enter into a commercial partnership to raise funds (for example, a company donates a percentage of sales and uses your charity’s name on its promotional material)
As charity trustees you should:
- make sure that linking with a business for this purpose is in your charity’s best interests and that you support it
- ensure that any activities you carry out fit with your charity’s purposes
- identify, address, and review risks as well as benefits
- consider any conflicts of interest or risks to your charity’s reputation
Any charity can enter into a commercial partnership to raise money but it must follow specific rules, and the trustees must have decided that it is in the best interests of the charity to do so.
At Barrett & Co, we can assist you with any of the issues raised in this article. If you are interested in finding out more, please contact Jane Whitfield at [email protected] or on 0118 958 9711.
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Hilary Buckle offers a fixed fee initial meeting of one hour to discuss your personal circumstances, your options and your next steps, at a cost of £95 (inc VAT).
Hilary specialises in all aspects of private client work, including Wills, trusts and probate matters. She is a member of the Thames Valley branch of the Society of Trust and Estate Practitioners, Solicitors for the Elderly (SFE) and an associate member of ACTAPS (the Association of Contentious Trust and Probate Specialists).
If you would like to know more or arrange a fixed fee appointment, please email her at [email protected] or call her on 0118 958 9711.