The Regulatory Landscape for Charities

Paula Sussex, Chief ExecutiveCharity Commission for England and Wales www.charitycommission.gov.uk Twitter: @chtycommission

7 November 2016

1

Trustees - an extraordinary force

…in 165,000 charities

How the regulatory landscape has changed from 2015Fundraising regulation• New fundraising regulator• Review of the Code of Fundraising Practice• Plans for fundraising preference service • Updated CC20 - more focus on trustee oversight of fundraising

Charities (Protection and Social Investment) Act 2016• Closing gaps and loopholes in the Commission’s protective powers• New reporting requirements for fundraising (1 Nov)• Tighter controls on professional fundraisers and commercial participators (1 Nov)• Backstop powers for fundraising regulation• Enabling – social investment

Trustee duties – before and after

Source: The essential trustee, 2007 and July 2015

2007 2015

• Trustees have … ultimate responsibility for directing the affairs of a charity and ensuring it is.. well-run and delivering the charitable outcomes for the public benefit for which it is set up.

Ensure your charity is carrying out its purposes for the public benefit

Compliance – trustees must: • comply with charity law, reporting requirements,

governing document, other relevant legislation• Avoid conflicts of interest, act with integrity

Comply with your charity’s governing document and the law

Act in your charity’s best interests

Duty of prudence – trustees must:• Use funds reasonably• Avoid undue risk

Manage your charity’s resources responsibly

Duty of care – trustees must: Use reasonable care and skill Consider relevant professional advice

Act with reasonable care and skill

Ensure your charity is accountable

Guidance for boards sharpened up

Themes from our compliance work

Governance

Conflicts of interest

Private benefit

Decision-making

Fundraising

Registration compliance

Financial distress

Source: Tackling Abuse and Mismanagement Report 2015-16, yet to be published, Charity Commission

• Poor record keeping• No evidence even if trustees

suggest they have been managed

Conflicts of interest – the bad

• Actions pursued regardless

• Appointing trustees inappropriately

• Ignoring different, better courses of action

• Conflicts not declared• No systems to identify

them in the first place

• People are in it for themselves• Charities are closed shops

Damage to public

confidenceNot identified

Not preventedNot recorded

Decision making – the good

• Within powers• In good faith• Conflicts managed• Reasonable decisions

• Sufficiently informed• Take account of relevant

factors• Ignore irrelevant factors

• Relevant experience• Diversity• Not just recruited from

closed circles

• Well informed decisions• Good records• Accountability Resulting in… Diverse boards

BehaviourEvidence

• “It is an essential part of our regulatory role, and a strategic priority, to enable trustees to run their charities effectively, in order to maximise the effective use of charitable resources” (Charity Commission strategic plan 2015-18)

• streamlining our permissions processes and automating our straightforward permissions

• better guidance, better reach, better digital services • doing more with more partners

Increasing the focus on enablement

Our digital aim in 2017

PRESENTATION TITLE DATE

End to end digital services, which will build up into a self-service portal through which charities can transact and we will deliver specific and tailored content, guidance and services

Better for charities

PRESENTATION TITLE DATE

• A self-service portal for charities will enable a view of transactions, tailored guidance, reminders etc.

• Increased speed /ease of submission for well-managed charities seeking to make low risk changes

• Consistent, quality services that have been tested with charities to ensure that they meet their needs

• Easier to make small changes or frequent updates

• Improved public access to better quality charity information, which will promote the effective use of charitable resources

Better for us• Automation to remove thousands of low risk transactions each

year, creating capacity for staff to focus on higher-risk regulatory work

• Able to make changes to services faster

• Able to capture better data to better apply risk-led regulation

• Encourage more accurate/timely information on the Register

• Avoid multiple contacts with charities over individual low-risk regulatory activities

• Reduce costs to process paper accounts

Digital support

Launched October 2016 – helping trustees to think about the key questions to ask

https://www.gov.uk/government/publications/making-digital-work-12-questions-for-trustees-to-consider

:

Quality of trusteeship – what do we need to do?

Re-set standards and expectations?

Increase support, development and

guidance?

Make the case for change?

Improve the pipeline of supply for

trustees?