Business Charity Awards 2018 open for entries

The deadline for entries is 1 February, and the event takes place in London on 23 May, as part of Third Sector’s Fundraising Week

The Business Charity Awards 2018, which recognise the contribution made by UK businesses to charities and social enterprises, have opened for entries.

The deadline for entries to the awards, which are being produced by Third Sector in partnership with the London Benchmarking Group, is 1 February.

There are 23 categories, including Challenge Event of the Year, CSR Team of the Year and Marketing Initiative of the Year.

Twelve of the awards are devoted to partnerships involving companies from a wide variety of sectors, including automotive and transport, financial services, media and entertainment, and health, beauty and pharmaceuticals.

The Outstanding Employee award will go to an individual in a company who has made an exceptional contribution to charity with the support of his or her employer.

One company from all the winners will be crowned Business of the Year, which was won in 2017 by the financial services firm Investec for its long-standing work with the Bromley by Bow Centre in east London.

The awards will be judged by a panel of experts on corporate social responsibility from businesses and charities, and the winners will be announced at a black-tie dinner at the Marriott Grosvenor Square in London on 23 May.

The awards ceremony is part of Third Sector’s Fundraising Week, which takes place next year between 21 and 25 May and includes a two-day fundraising conference, the Big Questions Live debate and a reception to celebrate the best up-and-coming fundraisers.

For more information on the awards and to enter click here.

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Video interviews: Alexandra Rose Charity

At the recent Third Sector Awards, specialist insurer Markel had the opportunity to speak to charities about the risks they face and how they manage them.

The Alexandra Rose Charity  provides ‘Rose Vouchers’ for fruit and veg to support pregnant women and families living on low incomes to eat more healthily and improve their wellbeing.

Jonathan Pauling, CEO of the Alexandra Rose Charity, discusses how the charity will continue to develop around increasing data protection regulation.

With the upcoming GDPR regulations, all charities need to be aware of data issues and compliance. Smaller charities – such as Alexandra Rose Charity – must be comply with regulations to support the work they do and allow them to grow in effective ways. This may mean a steep learning curve to engage with new technology to make the charity more effective in the long term.

Click here to read more about the General Data Protection Regulation that will be implemented on the 25th of May 2018.

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Charity fraud up by £400m in a year, say latest estimates

The Annual Fraud Indicator 2017 says much of the increase is down to a large rise in procurement fraud, to almost £1.2bn

Fraud against charities has increased by £400m over the past 12 months and is now worth about £2.3bn, the latest estimates show.

The Annual Fraud Indicator 2017, which has been published today by the UK Fraud Costs Measurement Committee based on research by the accountancy firm Crowe Clark Whitehill, the credit rating agency Experian and the University of Portsmouth’s Centre for Counter Fraud Studies, says that a large increase in procurement fraud to almost £1.2bn was a major reason for this rise.

Payroll fraud also increased by £4m to £990m, the report says. In contrast, the report says, grant fraud fell by £35m to £161m.

Total annual fraud losses in the UK were assessed as being worth about the same as the previous year, about £190bn, says today’s report, with three-quarters of this affecting the private sector.

The report says that fraud affecting charities accounted for 1.2 per cent of the total fraud in the UK.

The publication highlights how new technology has been exploited to perpetrate frauds across all sectors, with online banking fraud having grown by 226 per cent and telephone banking fraud by 178 per cent in the past year.

Individual people were defrauded of £6.8bn last year, the report says, which is more than twice the amount of fraud in the charity sector, and public sector fraud losses were £40.4bn.

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The report comes after a number of high-profile frauds in the charity sector, including a £500,000 “vishing and spoofing” fraud against Highland Hospice in Scotland in July.

In another case, Bury Hospice was the victim of a “sophisticated” fraud in July involving an online virus check that resulted in the charity losing £235,000.

Figures released last month by the National Fraud Intelligence Bureau at the City of London Police showed there were 823 employee fraud cases and 298 cases of donation fraud in the past six months, with fraud being a significantly under-reported crime.

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ICO warning after charity worker is convicted of data-protection offence

Robert Morrisey, 63, of Rochdale was given a two-year conditional discharge after sending sensitive information about clients to himself

The Information Commissioner’s Office has warned charities to ensure their staff abide by data-protection legislation after a charity worker was prosecuted for sending private data to his personal email address.

Robert Morrisey, 63, from Rochdale, who worked for the Rochdale Connections Trust, which supports young people and their families, was convicted at Preston Crown Court yesterday of unlawfully obtaining personal data in breach of section 55 of the Data Protection Act 1998.

He had sent 11 emails from his work account to his personal email address on 22 February 2017 that contained spreadsheets including the sensitive personal data of 183 people, three of whom were children.

The ICO, which brought the prosecution, said the data included full names, dates of birth, telephone numbers and medical information.

A further investigation found that Morrisey had sent similar data to his personal account on 14 June 2016, the ICO said.

Morrisey was given a conditional discharge for two years, ordered to pay £1,845.25 in prosecution costs and made to pay a victim surcharge of £15.

Section 55 of the Data Protection Act 1998 prohibits knowingly or recklessly obtaining or disclosing personal data or the information contained in personal data.

Steve Eckersley, head of enforcement at the ICO, said: “People have a right to expect that when they share their personal information with an organisation it will be handled properly and legally. That is especially so when it is sensitive personal data.

“People whose jobs give them access to this type of information need to realise that just because they can access it, that doesn’t mean they should. They need to have a valid legal reason for doing so. Copying sensitive personal information without the necessary permission isn’t a valid reason.”

Rochdale Connections Trust declined to comment on the case.

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Disproportionate number of charity staff ‘paid below the living wage’

A report from the Living Wage Foundation says 26 per cent of sector staff are in that category, with the figure at 21 per cent for the overall workforce

The proportion of workers in the voluntary sector paid less than the living wage is higher than the UK average, research has found.

A new report compiled by the Living Wage Foundation says that 26 per cent of charity workers earn less than the living wage, compared with 21 per cent of the overall UK workforce.

The living wage is a voluntary rate that is higher than the minimum wage and takes into account the cost of living in the UK and in London.

Living wage rates, which are set by the Living Wage Commission, increased this week to £8.75 an hour in the UK and £10.20 an hour in London, up by 30p and 45p per hour respectively on last year’s rates. The minimum wage for people aged over 25 is £7.50 an hour.

The report, which has been released as part of Living Wage Week, is based on data collected by the National Council for Voluntary Organisations and taken from those in the Office for National Statistics’ Labour Force Survey who identified as working for a charity, voluntary organisation or trust from an overall sample size of about 40,000 households.

Researchers found that slightly more than 30 per cent of women in the voluntary sector earned less than the living wage, compared with 21 per cent of men.

They found that 73 per cent of low-paid workers in the voluntary sector were women, even though they made up only 65 per cent of the workforce.

And they found that slightly more than half of charity workers aged between 20 and 24 were paid less than the living wage, but this was slightly below the average for this age group in the workforce as a whole.

Small charities were found to be more likely than larger organisations to pay below the living wage, the researchers found.

Workers in residential care were the most likely to be paid less than the living wage, the report says.

People from ethnic minority backgrounds were particularly affected by low pay, it says, but this might have been down to their under-representation among respondents.

Katherine Chapman, director of the Living Wage Foundation, said the report showed that low pay remained a “real challenge across the charity sector”.

She called for a collaborative approach among charities to ensure that those working in the sector could earn wages that met the cost of living.

“The good news is that more than 800 charities have already signed up as living wage employers,” she said. “We look forward to working with funders, commissioners and charity employers to highlight the benefits of investing in responsible wages, such as increased morale, motivation and staff retention, and reduced absenteeism.”

Sir Stuart Etherington, chief executive of the NCVO, said there was a “clear moral, economic and business case” for increasing the wages of the lowest paid.

“Wherever possible, I would encourage charities to consider becoming living wage employers,” he said.

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We must debate charging for regulation, says Charity Commission chief

In a blog, Helen Stephenson says that pressure on the regulator’s funding means that, though the debate will be heated, it must happen

The Charity Commission is expected to propose asking the largest 2,000 charities in England and Wales to contribute a total of about £7m a year to boost the regulator’s resources and help it increase the support it provides to trustees, its chief executive has indicated.

In a blog post published by the commission today, Helen Stephenson says that although she expects the debate with the sector over charging charities to be a heated one, it must be had.

The commission’s suggestion that it would charge charities for its services have already been opposed by some charity umbrella bodies, with the charity leaders body Acevo, the Charity Finance Group, the Small Charities Coalition and the local infrastructure body Navca setting out their opposition to what they called a “charity tax” in a letter to the Treasury last month.

Stephenson says in her blog today that in the three months since she started as chief executive of the regulator the pressure on its finances are one of two main areas she wants to address in the years ahead – the other being improving its services for trustees.

She says the commission’s budget – which is frozen at £20.3m a year until 2020 – has halved in real terms since 2007, while applications for charity registrations have increased by 40 per cent over the past four years.

If the regulator is to continue to prioritise the issues and cases presenting the highest risks to charities and to public trust, then its ability to deal with lower-risk work will decline and the service it provides to charities could become slower, says Stephenson.

She says she is making the case to government for transitional funding to help it bridge the gap between the regulator’s funding and the “significant increase in demand on our services”.

But she says that the context of continued pressure on public finances and the regulator’s desire to provide more support for trustees has led her to conclude that the commission “must start a sensible, open debate about larger charities making a modest contribution to the cost of parts of their regulation”.

Stephenson says work on charging proposals is at an early stage, “but our current thinking is that in order to improve our existing services and develop new services for trustees, we would need to raise in the region of £7m annually from the largest 2,000 charities on our register”, which is likely to be on a sliding scale according to each charity’s annual income.

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The regulator has previously indicated that charities with annual incomes of £100,000 or more might be asked to pay between £75 and £1,750 a year, depending on the outcome of the consultation.

Stephenson says she is realistic about the timescales involved in developing a charging system, which would require legislation to be pushed through an already crowded parliamentary calendar dominated by Brexit.

She says the regulator needs more resources so it can develop and improve its services to trustees.

“It must continue to become easier to do business with us,” she writes. “We must be more available and accessible with advice and guidance for individual trustees.

“Charity trustees are, after all, overwhelmingly volunteers who are well-intentioned and passionate about the causes they espouse for the public benefit.

“The public needs a regulator that can call out bad practice, but to secure the continued success of the charity sector we also need a regulator that is able to help trustees get it right. We need to recognise trusteeship as a national treasure that we must look after, grow, enable into the future.”

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Terrorism risk for charity funds downgraded by Treasury report from medium-high to low

This year’s National Risk Assessment of Money Laundering and Terrorist Financing says little use of charity funds to finance terrorist activity has happened

The risk of charities being used to fund terrorism has been downgraded from medium-high to low, according to a risk assessment carried out by the Treasury and the Home Office.

The National Risk Assessment of Money Laundering and Terrorist Financing 2017, published yesterday afternoon, says comparatively little terrorist financing is known to have happened given the size of the charity sector. It praises the Charity Commission’s work in this area.

But it warns that some charities, particularly those working abroad, are still vulnerable to this kind of abuse, and says the problem could intensify if banks continue to withdraw services from charities that operate in high-risk areas.

The last National Risk Assessment was published in 2015 and estimated the risk of terrorist financing using charities to be medium-high.

But the latest report deems the risk to be low, saying: “While the risks in the sector are unchanged, government and law enforcement agencies have conducted significant work since 2015 to increase understanding of the sector and the risks that it faces around terrorist financing.

“In comparison to the overall size of the UK charity sector, the amount of known abuse for terrorist financing is very low.”

The document says it is unlikely any charities had been set up specifically to finance terrorism.

But it warns that the 13,000 to 16,000 UK charities that operate internationally face “significantly higher risks”, particularly those operating in areas such as Syria and Iraq.

The 30 per cent of these charities with annual incomes of less than £10,000 are especially vulnerable to abuse because they are less likely to be receiving professional advice and could make honest mistakes or adopt poor practices that put them at risk, the report says.

Where charities have been linked to financing terrorism, the report says, “a significant proportion” have been legitimate charities that have fallen victim to internal abuse by employees, volunteers or trustees, or they have been looted in the country in which they operate.

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A number of aid organisations have had their bank accounts frozen or closed by banks in recent years because of concerns about operating in high-risk areas.

The report acknowledges this and warns: “If this trend persists, de-risking may have the effect of pushing charities out of more intensely regulated areas of activity and into higher risk ways of working, such as transacting through physical cash or unregulated money service businesses, thereby increasing the risks in the sector.”

In the UK, the charities most likely to be at risk are those operating in London, the Midlands and north-west England, according to the report.

The report says the Charity Commission’s outreach programme focusing on charities identified as high-risk has been effective and, with the commission’s guidance and regulatory alerts, was likely to have contributed to reducing the risk of abuse from within charities.

Michelle Russell, director of investigations, monitoring and enforcement at the commission, welcomed the report.

In a statement, she said: “It is essential that those charities that are at greater risk take steps to protect themselves so that charitable funds are not abused.

“Any trace of terrorist financing within the sector corrodes public confidence in charities and cannot be tolerated. One case is one too many, which is why we continue to work proactively with the subsection of the sector that remains at high risk.”

She urged charities to review the compliance resources available in the commission’s website and to ensured they had strong financial, due-diligence and monitoring controls in place to prevent terrorist exploitation.

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Charity Commission ‘dismissive of incidents reported by small charities’, says SCC chief

Mandy Johnson, chief executive of the Small Charities Coalition, tells Radio 4 show that the regulator has told some of its members to deal with serious problems themselves

The Small Charities Coalition has accused the Charity Commission of being “dismissive” about incidents reported to the regulator by small charities.

Appearing on the BBC Radio 4 consumer show You And Yours yesterday, Mandy Johnson, chief executive of the SCC, said the commission was telling charities that reported some incidents they believed to be serious to deal with the problems themselves.

The claims come after guidance released by the Charity Commission last month said too few serious incidents were being reported to the regulator, which was putting charities at risk of further harm.

Johnson said: “We have worked with many of our small charity members to submit serious incident reports to the Charity Commission. Sadly, we’ve found that when the matters relate to small charities, quite often the Charity Commission can be quite dismissive of the reports we have sent through.”

She said that in one case, one of her organisation’s members had reported to the commission concerns about the charity’s chair, who was allegedly abusing their powers.

“We spent months and months collating evidence to demonstrate this to the Charity Commission,” said Johnson.

“We were really disappointed when we got a response from the Charity Commission essentially saying that it was just a matter for the trustees to sort out between themselves.”

In response to a question about whether these incidents were serious enough to warrant a direct response from the commission, Johnson said that issues like the one with the charity chair “can feel very serious to the charities involved” and should be considered as such by the regulator.

But she said the commission needed additional funding from the government if it was to fulfil its role as a regulator properly.

The Charity Commission has had its budget frozen at £20m until 2020 and is expected to launch a consultation on charging charities to fund the regulator in the near future.

In response to Johnson, Sarah Atkinson, director of policy and communications at the Charity Commission, told the programme that it would sometimes be appropriate for charities to deal with internal issues themselves.

“Our first response was that we did ask the trustees to sort it out themselves,” she said. “Where that is not possible, and there is a risk to the charity, we can intervene.”

Atkinson said failing to report fraud to the regulator, Action Fraud or the police risked similar incidents affecting other charities, but when asked by the interviewer she declined to support calls for a legal obligation on all organisations, including charities, to report fraud to the police.

“We think it is essential that charities report fraud to us, so what we have set out in our guidance is how and when to do that,” she said.

“We do want to encourage charities to report to us. It’s not really up to us whether it should be a legal responsibility; what is up to us is that we are able to act on reports of fraud and tackle it.

“We recognise that small charities want and need support from the regulator to enable them to be resilient to fraud so that the money that is for charity gets to charity, and isn’t getting into the pockets of fraudsters.”

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SCVO criticises Scottish government for lack of charity involvement in employment scheme

The umbrella body says charities and social enterprises have been ‘sidelined’ in favour of private companies in contracts to deliver the Fair Start Scotland service

The Scottish Council for Voluntary Organisations has criticised the Scottish government for a perceived lack of charities and social enterprises among the organisations awarded contracts as part of an employment scheme.

Yesterday, the Scottish government announced it had awarded £96m worth of contracts to a mixture of public, private and voluntary sector organisations as part of the Fair Start Scotland service, which will try to help at least 38,000 people across the country find employment.

The announcement detailed a number of charities and social enterprises that were either partners or delivery partners in the programme, with three of the nine areas across Scotland involved in the programme having a third sector organisation as the primary partner delivering the programme.

But SCVO said referring to many of the charities named as “partners” was misleading, and claimed that the Scottish government had rowed back from its promises to put voluntary organisations at the heart of Fair Start. 

John Downie, director of public affairs at SCVO, said: “The Scottish government promised a brave new world in its vision for employability in Scotland.

“Its ambitions were that the third sector would be heart and centre of the new employability landscape, but instead charities and voluntary organisations have been sidelined to make way for private companies which lack the local knowledge required.

“It’s simply not good enough, and ignores the successful values-driven approach of the third sector in providing such vital services across the country.”

A blog post from Downie said the Scottish government’s referral to many of the third sector organisations announced as “partners” was misleading.

The blog post said: “I think more than a few would have been surprised to find themselves described as ‘partners’ of the winning bidders, particularly as while these third sector organisations have agreed in principle to be in the supply chain – depending on negotiations – they haven’t, as one large charity told me, seen the actual business delivery model.

“This would indicate that they’re not really partners – and they say it’s misleading to say they are.”

Fraser Kelly, chief executive of Social Enterprise Scotland, said: “We find it hard to understand how, after such a thorough consultation process, the vast majority of contracts have been awarded to big private sector corporations instead of social enterprises and charities.

“We believe that this was a unique opportunity to reshape the employability landscape in Scotland and to tailor services to the real needs of individuals to get them back to work. It was also an opportunity to grow the capacity of locally owned and controlled social enterprises and, ultimately, to bin the old-fashioned approach of prioritising bargain basement provision.”

The Scottish government did not respond to a request for comment before Third Sector’s deadline. 

Jamie Hepburn, employability minister, told the Scottish parliament yesterday that Fair Start “is an important milestone in our commitment to providing Scottish employment support which will help people faced with barriers into work, access a fairer and more targeted support service”.

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