Commission loosens restrictions on charities offering core grants to non-charities

New updated guidance from the Charity Commission says charities can do this, ‘provided these are intended only to further the charity’s own purposes’

This story has been clarified, please see final paragraph for details. 

The Charity Commission today abandoned attempts to completely prevent charities from offering grants that cover core costs or overheads to non-charitable organisations.

The commission was criticised last year when it published draft guidance that would have forbidden the practice.

The Association of Charitable Foundations, the National Council for Voluntary Organisations and the Charity Finance Group said at the time that the guidance risked fettering the discretion of trustees and threatened the growth of social-purpose organisations, such as social enterprises and NGOs.

The three organisations accused the commission of trying to “draw tight boundaries around how grants may be used to cover the running costs of organisations that are not charities”.

The regulator’s new updated guidance, published today after consultation, is significantly different.

It says charities “can grant-fund the support costs of activities, services or outcomes delivered by another organisation that is not a charity, provided these are intended only to further the charity’s own purposes”.

Carol Mack, chief executive of the ACF, said it was grateful to the commission for engaging with the sector and “addressing the points we raised during the consultation period”.

Mack added: “It’s really important to recognise that grant-making to organisations that are not charities, such as social enterprises and community groups, can be a highly effective way for charities to achieve their aims.”

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The commission promised to release guidance after a High Court case was brought against it by the advocacy group Cage.

The regulator had asked the Joseph Rowntree Charitable Trust and the Roddick Foundation to agree not to fund Cage any more after it emerged that Cage had once been in contact with Mohammed Emwazi, the Islamic State militant and British citizen nicknamed Jihadi John. It described him as having been a “beautiful young man” and blamed MI5 for his radicalisation.

Elizabeth Chamberlain, head of policy and public services at the NCVO, said: “It’s good to see that the commission has learnt from the Cage case and used it as an opportunity to provide trustees with guidance on what can sometimes be a challenging decision.”

Chamberlain said the guidance “allows freedom for trustees to make decisions based on their own judgement”. But she added: “There’s a bit of a risk that this positive message could be lost because the guidance is quite long and legalistic, which could in itself send the message that this sort of funding is risky or not encouraged.”

Jane Hobson, head of guidance and practice at the commission, said: “Our updated guidance makes it clear that making grants to organisations that are not themselves charities can be an effective way for a charity to fulfil its purposes and meet the needs of those it exists to help.

“There will always be limits and conditions on what a charity can fund, however, and our guidance helps trustees ensure that they consider the relevant risks and boundaries when making such decisions.”

This headline of this story originally read “Commission won’t try to stop charities offering core grants to non-charities”. This has since been changed and the word “completely” added to the top line for clarification. 

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Government begins advertising for next Charity Commission chair

The successful candidate will replace William Shawcross, whose term comes to an end later this year

The government is advertising for applicants to be the next chair of the Charity Commission.

The successful applicant will replace William Shawcross, who is leaving later in the year having been in post since 2012.

The advertisement for the vacancy, which is published through the Centre for Public Appointments, says the successful applicant will be paid £62,500 a year and will work two-and-a-half days a week.

By comparison, Shawcross works three days a week on a £50,000 annual salary. 

The advert says the successful candidate must be able to support the organisation “through a period of significant change and cultural development in either the private or charity/not-for-profit sector”.

The person will be responsible for leading the regulator’s board in setting the commission’s strategic priorities and policy direction over the next three years, it says.

This is likely to include the subject of the regulator charging charities for its services, something the regulator has been edging towards in recent years and on which it is soon due to launch a consultation.

The successful candidate must be able to demonstrate they can be an “accessible and engaging ambassador” for the organisation and “influence high-level stakeholders within government and in parliament, the media, the charity sector and the business world”.

The person must also have an understanding of and interest in the charity sector, “including an awareness of the multifaceted challenges it faces resulting from changing social and economic circumstances”. 

Applicants will be scrutinised by a four-member panel comprising Sue Owen, permanent secretary at the Department for Digital, Culture, Media & Sport, and chair of the panel; Lord Kakkar, chairman of the Judicial Appointments Commission; Julia Unwin, chair of the Independent Inquiry into the Future of Civil Society; and Alan Downey, who is described in the job advert as an “other panel member”. 

Whoever is appointed will also have to attend a pre-appointment hearing before the Culture, Media & Sports Select Committee.

Shawcross, a journalist and writer, has been a controversial chair of the Charity Commission because of comments he has made on issues including chief executive pay and charging charities to fund the regulator.

In 2012, three of the seven MPs on the Public Administration Select Committee of the time opposed his appointment because of concerns about his political impartiality, citing previous support of the Iraq war and the Conservative Party.

The closing date for applications is 3pm on 22 September, and the successful applicant will be expected to serve a term of up to three years.

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Charity Commission in contact with 41 charities during election period

The regulator has published an overview of issues arising from the 2017 general election

Forty-one charities were in contact with the Charity Commission because of issues arising during this year’s general election campaign, the regulator has said.

In an overview of charities’ campaigning and political activity during the most recent election period, which ran from 18 April to 8 June, the commission said that 28 out of the 41 cases it dealt with arose from concerns raised by members of the public or the regulator proactively identifying concerns from media reports.

A further 13 charities contacted the commission to seek advice.

In comparison, 39 charities were in touch with the commission during the 2015 general election.

The majority of the charities the commission dealt with during the most recent election had incomes exceeding £1m a year, the regulator said, and the 41 cases included concerns relating to all the major political parties.

The Charity Commission’s guidance on political activity says that charities must stress their political independence and campaigning should be undertaken only in furtherance of a charity’s charitable purposes.

A number of charities also expressed concerns about the impact of the lobbying act on their ability to campaign during the most recent election, specifically its spending limits on joint campaigning and registration with the Electoral Commission.

Among the charities contacted by the regulator during the 2017 election was the right-wing think tank the Institute of Economic Affairs, in relation to allegedly partisan publications.

The IEA was issued with formal regulatory advice about two publications, one suggesting Conservative manifesto policy proposals and another criticising the Labour manifesto.

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Another two cases highlighted by the commission in its report today is Unity Group Wales, which was displaying Labour Party posters in its high-street centre in Swansea, and the National Council of Hindu Temples, which issued an email to members suggesting support for the Conservative Party.

Unity Group Wales immediately removed the posters when contacted by the commission and made a statement expressing its political neutrality and independence.

The National Council of Hindu Temples initially denied its email was partisan and the commission said it considered an official warning until the charity decided to send a second email saying it was politically neutral.

David Holdsworth, chief operating officer of the Charity Commission, said: “Charities have a strong and proud tradition of campaigning and being at the forefront of social policy. Many charities can and did find practical, valid ways to engage in beneficiary-focused and effective campaigning and political activity in the run-up to this general election.

“However, our report does illustrate that some basic silly mistakes that could have been avoided by reading and following our guidance continue to be made by charities.”

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Charity Commission announces inquiry into youth charity

A statutory inquiry into the Youth Development Summer Camp Project by the regulator was opened last August, partly because there appears to be no safeguarding policy

The Charity Commission has announced an inquiry into a youth charity that failed to inform the regulator that one of its trustees had been arrested in relation to a safeguarding issue.

The commission said in a statement today that it opened a statutory inquiry into the Youth Development Summer Camp Project, which provides or assists in the provision of holiday camps for young people, in part because the charity did not appear to have any written safeguarding policies in place.

The regulator opened the inquiry in August last year but did not announce it until today because of an ongoing police investigation.

It said that although one of the charity’s trustees, who has not been named, was arrested last year under the Safeguarding Vulnerable Groups Act 2006, the charity had not made a serious incident report to the regulator.

The commission is also investigating whether any disclosure and barring checks have been carried out.

“The charity’s annual returns for financial years ending 2014 onwards indicate that the charity has no written safeguarding policies in place, including in relation to risk management or vulnerable beneficiaries,” the regulator said today.

“Due to the nature of the charity’s activities, these factors have raised serious regulatory concerns for the commission and require further examination by way of a statutory inquiry.”

The inquiry will examine matters such as whether the charity’s trustees have properly managed the risk to the charity’s beneficiaries and services, whether they have complied with their legal duties and responsibilities in the governance and management of the charity, particularly in relation to policies and procedures regarding safeguarding, and whether trustees have protected the charity’s assets, including its reputation.

The charity had an income of £69,166 in the year to 15 October 2015, according to its entry on the Charity Commission register.

Third Sector was unable to contact anyone at the charity for comment.

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