No serious regulatory issues at Plymouth Brethren charities, commission concludes

But the Charity Commission says it has provided advice in areas such as collections from congregations

The Charity Commission has not identified any serious regulatory issues relating to charities set up as part of the Plymouth Brethren Christian Church, a new report from the regulator says.

In a case report based on monitoring work of a sample of 24 of the more than 100 gospel hall trusts registered as charities in recent years, the commission says it has seen enough evidence to suggest there is sufficient engagement with the wider community to demonstrate public benefit.

The Charity Commission had been in a dispute with the Plymouth Brethren since February 2009, when the Preston Down Trust, a Devon-based Plymouth Brethren congregation, applied for charitable status.

The commission rejected the initial application from the trust in June 2012 because the regulator was not satisfied that the trust had been established for the advancement of religion for public benefit. The regulator cited at the time the Plymouth Brethren’s doctrine of separation from the rest of society as one reason it did not accept the application. 

The charity appealed to the charity tribunal in July 2012, but the case was later dropped and the brethren’s charitable status was accepted by the commission in 2014.

At the time, the Preston Down Trust agreed to amend its trust documents by entering into a deed of variation, which sets out the church’s core religious doctrines and practices in a way that is binding on trustees. The commission agreed that after 12 months it would review the charity’s compliance with the deed of variation.

In its latest report, the commission says its monitoring work included speaking to people concerned at the treatment of former members of the brethren, and says it accepts that trustees of the gospel hall trusts are not responsible for the behaviour of individual members.

But the commission’s report says it expects trustees at the charities to ensure their deeds of variation are readily available to members and to have regular discussions with members about the deeds’ provisions.

The commission also provided regulatory advice about the trusts’ collections from its congregation to ensure the charities have sufficient control over their charitable income.

Michelle Russell, director of investigations, monitoring and enforcement at the Charity Commission, said: “In this case, our review is able to provide public reassurance that the trustees of gospel hall trusts are taking steps to embed the principles of the deed of variation in the running of their charities. We have provided regulatory guidance to some individual trusts and expect them to follow that advice consistently.”

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Charities ‘must spend more on leadership and infrastructure’, report concludes

The ICAEW report says charities have shied away from making good investment decisions because of a fear that it might negatively affect public perception

A fear of how the public will view investment in charities’ internal infrastructure has led trustees and managers to “shy away from making good decisions”, a new report warns.

The report, Positive Impacts in Challenging Times, published this week by the Institute for Chartered Accountants in England and Wales, says charities must invest more in leadership and infrastructure in order to retain public trust and operate effectively.

“Trustees and management have often shied away from making good investment decisions because they believe that it will impact negatively on how they are perceived,” it says.

“This has resulted in underinvestment in vital areas such as information technology, skills training, income-generating processes and governance and management.”

The report says charities should be prepared to spend more on infrastructure and support functions if it will improve their efficiency and effectiveness.

“Investments in training, evaluation, internal systems and fundraising are important as they enable charities to improve their performance,” it says.

“The risk is that under-investing in infrastructure can actually lead to a deterioration in a charity’s performance and the resilience needed to be able to sustain effective delivery.”

It says charities are to blame for “perpetuating the myth that reduced overheads mean the charity is more effective” and that “this leads to a vicious cycle of underinvestment and the belief that more can be done with less.

“Charities should be ready to make the necessary investment in infrastructure based on what is needed rather than how it may be perceived. Expenditure decisions should be governed by what is in the best interests of achieving objectives effectively, which may require more investment in infrastructure.

It notes that cost ratios of how and where funds are distributed are flawed “in almost all cases” and “lead to inaccurate conclusions”.

The report also says charities should focus more on the selection, induction and training of trustees to ensure they have the correct skills and experience to carry out their roles.

“All trustees should be able to confirm that, before taking up their appointment, they have received sufficient information about the activities of their charity and their role as a trustee, and that they understand the responsibilities that come with being a trustee,” it recommends.

The report says charities should also be more discerning about “unviable” payment-by-results contracts to deliver public services, the report says.

“The practice of winning the contract at any price can be harmful to charities and the causes they serve,” it says.

It says charities are likely to be better off bidding for such contracts as part of a consortium, so participants can be more efficient by sharing logistics and infrastructure. 

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