The Regulator for Charities in England and Wales
Summer 2006
In this issue:
A lot has happened in the charity world since the last edition of Charity Commission News and that change has been reflected in the ongoing improvement in the services we offer you. Changes include the launch of our new Reception Centre, Charity Commission Direct, and updated guidance to deal with the issues charity trustees increasingly have to face, such as CRB checks.
We’re also keeping pace with the increasing trend for some charities to deliver public services, and we’d like to have a clear picture of how this is affecting charities generally. We’re therefore running an online survey into this area; more details are included in this newsletter.
Chairing the Charity Commission has been an exciting challenge that I will miss when I move on this summer. The Commission has changed enormously during my three years here and I’m proud of what has been achieved. Everyone at the Commission has approached the changes with enthusiasm, ability, dedication and support. I remain passionately involved in the future of the sector and wish my successor the same sense of achievement, as the Commission completes its journey to becoming a truly modern regulator.
Geraldine Peacock, Chairman
Charity Commission Direct launched
We launched our central ‘reception’ unit, Charity Commission Direct, on 16 May, to ensure that new cases go straight to the right part of the Commission. We’ve designed this new frontline service to meet the needs of all our customers, from trustees to the public. Key features of the new service which trustees might find useful include:
We'll be developing Charity Commission Direct to make sure we continually improve and adapt our service to make it easier and quicker to use.
Public service delivery – surveying the sector
Few trustees can have failed to notice the high profile being given to charities delivering public services on behalf of statutory authorities. It’s an area the Government is urging charities and the voluntary sector to consider but one which charities themselves need to think carefully about before undertaking.
Our Charities and public service delivery conference, held in March, brought together charities engaged in this type of work to share their experiences and clarify the areas they need to consider. It was a very useful day and will help feed in to revised guidance in this area which we’ll be publishing later in the summer. A report of the event can be found on our website under ‘Strategies, Plans and Reports’.
While a number of surveys have been undertaken in this field, the full scope and extent of this work being done by charities isn’t known. So we’re asking for your help to complete an online survey into public service delivery. We are running the survey online for cost reasons but we want to hear from as many charities as possible. It shouldn't take long to complete and asks for information that should be readily to hand. The survey is available via a link on the Home Page of our website. If you don't have internet access please try your local library. Alternatively, your local Council for Voluntary Service may be able to provide access or tell you where it's available. To get details of your local CVS, contact Charity Commission Direct on 0845 3000 218.
The survey runs until 30 June and we’ll announce the findings via our website and in a future edition of this newsletter.
Charities and customer service - cause for complaint?
Our latest research report, Cause for complaint? – How charities manage complaints about their services shows that only 30% of charities currently have customer complaints systems in place. Charities with complaints systems in place find this a really effective way to help ensure they provide a good quality service to their users – yet only 1 in 3 charities have such a system in place.
Our report also shows that over 70% of small and medium-sized charities mistakenly think that the Commission resolves charities’ customer complaints. We don’t do this, so charities really need to make sure they have their own mechanisms in place.
Another interesting finding is that charities providing ‘free’ services often think they don’t need a complaints procedure, as they believe users of their services are less likely to complain. Unfortunately, our research found that the opposite is true. There really is no type of charity which doesn’t need these procedures.
For those who view the issue as a threat, rather than an opportunity, there’s good news - 63% of those with a policy felt it was either beneficial or very beneficial. Not a single respondent said it was in any way detrimental.
While there’s no universal blueprint for setting up a system, the report identifies some traits that seem to be particularly effective:
Cause for complaint? – How charities manage complaints about their services (order code RS11) is available from our website under ‘Publications’ or by calling Charity Commission Direct on 0845 3000 218.
SORP 2005 – early adopters set an example
The Statement of Recommended Practice for charity accounts (SORP 2005) was published last March, and we’ve been encouraged that so many charities have adopted it early for their 2005 accounts. As charities start to finalise accounts for the year to 31 March 2006, many more will be adopting the new SORP for the first time.
We’ve redesigned the finance sections on our website pages to create a single ‘lead page’ from which to access all our accountancy related guidance. This page, ‘Help with preparing charity accounts and reports’ can be found on our website under ‘Meeting our requirements’. We aim to add further links to other website information over time.
We’ve also published the final batch of example accounts and reports, giving charities some ideas of possible formats and reporting approaches. However, these examples shouldn’t be treated as a SORP substitute or simply taken as a template without reference to your charity’s specific circumstances. To complement the examples, we’ve added links to the websites of early adopters of the SORP. Early adopters’ accounts will help charities see how others deal with particular disclosure issues. We’ll be adding more of these links, including to an example of good practice receipts and payment accounts.
It’s also crucial that smaller charities aren’t neglected so our website pages contain two model examples, B E Factor and St George’s Youth Club, accounts and report packs for both simple accrual accounts and receipts and payments accounts, and a link to a set of award-winning receipts and payments accounts.
Click on ‘Charity accounts and reports’ on the Home page of our website to access SORP 2005, the accounts packs and the early adopters’ examples.
Getting trustee recruitment right
How do you go about finding new trustees and what skills should you look for? And, importantly, how do you know what checks to make – especially if your charity works with vulnerable beneficiaries?
We are shortly planning to publish a new guide, Finding new trustees: what charities need to know, which will go through the processes involved, from undertaking a skills audit, to advertising vacancies, to being clear about when Criminal Records Bureau checks are needed.
Finding new trustees: what charities need to know (order code CC30) will give practical guidance for each step of the process and should help boards get it right first time when recruiting new trustees. It will be available from our website under ‘Publications’ or by calling Charity Commission Direct on 0845 3000 218.
Last year we introduced a streamlined Annual Return form for smaller charities to help reduce the burden of ‘red tape’ and help trustees get on with their jobs. We asked for essential information only from smaller charities but for more information from the largest charities. We’re keeping this proportionate approach for 2006 and, to aid completion, the content of the Annual Return for 2006 is virtually unchanged from last year.
You have a maximum of 10 months from the end of your financial year to file your returns. Charities can complete their returns quickly and easily online by logging onto our website’s online service. Since the Autumn we have been issuing password letters which give charities access to the service. If by the end of May your charity hasn't received its unique password, follow the links to 'Online Services' on our website to request a password. We'll also continue to mail out paper forms as close to your charity’s financial year end as possible, reminding you of what documents you need to file with us. More details can be found on the 'Annual Returns' pages of our website.
Recent high profile cases have highlighted the need for both charities and the Commission to ensure that trustees of new charities working with vulnerable beneficiaries have Criminal Records Bureau checks.
From 1 June we’re asking organisations seeking registration, who work with children or vulnerable adults, to provide us with evidence that CRB checks have been successfully obtained for trustees who are in registered or regulated positions (defined in our guidance) before we start the registration process. More information on these changes to our registration policy can be found on our website under ‘Registering a charity’.
We want to ensure that our approach to CRB checks for organisations seeking registration is both appropriate and proportionate. In order to help us develop our approach we will be launching a public consultation later this year and we’ll publish full details of results by the end of the year. More information will be made available on our website as the process develops.
We’re pleased that the 2004/05 financial year closed with more charity accounts and returns being filed on time than ever before. Three quarters of the nearly 80,000 charities with an annual income of over £10,000 got their accounts and annual returns to us before the statutory deadline with some of the best performers filing within 4 or 5 months.
Most charities are clearly committed to being transparent to their beneficiaries, supporters and the wider public. However, a substantial minority don’t file accounts and returns within the 10-month deadline and together they account for some £6bn in annual income. This is a cause for concern.
There are indications that some charities may view the 10 month legal deadline more as a target date. The most popular month for filing accounts and returns is month 10, with some charitable companies filing accounts with the Commission long after they’ve sent them to Companies House. Late filing of accounts and returns isn’t confined to less well - funded charities. The proportion of the very biggest charities for which the latest due accounts were, or remain, late is less than that of smaller charities but still a significant 15%.
We’re happy to provide advice to charities which encounter difficulties in getting accounts or returns prepared, but encourage them to approach us well in advance of the 10-month statutory deadline. We’ve published a simple guide on early filing of accounts, File Early, which can be found on our website under ‘Meeting our requirements’, and we are also working to redesign the online register of charities. Among other things, this will help visitors to establish whether a particular charity is filing its accounts and returns promptly.
New helpdesk created to answer sector’s questions
A free helpdesk, launched in April, aims to answer questions asked by charities and voluntary and community organisations in four key areas: governance, information and communications technology (ICT), performance and workforce.
Examples include help with finding an independent arbitrator and advice on where to advertise job vacancies. The service is being funded by ChangeUp through the Active Community Unit of the Home Office, who are funding ‘Hubs’ of excellence in a number of areas. All helpdesk numbers are Freephone and the Hubs’ helpdesk details are:
All lines are open Monday to Friday from 9am to 6pm, but the governance helpdesk has extended opening hours of Monday to Friday 9am to 9pm and 9am to 1pm on Saturday.
Charities Act still waits in the wings
As reported in the last edition of Charity Commission News, we're still waiting for the Charities Bill to be fully debated by Parliament. We are still hoping it will become the new Charities Act by the end of the year.
We continue to do everything we can to support the Bill and, as things happen, we'll provide updates on our website.
We’re looking for your suggestions for ways in which we can reduce regulatory burdens as part of the cross-government Simplification programme. This includes reducing the burden of paperwork and the time taken for dealing with information requests.
More details can be found on the Better Regulation Executive’s website at http://www.betterregulation.gov.uk/simplification/index.asp and the e-mail address for your suggestions to us is simplification@charitycommission.gsi.gov.uk
Make the most of tax effective giving
Many charities are still missing out on estimated millions they could claim if they were to maximise the use of tax effective giving methods.
Using vehicles such as Gift Aid, Payroll Giving, Share Giving, legacies and other tax-effective fundraising techniques, can make a big difference to charities’ fundraising capacity and it’s also best practice.
Many charities, particularly smaller ones, may want to know more about how tax-effective giving could work for them. The Institute of Fundraising is offering free government-funded support to charities, providing help and advice about how these tax breaks work, what processes are involved and how charities could benefit.
This initiative includes development and delivery of a series of training workshops, a mentoring scheme offering 1:1 support, the production of practical resources, a promotional campaign and a guide called ‘Making Giving Go Further’. There’s also a dedicated telephone hotline: 0845 458 4586.
For more information about tax-effective giving, visit www.institute-of-fundraising.org.uk or call 0845 458 4586.
Self-regulation of fundraising arrives
Charity fundraising is under the spotlight and - as well as following legal requirements - best practice is key to public confidence. The government have recommended self-regulation of fundraising as a way of improving standards and creating a positive public perception of this important activity.
The Fundraising Standards Board (FSB) has now been set up as an independent body, with representatives from the charity sector, consumer bodies, and independent lay members representing the public interest.
For an annual fee, participating charities will be able to display a quality mark, to show that they are committed to best practice in fundraising, so that donors can give with confidence. Charities will sign up to principles set out in a Donors’ Charter, and to the Institute of Fundraising codes of practice, and the FSB will provide toolkits and an independent complaints procedure.
The FSB plans to launch to the public this autumn, but are asking charities to sign up before this. They will be accepting applications from 1 June.
For more details contact The Fundraising Standards Board, PO Box 42197, London SW8 1ZS, or call 0845 402 5442, or go to www.fsboard.org.uk
Last year’s Annual General Meeting in September was a good opportunity for us to discuss our future plans with our audience. This year’s AGM will be held on 13 September in London and all members of the public are, as always, welcome to attend. Our website will have full details in August for those wanting to come to the AGM.
Major fire safety reforms to arrive in October
New fire safety rules for all non-domestic buildings in England and Wales will come into force this October. The Regulatory Reform (Fire Safety) Order, announced by the Office of the Deputy Prime Minister (ODPM) last summer, is the biggest overhaul of fire safety legislation in decades and charities with premises need to be aware of its requirements.
The ODPM has been publishing a series of guides since May to help those assessing fire risk. For more information visit www.firesafetyguides.odpm.gov.uk
Forget ‘charity certificates’ – use the web
We’ve been receiving a higher than usual volume of requests from financial specialists for ‘certificates’ proving their charity clients are registered charities in order to continue to claim Stamp Duty Reserve Tax exemption.
Many accountants, brokers and financial advisers believe a certificate is a requirement from HM Revenue and Customs but this isn’t the case. Previously, we’ve responded to these requests with a letter confirming the charity’s status but we no longer do this as we need to target our resources where they’re most needed.
The only proof needed that an organisation is a registered charity is to visit the online register of charities on our website under ‘About registered charities’ and print off a charity’s entry. If your accountant or financial adviser suggests getting a ‘certificate’ from us for Stamp Duty Reserve Tax exemption, please let them know it’s quicker and simpler to visit the online register.
I am amending trustee details via your Online Services, but I’ve made a mistake and can’t correct this. Why?
If you make an amendment to YOUR trustee details and then confirm the changes, the system won’t let you make any further amendments for 24 hours whilst it processes the information you’ve already provided. You should be able to go back into the view/amend function the day after and correct any mistakes.
There is no way I can sign our Annual Return online, do I need to send a postal version also?
No. If you complete your Annual Return online you don’t need to send a postal version as well. The password provided to access online services can be used by more than one person in the charity, but the trustees will be responsible for the security and allocation of the password. Trustees should only give password access to representatives with authority to complete the return, so we don’t require a signature.
I’d like to send in my end of year accounts electronically but your system will only allow me to attach PDF documents. What are they?
If you want to send your charity accounts electronically they will only be accepted as a PDF (Portable Document Format) file, which allows you to send your accounts to us in a form that looks the same as the original document.
You’ll be able to produce PDF files on your own computer if it has PDF writing software, which allows you to prepare PDF files and converts other formats to PDF. It can also create them in conjunction with a scanner. PDF software is available from a variety of sources; sometimes it comes free with your scanner; by purchase from computer suppliers; free from computer magazines and free or by purchase from internet suppliers. If you’re unsure about this type of software you’ll need to get advice on whether different products are compatible with your own computer.
Again, if you want to open and read PDF files on your computer you’ll also need specific software. Adobe Systems Incorporated, who created the PDF file, produce this software (Adobe Acrobat Reader) and make it freely available on the internet. Adobe provide online advice about use of their products at www.adobe.com
If I request a re-issue of our Online Services password, where will it be sent and how long will it take?
If your charity’s entry in the Register contains a correspondent e-mail address then, on request, a new password will be sent to it within 24 hours. If the Register entry doesn’t contain a correspondent e-mail address, the new password will be sent to the correspondent through the post, normally within three working days.
Can my charity have a different password for each user?
The Commission will only issue one password for each charity. This is for security, but it also gives flexibility because it allows different representatives of a charity to view progress on the same form.
Deciding who has access to the password is a matter for the trustees using their judgement.
Here are our contact details:
Charity Commission Direct for general queries and to contact any of our offices:
Charity Commission Direct
PO Box 1227
Liverpool
L69 3UG
Telephone: 0845 3000 218
Minicom: 0845 3000 219
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