As the UK Government introduces new measures in an attempt to tackle the coronavirus (Covid-19) pandemic, with almost 500,000 confirmed cases worldwide at the time of writing, the Charity Commission has released guidance to assist the charity sector during these unprecedented times.
In addition to reassuring the sector that their approach to regulation during this uncertain period will be as flexible and pragmatic as possible, the Commission addresses their most commonly asked questions, including:
The Commission advises trustees to review their short, medium and longer term priorities, and consider whether they need to amend their financial planning given the current situation. Trustees are encouraged in particular to think about whether certain projects can be delayed in order to focus on essential spending.
Whilst advising that reserves can be spent to help cope with unexpected events like those unfolding at present, trustees are advised by the Commission to identify which of their funds or assets have limits on their use. If funds held by a charity are ‘restricted funds’, then they may only be used for a particular and defined purpose.
If there are restrictions, in some instances, there may be ways to amend them, but the Commission advises that accessing or releasing restricted funds should only be considered following careful consideration of the wider and longer term impacts, and only when other options, such as reserves, are not possible. Trustees are encouraged to seek professional advice on this.
The Commission also reminds charities that all decisions on such financial matters should normally be taken collectively, with significant decisions and action points noted in writing. The Commission has more detailed guidance on financial resilience; on charity reserves; and a general tool to help trustees work out what to focus on, on their website.
The Commission notes that some charities have clauses in their governing documents that allow them to meet virtually or to use telephone facilities and so advises trustees to check their governing document and if there is no provision to see if they can make amendments themselves to facilitate changes as to how meetings are held. Where there is no such clause and trustees decide to hold meetings over the phone or using digital solutions, the Commission has advised they will be understanding of such a decision. However, trustees should record any such decision to hold a telephone or digital meeting and the fact that it has been made to demonstrate good governance.
The Commission reaffirms that both a Charities’ and the Commission’s primary interest must be looking after the public and the communities that they serve. It therefore remains the responsibility of charity trustees to continue to report serious incidents to the Commission using current guidelines.
You can read the Commission’s full guidance here: Coronavirus (COVID-19) guidance for the charity sector.
If you require advice on the use of charity funds, charity governance or any other matter relating to charity law and regulation please get in touch with our specialist Charities and Social Enterprise team, using the enquiry form or telephone number provided on this page. As a full service law firm we provide charities with the full spectrum of legal advice, including advice on employment law, safeguarding, property and debt recovery.
Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.