1. Yorkshire Grant Makers’ Forum 19 May 2016 Being an Effective Trustee Sylvie Nunn Natalie Johnson

2. Overview Regulation and Risk Trustees’ duties: a reminder Grants to non-charities Lessons from Kids Company Legislation

3. Risk 1.Charity Commission 2.Reputational – “Daily Mail Test” 3.Compliance 4.Tax

4. Charity Commission Resources Focus/priorities Guidance Why some charities have been investigated by the Charity Commission No surprises

5. HMRC 1. New Gift Aid declaration (April 2016) 2. Gift Aid review: rates 3. Gift Aid Small Donations Scheme – increased to £8,000 (April 2016) 4. Business rates? 5. Scams

6. “Kids Company faces investigation over financial collapse” “More than £500,000 donated to research after Cecil death” “Angry Jolie quit Diana charity in pay row” “Shelterbox founder Tom Henderson ‘gave son contracts’” “Shame of charities that prey on the kind-hearted and drove Olive to her death: Organisations who exploited pensioner’s kind heart admit to sending begging letters” “Public trust in charities is at its lowest for eight years” “The £100,000-a-year bosses driving cold-call menace as charities are told to stop the bullying: Big four are savaged over phone tactics”

7. Trustees’ duties: a reminder To act within powers To further the objects To maximise charity’s assets To exercise independent judgement To exercise reasonable care, skill and diligence

8. Trustees’ duties: a reminder To avoid / manage conflicts of interest To declare interests in transactions / arrangements Not to profit / accept benefits from third parties To act personally

9. Trustees’ duties: a reminder To supply information to CC Accounts, returns and reports Dealings in charity land Charity Documentation

10. Trustees’ duties: a reminder Disqualifications from acting as a charity trustee Fundraising Investments – Charity Commission guidance (CC14)

11. What to delegate? Advisory role v delegated powers ‘Trustee’ roles Other roles Employees? Check governing documents Investments

12. Delegation Important: Managing risk Know what you can delegate Clarity of delegation Reporting Risk – who is liable? Duty of care Reasonableness of delegation

13. Grants to non-charities New Charity Commission guidance (draft) Key: – Due diligence – Private benefit – Terms of grant – Security?

14. Due diligence Common Issues – Trading subsidiary is the applicant – Asset locks Companies House v Charity Commission – Do the records match? registration/filing history officer info – Change of objects without consent – void – Does it matter?

15. Public benefit (a reminder) Is there a public benefit? Does any detriment or harm outweigh it? Does the activity benefit a sufficient section of the public?

16. Private benefit 1. Recipient organisation – Charity (registered/unregistered) – low risk – ‘Not for profit’? – medium risk Statutory asset locks help – CIC – Community Benefit Societies No asset lock/not statutory = easier to change – For profit – high risk

17. Private benefit (2) Does the activity give rise to more than an incidental personal benefit? Check: – Type of recipient organisation – Other relationships (suppliers/key contractors etc)

18. Private benefit (3) 2. Are individuals or other organisations benefiting? – Eg farm shop buying stock/lease from farm – Check in particular for ‘connected persons’ benefiting

19. Lessons from Kids Company

20. Fundraising: Etherington Review Three lines of defence: trustees; new fundraising regulator; statutory regulators Fundraising Preference Service Government has accepted recommendations

21. Charities (Protection & Social Investment) Act 2016 Beefs up Charity Commission powers Changes to fundraising regulation Power to make social investments

22. Small Business, Enterprise and Employment Act 2015 – companies Register of Persons having Significant Control (April 2016): – 25% voting rights – Right to appoint/remove directors – Significant influence Report details of PSC to CH (June 2016) N.B. Secretary of State can exclude – may exclude some charities No corporate directors (October 2016?)

23. Changes to Companies House forms Annual return – check and confirm statement (June 2016) Appointments/retirements of directors – who certifies? N.B. minutes/declarations of consent Day element of D.O.B. no longer shown on form No obligation to notify CH of change of auditor

24. How to protect yourselves Due process – be diligent! Training Good governance and delegation Risk Management Insurance

25. Recruiting new trustees Where to find them? Can they be paid? Terms of office Understanding the role Induction and training

26. Any questions

27. Sylvie Nunn Natalie Johnson (Partner)(Solicitor) 0113 204 57260113 204 5744 sylvie.nunn@wrigleys.co.uksylvie.nunn@wrigleys.co.uk natalie.johnson@wrigleys.co.uknatalie.johnson@wrigleys.co.uk