Our weekly round up of news and updates from across the sector

Cost of living crisis

Last year, New Philanthropy Capital (NPC) spoke to 58 organisations working to tackle financial hardship about the challenges that they're facing. In this blog NPC's Naomi Chapman explores how they're dealing with a cost of living crisis.

Charities Act 2022

We are still waiting for the third tranche of provisions in the Charities Act 2022 to be brought into force. We have heard from the Department for Culture, Media and Sport (DCMS) that the "early 2024" implementation date is now likely to be delayed until sometime in March 2024. Last week the Charity Commission updated its information about the changes to say that the expected new guidance to accompany the changes to the law will be published on the day the provisions are implemented. As a reminder, we have these summaries of the main changes due to come in:

There is still no date for the changes to ex gratia payments to be brought into force, although DCMS has indicated it will be sometime later this year. The ex gratia changes are summarised here.

Charity Commission

Inquiry report

The Commission has issued its inquiry report into the Kingdom Church GB charity. Initially, it had opened a regulatory compliance case, and subsequently a statutory inquiry, after reports that the charity was selling an oil product as a fake Covid-19 'cure'. Two of the trustees were husband and wife, raising conflicts of interest issues. There were also serious financial concerns, centring on improper use of bank accounts, poor record-keeping and a lack of separation of private business interests.

An interim manager was appointed to conduct a review of the charity's governance. The trustees were unable to provide minutes, records of decision making or management accounts. The inquiry found that one of the trustees, Bishop Climate Wiseman, made all the decisions unilaterally.

Bishop Climate Wiseman was subsequently found guilty of fraud for selling the Covid-curing oil. The Commission disqualified Bishop Wiseman from being a charity trustee or holding a senior position in a charity for 15 years. Five other trustees were disqualified for varying lengths of time. Ultimately, the Commission directed the charity to be wound up and removed it from the Register.

CIOs

On 1 April 2024 the Charitable Incorporated Organisations (Notification Requirements: Social Housing) Regulations 2023 (SI 2023/1311) will come into force. They impose obligations on private registered providers of social housing to notify the Regulator of Social Housing of certain constitutional or other business changes involving a CIO, including a resolution to convert from a charitable company or community interest company into a charitable incorporated organisation.

Governance

Joe Saxton, the new Chair of the Association of Chairs has published the first blog in a 2-part series looking at how being on a trustee board is different from being a member of a staff team. Part 1 looks at issues such as the importance of meetings, the lack of a career path, and how it's all about the cause.

Tax and VAT

Charity Tax Group has released its 2024 Budget Submission. Proposals include short term measures for instance increasing thresholds such as the small scale non-charitable trading exemption, in line with inflationary changes and longer term measures including zero rating all charity advertising on social media.

Election and campaigning

What do charity trustees need to know about campaigning? In this free online event run by New Philanthropy Capital, Bates Wells Suhan Rajkumar will join others in the sector to talk about campaigning and political activity in the run up to a general election.

Safeguarding

See below under Local authorities.

Funders

New Philanthropy Capital has published two useful blogs:

  • In this blog, Alfie Vaughan in collaboration with 360Giving, offers their reflections on being a first-time 360Giving publisher, gives some advice to funders wanting to publish their grant data for the first time, and explains why NPC advocates for publishing open grant data.
  • In this blog, NPC's Claire Gordon provides an update on NPC's work to create an open access framework and toolkit for funders to monitor, evaluate, and learn from their grants.

The not-for-profit organisation, Onward Philanthropy, has released a report, Giving Back Better, about unlocking the potential of philanthropy in the UK. Ideas include:

  • HMRC automating gift aid.
  • The Financial Conduct Authority making philanthropy a mandatory part of training for wealth advisors.
  • A National Philanthropic Strategy, led by a Philanthropy Champion.
  • Launch of 'charitable action zones' in places that experience a deficit of charitable activity.
  • Addressing the geographical imbalance of giving through creation of diaspora philanthropy funds to attract donations from successful 'sons and daughters' of UK towns and cities.

The foreword to the report was written by Culture Secretary Lucy Frazer, who also spoke at its launch event. Her comments included strong support for corporate sponsorship of charities. As many trustees are aware, acceptance and refusal of donations can be a tricky area to navigate. We are awaiting the Charity Commission's promised updated guidance on returning/refusing donations, which we hope will provide clarity and practical support for trustees.

Fundraising

Legacies

In relation to the delays in obtaining probate, a recent survey of STEP members showed that members believe the backlog is largely caused by a lack of experienced staff at the probate service, particularly with complex cases. STEP understands that at present there are only 2.6 full-time equivalent registrars and deputies, when there have previously been 30. The recent centralisation and digitisation of the service, in addition to the pandemic, are also partially responsible.

Advertising

A new report from the University of East Anglia has found that the use of "shock tactic" imagery in charities' newspaper adverts has decreased in the past decade. The report, Charity Representations of Distant Others, found that only 11% of images from a sample of adverts were classed as using "shock tactics" or "pitiful" – e.g. images that emphasised human suffering. This is a drop of 23% since findings from a similar study in 2011 to 2014. See this article from the University for more information.

Data protection

The Information Commissioner's Office (ICO) has reprimanded South Tees Hospital NHS Foundation Trust for a data breach which disclosed sensitive information to an unauthorised family member. The disclosure was a result of human error, but the ICO found no evidence that the Trust fully and appropriately prepared staff for their role in dealing with correspondence that was particularly sensitive. The Trust should now implement new procedures and provide further staff training.

AI

For any organisations looking to put in place guidance for staff on using AI, the Cabinet Office and Central Digital and Data Office have jointly published the Generative AI Framework for HM Government, which provides guidance for civil servants and others working in government organisations on using generative AI safely and securely. The guidance includes particularly detailed sections concerning data protection legislation and the ethics of using generative AI in government. It also outlines considerations around equalities legislation, public law principles, intellectual property and copyright and contractual issues (including purchasing of products that have a generative AI element).

The guidance is also interesting from the perspective of openness and transparency with the public about certain aspects, such as where and how algorithms and AI systems are being used in official duties.

Company law

CIC Regulator webinar

For those interested in applying to become a community interest company, the CIC Regulator is hosting a webinar on 8 February about 'how to prepare for your CIC journey'.

Local authorities

The Department for Levelling Up, Housing and Communities has:

  • Made an announcement that it will allocate an additional £600 million of funding to local authorities. See the announcement for details of how the money must be spent.
  • Sent a letter to leaders of unitary and upper tier authorities reminding them of a recommendation set out in Simon Bailey's Independent Review of the Disclosure and Barring Regime that enhanced criminal record checks should be mandatory for all councillors appointed to committees dealing with the provision of children's services or services for vulnerable adults.

Health and social care

See above under Local authorities.

Social enterprise

A new Social Enterprise UK report, Ending the monoculture: How diversity of business can bring prosperity, produced with the support of the Alex Ferry Foundation, argues that the UK has a "business monoculture" where firms primarily exist to maximise profits. The report finds that the UK's social economy is lagging behind its European counterparts – it delivers 3% of GDP compared with 14% in the Netherlands, 12% in Germany and 10% in France. The research also cites two recent examples of growth in the social economy leading to increased GPD per capita and reduced inequality – the Basque Country in Spain and the Emilia-Romagna region of Italy.

Co-operatives UK is calling on the government, ahead of the Spring Budget announcement, to give worker co-op buyouts the same tax breaks as employee ownership trust buyouts. According to Co-operatives UK, this could save thousands of jobs and millions of pounds.

Social investment/social impact investment

Five key developments that will shape the social economy this year. Pioneers Post asked experts from across the social economy and impact sector for their predictions and hopes for 2024; their responses included:

  • Describing the UN Resolution on the Social and Solidarity Economy as providing "a clear mandate" for the UN to support its member states with developing policies and strategies for the social economy.
  • Noting the key role of the social economy in addressing community needs in areas of conflict and crisis.
  • That the social and solidarity economy is on the frontline in the African Union strategy for the region.
  • That the impact movement within venture capital continues to gather momentum.
  • The continuing need to increase capital available to diverse founders, to help increase diversity in the sector.

New research argues that investors and shareholders are the most likely stakeholders to push businesses to focus on impact. The report, The Emerging Chief Impact Officer: A New Sustainability Sherpa, by Aspire Impact, an impact rating and certification initiative for the Global South, and sponsored by Capgemini, examines the growing significance of the 'Chief Impact Officer' role. The report finds that investors and shareholders are most likely to influence businesses to create this 'CIO' role, committed to monitoring social and environmental impact. See this Pioneers Post article for more information.

Big Society Capital announced a £10m investment into the Octopus Affordable Housing Fund. The fund is managed by Octopus Investments, a B Corp investment manager investing in socially impactful ideas and industries and part of the Octopus Group. The fund was set up to accelerate the delivery of quality, affordable homes built with robust sustainability standards, and has made its first acquisition of 26 homes.

Sport

New Philanthropy Capital (NPC) has announced it is working on a major project for Sport England, in association with Ipsos and Sheffield Hallam's Advanced Wellbeing Research Centre. NPC will be supporting an initiative to improve participation in sports and physical activity, particularly for children and young people, whilst tackling stubborn inequality. Bates Wells Ben Thomas comments, "The project demonstrates Sport England's dedication to evidence-based resource allocation and embraces the power of sport to improve lives. As grant allocation becomes increasingly evidence-based, it is likely that grant funding will become more intensely focused on the achievement of KPIs."

International development

Bond has commented on the 2022 aid data, published by the Organisation for Economic Co-operation and Development's (OECD) Development Assistance Committee (DAC). Bond's blog found that whilst support for Ukraine brought Official Development Assistance (ODA) to a new high, this masked important trends such as ODA disbursements to the world's least developed and low-income countries (LDCs) dropping by 3% in 2022 compared to 2021. There is also a general trend of aid shifting towards loans, rather than grants despite increasing concerns about the level of debt held by LDCs.

Education

General

The Department for Education has published Generative AI in education, a report on the insights from educators, experts, data sources and literature on the use of Artificial Intelligence in the sector. The report covers how the sector has responded to AI, opportunities, impact and benefits of AI, barriers and risks, and support the sector needs from the government.

Education Secretary Gillian Keegan spoke at the Bett show, an EdTech Expo, about the potential of Artificial Intelligence within the education sector. She set out the importance of innovation in the sector's approach to AI and argued that robust regulation, an evidence-based approach and international collaboration are all key to take advantage of emerging AI tech. See here for the Department for Education's press release.

Ofsted have published guidance handbooks on inspections under the education inspection framework for:

Schools

In A Multi Academy Trust v RR [2024] UKUT 9 (AAC) (29 December 2023) the Upper Tribunal (UT) considers the application of the 'reasonable adjustments test' in s.20(3) of the Equality Act 2010, particularly in relation to special schools. The First-tier Tribunal's (FTT) original decision was that the failure to provide individual transition plans placed 'disabled pupils generally' at a substantial disadvantage compared with 'non-disabled pupils' and amounted to a breach of section 20(3). The UT set aside the FTT's decision and sent the case back to it for further consideration of whether there had been a breach of the Equality Act. The grounds for this decision included that comparisons did not have to be made with non-disabled pupils at the same school, rather between the effects on 'disabled pupils generally' and on 'persons who are not disabled'. Further, the FTT had erred in law by referring to 'disabled pupils generally', as it was not clear if this referred to all disabled pupils or a particular subset of them. The decision clarifies the comparator pool that should be used: highlighting the difficulties in defining a comparator pool in a special school, given the many different causes of disability and the possibility that a hypothetical comparator must be used.

Further Education

Following a Freedom of Information request, FE Week reports that the Department for Education's interdepartmental prison apprenticeship scheme, which aimed to offer opportunities to 300 prisoners in England, had fewer than ten enlist.

Funding

This government has launched a campaign to drive applications for Horizon Europe, which is the world's largest programme of research collaboration. Support is already being provided to encourage UK bids for the funding such as 'pump priming' grants delivered in partnership with the British Academy offering up to £10,000 for selected UK researchers and businesses to help them create better applications.

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