UK: Charities – A Briefing for Charitable Organisations (Winter 2010/11)

Last Updated: 14 February 2011
Article by Adrian Wild

EDITOR'S COMMENT - WHERE TO FROM HERE?

2010 was a challenging year for the not-for-profit sector and 2011 looks to be no less difficult. While the recession is officially over, the after-effects will continue for several years.

Funding continues to be challenging for most organisations. For example, The Arts Council for England has had its budget cut by 29.6% and has passed this on to its recipients by announcing an 'across the board' cut of 6.9% for 2011/12, and a new funding structure for subsequent years.

The Arts is by no means the only sector affected. The new Government's emergency Budget will cap housing benefit, and unemployment rose in the three months to October 2010. Both of these factors are likely to increase pressure on charitable organisations. At the same time it appears that there will be less support from the Charity Commission: the Commission's budget will reduce from £29m to £21m over the next four years. The VAT rate increase from 17.5% to 20% from 4 January 2011 will also affect a significant number of charities.

This edition of the Charities newsletter has a strong theme of compliance. Julie Mutton has commented on the Charity Commission's compliance review for 2009- 10 which highlighted some common pitfalls, especially in the area of governance. Regulation continues to increase, although there is some good news, for example the iXBRL exemption for small charities.

The Bribery Act has arguably not had as much coverage as it is due in the sector and there is some concern that it has a wider remit than at first sight. If you are a trustee you should read the article on the new Act. Finally, the Equality Act is now in force and, as with any new legislation, you need to take care to avoid the pitfalls.

CHARITY COMMISSION - WHAT IS THE FUTURE?

The Charity Commission faces a drastic budget cut over the next four years. What does this mean for the future of charity regulation in the UK?

The Spending Review gave the Charity Commission (the Commission) an unwelcome and early Christmas 'present' in the form of fairly savage cuts to its budget.

Government funding is set to fall from the current £30m (2010/11) to £21.7m (2014/15). This follows from smaller reductions in the Commission's budget in the preceding years: for 2006 to 2008, the budget was frozen, which equates to a cut of some 2.5% per annum in real terms, and for 2009 to 2011, the reduction in real terms was some 5% per annum.

Combined, this equates to a cumulative budget cut of nearly 50%, which will force the Commission to take some radical, if not drastic, action.

Staff and related costs amount to some 65% of the Charity Commission's total expenditure, while property, accommodation and office costs were a further 23% of expenditure. Clearly, any significant reduction in expenditure can only be achieved via a reduction in staff, which in turn would lead to a reduced need for office accommodation. The Commission estimates that it needs to reduce the full time equivalent (FTE) head count by 140 staff, compared to current staffing of some 420 FTEs.

Duties of the Commission

The Commission has a multitude of roles, which are specified by statute.

  • It acts as a registrar – admitting and removing charities to/from the register, maintaining the public file and facilitating public access to that file.
  • It provides guidance for charities, both generic (available from the website) and also specific for individual charities and trustees who contact it.
  • It gives legal consents to charities, taking on a function which might otherwise be undertaken by the Courts.
  • It investigates potential and actual misconduct.

The Commission does not charge for any of these activities, relying solely on public funding.

The enactment of the Charities Act 2006 increased the work of the Commission, a process which is still ongoing. For example, it needs to establish systems to facilitate the registration of charitable incorporated organisations.

The Public Consultation

The Charity Commission has responded to the budget cuts by undertaking a public consultation. The consultation will help assess which of its activities are of most value to the respondees, what the risks facing the sector are perceived to be and where the Commission should be focusing its resources.

It has been suggested that one method for the Commission to save money would be to reduce the range of its activities, rather than simply trying to do the same work within a smaller budget. This might be achieved by:

  • reducing its statutory role
  • reducing the guidance given to charities – particularly one-to-one guidance.

Any reduction in the statutory role would need legislation. However, the Charities Act 2006 is due to be reviewed in 2011 and a consolidating Act has been promised. This may provide opportunity to reduce the role of the Commission and, perhaps, eliminate some bureaucracy.

Another option would be for the Commission to charge charities. For example, Companies House charges all registered companies and also those accessing data. If the Commission levied similar charges on charities, income of some £3.5m could be expected to be generated from charities themselves, with a further £1m potentially available from the provision of data. Charges could also be levied for the provision of guidance, although this might act as a disincentive for charities and trustees to request guidance.

This is not an easy time for the Commission and in the coming months the board will need to make some hard decisions. To the extent that outdated bureaucracy is eliminated, change will be welcome. However, the role of the Commission has been developed over 400 years and there is a risk that an emasculated commission could lead to a loss of public confidence in the sector.

ALL CHANGE (BUT NOT JUST YET)

There are changes ahead for charity financial reporting.

In the UK, the Accounting Standards Board (ASB) has had a long-term goal of converging United Kingdom Generally Accepted Accounting Practice (UK GAAP) with international accounting standards. However, until now the complexity and quality of the international standards has prevented progress. This has changed with the publication of IFRS for SMEs, which is a self contained standard aimed at small and medium-sized entities.

The ASB proposes to radically change UK GAAP – existing standards will be replaced by a UK version of IFRS for SMEs (the FRS for medium-sized entities or FRSME for short). The only exception is the Financial Reporting Standard for Small Entities (FRSSE) which will continue to be extant. In the UK, possible financial reporting standards will be:

  • full IFRS – mandatory for publicly accountable entities
  • the FRSME
  • the FRSSE – available for small entities.

Additionally, disclosure exemptions are expected to be available for subsidiaries.

Charity accounting

When the ASB consulted on the changes to UK GAAP, one proposal was that the various SORPs which apply to the not-for-profit sector should be replaced by one all-encompassing standard for public benefit entities (the public benefit standard or PBS). However, the responses to the consultation, while welcoming the proposed public benefit standard, were overwhelmingly in favour of retaining the charity SORP. The ASB listened, so the charity SORP is being retained.

The exposure draft of the PBS is expected to be issued in the first quarter of 2011. It is expected to cover areas which are not explicitly covered by the proposed new standards and to provide high level, rather than detailed, guidance. The good news is that it is also expected to be largely consistent with the existing charity SORP.

The SORP is currently being revised and it is the intention that the revised SORP will cover accounts prepared under the FRSSE and the FRSME. It may also provide some guidance for charities which choose to adopt full IFRS (note that this will require a change in the law for charitable companies). It is also hoped that the SORP will be available in a more modular format and accessible through a website, making it more user friendly.

What does this mean for charities?

Smaller charities which adopt the FRSSE should, for now, see limited changes.

Larger charities will need to comply with the new standards which are expected to apply for accounting periods starting on or after 1 July 2013. Therefore there is no immediate action required – indeed any action would be premature until such time as the PBS and the FRSME are published in their final forms.

However, charity finance directors should maintain a watching brief and plan ahead, as such significant changes may require additional accounting resources.

IXBRL: A COMPLIANCE ISSUE

From 1 April 2011, some charities will need to file their tax computations and accounts using iXBRL.

iXBRL stands for Inline eXtensible Business Reporting Language and is a computer language enabling the transfer of data from one computer to another. HMRC requires that all companies file their tax computations and accounts in this format, from 1 April 2011 for accounting periods ending after 31 March 2010.

This means that accounts and tax computations will need to be translated into the iXBRL format, a process referred to as tagging. Tagging of accounts can be done in a number of ways, but we expect that the most common will be:

  • converting accounts prepared in Word or Excel to the new format
  • preparing the accounts using accounts production software, which can also generate accounts in iXBRL format.

Small companies with straightforward accounts might also choose to use HMRC's free accounts template software.

The cost of tagging accounts will be dependent on the complexity of the accounts, the urgency of the conversion and the format of the accounts that need to be converted. Based on our market research, recurring annual costs for a relatively small charity are likely to be in the region of £500 for each set of accounts; additionally, some set-up costs might be incurred.

Most charities do not have to file tax returns every year and therefore will not need to have their accounts tagged every year. So changing your accounts production process to comply with this requirement might be an unnecessary expense. On the other hand, we understand that most conversion processes from, say, Microsoft Word 'learn' from one year to the next, so a lack of continuity in tagging may mean that it costs more per set of accounts.

Some good news for smaller charities

HMRC has recently announced an exemption for small charities, saying it recognises that the accounts template its free software provides is not suitable for them and that 'for a transitional period' small charities would be able to submit their accounts via PDF. For the purposes of this exemption 'small' means that group incoming resources must be less than £6.5m.

Not for trusts, yet

iXBRL reporting only applies to charitable companies. Trusts are liable to income tax and therefore file income tax returns, which are not (yet) required to be filed in iXBRL format.

THE BRIBERY ACT 2010 - A RISK MANAGEMENT ISSUE

The possibility of unlimited fines for both corporate entities and trustees means that the Bribery Act 2010 needs to be taken very seriously.

With the new Bribery Act 2010 (the Act) coming into force on 1 April 2011, immediate action is required to mitigate the risks arising. While press comment has focused mainly on charities operating overseas, the Act potentially applies to all charities, including those which operate solely at a local level.

Background

As well as codifying existing common law and consolidating existing statute, the Act introduces certain new offences, including the failure by a commercial organisation to prevent bribery. The penalties for a breach of this provision are unlimited fines.

Are charities covered by this section of the Act? This has been subject to some comment in the press and a Ministry of Justice spokesman has apparently said that the Act does not apply to charities.

However, this does not appear to be correct. The law applies to commercial organisations, which includes UK corporate bodies that carry on a business. Many charities provide services for payment, for example, from public funds or from members of the public, which would appear to be a business activity. However, the question as to whether the activities of any particular charity constitute a business activity is a question that can only be determined by the Courts.

In any event, many charities have trading subsidiaries, which undoubtedly conduct business activities. As explained below, the existence of such subsidiaries is sufficient to bring a charity into the ambit of the Bribery Act.

What is the offence?

A commercial organisation commits the offence of failing to prevent bribery when an associated person 'bribes' another so as to obtain or retain a commercial advantage for the organisation.

This is incredibly widely drawn. An offence can be committed even if no money changes hands – providing that there was intent. It is enough that an offer or promise was made. Also, the person doing the bribing need not have been convicted under the Act.

The most significant issue for corporate entities is the definition of an associated person. This is a person who performs services for or on behalf of the commercial organisation – this represents a large number of organisations and individuals.

Associates include those where the charity can direct or influence the activities – for example, employees, trustees, subsidiaries, contractors and suppliers. However it will also include those who operate at a more arms-length basis, such as fundraisers, agents and even the auditors.

Therefore, even though you and your staff have the utmost integrity, you could be tainted by (and convicted from) the actions of someone over whom you have only a limited influence.

Your defence?

Clearly, this is an onerous obligation on charities (and all other commercial entities), made worse as it is a strict liability offence. That is, no element of negligence needs to be proved for the charity and its trustees to be found guilty. The only defence available is that the commercial organisation had in place 'adequate procedures' to prevent those associated with it from committing offences under the Act.

The Government is to issue guidance as to what the adequate procedures might be. Given the potential onerous nature of the obligations and the significant penalties, it is rather disappointing that the guidance is only expected to be issued in January 2011. However, the Government has consulted on its draft guidance and we've used this to highlight the possible actions.

Six principles

The draft guidance highlights six principles which give general guidance and are based on good practice, both from the UK and internationally. The procedures adopted to implement the principles are a matter for each entity and, ultimately, it is for the Courts to assess whether the procedures are adequate.

  1. Risk assessment

    An assessment of the risk exposure should be undertaken, which will inform subsequent actions.

    Internal risks primarily arise from employees, whereas external risks will depend on the nature of transactions undertaken and the extent to which 'associates' are used.
  2. Top level commitment

    The trustees should commit to a culture of integrity and be seen to make that commitment.
  3. Due diligence

    Appropriate enquiries should be made regarding the specific risks associated with particular activities and the charity's associates.
  4. Policies and procedures

    Policies and procedures should be established which seek to prevent employees and associates from committing bribery on the charity's behalf. Such policies and procedures should be clear, concise and accessible.
  5. Effective implementation

    Once appropriate policies and procedures have been established they must be implemented, both internally and externally. The aim is for the policies and procedures to become embedded throughout the charity.
  6. Monitoring and review

    Systems for monitoring and reviewing, and if necessary, improving, should be established.

Bribing a foreign public official

There has been much press comment about the impact of the Act on charities that operate overseas.

The Act has also introduced a new offence of bribing a foreign public official. For charities operating in the third world, this could cause significant issues, particularly where bribes are, or are assumed to be, culturally embedded.

However, like the offence of failing to prevent bribery, this offence is only committed where there is the intention to obtain or retain business or an advantage in the conduct of business. Whether a charity providing relief from poverty, emergency aid or the provision of education – to pick just three examples – meets the definition of business will be a matter for the Courts to decide. Common sense would indicate that charities providing famine relief are not undertaking a business activity and therefore cannot be obtaining any business advantage. Additionally, if every entity doing business must, for example, pay a bribe to enable goods to clear customs, the payment of the bribe, while distasteful, would not appear to confer any advantage, as every organisation is treated equally.

Therefore, although there is concern over this aspect of the Act – and worryingly little guidance from the Government – it does appear that in most instances charities will not be affected.

Impact on charities

Working on the assumption that charities operating in the UK do not pay bribes and that their employees conduct themselves in a professional and lawful manner, it is likely that relatively few changes will be needed as a result of the Act. The main issues for most organisations, including charities, will be the need to:

  • control and monitor associates and
  • document how policies and procedures help to ensure compliance with the Act.

Areas which may need to be addressed include the following.

General

  • Ensure your code of conduct refers to the Bribery Act and that it is readily accessible. If you do not have a code of conduct, consider creating one.
  • Perform a risk assessment to ensure you have considered how best to control any areas where there is the potential for bribery.

Suppliers/contractors/agents

  • For major suppliers, include a process for assessing whether they have adequate procedures, as defined by the Act, in place.
  • Revise contractual arrangements to include:
    • an explicit confirmation of compliance with the Act, with breaches permitting immediate contract termination, the right to withhold payment and the ability to recover any consequential fines and/or costs
    • a continuing commitment to maintain adequate procedures and to report to you any incidents or suspicions of bribery
    • prohibition on assignment or subcontract without permission.

Employees

  • Contracts of employment and staff handbooks may need to be updated to reflect the new Act. In particular, an explicit statement that breaches of the Bribery Act may amount to gross misconduct would be appropriate.
  • Ensuring that there are clear guidelines as to what entertaining, if any, can be provided to third parties.

Consultants/interim workers/agency workers

  • Contracts should be reviewed/ amended as above.
  • Individuals should be made aware of the code of conduct and should sign to confirm their awareness and compliance.

Volunteers

  • Each volunteer should have a contract with the charity and these should be updated to reflect the new Act.
  • Individuals should be made aware of the code of conduct and should sign to confirm their awareness and compliance.

Monitoring and review

  • Ensure that acts of bribery and compliance with the Act are specifically within the risk management process.
  • Whistleblowing procedures should be reviewed to ensure that they specifically cover acts of bribery.
  • (Possibly) extend the work of any internal auditors to cover potential acts of bribery.
  • (Possibly) survey staff, suppliers, agents etc. to obtain their views and comments, which could inform future reviews of risks.

Education and dissemination

  • Ensure that the board of trustees is made aware of the Act.
  • Once the Act comes into force, the board should make a short statement highlighting the new legislation and making it clear that acts of bribery are prohibited.
  • Any new policies and procedures put in place as a result of the Act should be disseminated throughout the charity and beyond to associates.

The Bribery Act 2010 is one of the world's strictest pieces of anti-bribery legislation. When enacted, it will significantly increase the penalties for any acts of bribery. To mitigate that risk, charities need to take appropriate action now.

FRS 30 - ONEROUS DISCLOSURE REQUIREMENTS

The changes brought about by FRS 30 are not significant, although the disclosure requirements are more onerous than currently required.

Financial Reporting Standard 30 (FRS 30), Heritage Assets, was published in June 2009 after several years of consultation and two exposure drafts. FRS 30 applies for periods beginning on or after 1 April 2010, although early adoption is encouraged.

The purpose of FRS 30 is to improve disclosure in relation to heritage assets and ensure that heritage assets are shown on the balance sheet where information on cost or valuation is available. The changes in accounting for the charities sector are not significant, as the concept of heritage assets was introduced in SORP 2005, although the disclosure requirements are more onerous than currently required under the Charities SORP.

Definition

The definition given by the standard is similar to the SORP definition. "A tangible asset with historical, artistic, scientific, technological, geophysical or environmental qualities that is held and maintained principally for its contribution to knowledge and culture."

The second part of the definition is perhaps the most important. Just because something is old does not mean it is a heritage asset. For example, a school that operates out of an historic building is not using and maintaining the building as a heritage asset and should account for the school building as a normal asset (FRS 15) rather than a heritage asset (FRS 30).

Works of art owned by a museum or gallery and maintained for their contribution to culture would fall within the scope of this standard. But similar pieces of art could be held by a charity that stores the collection out of sight and considers the assets to be investments; they would then not be heritage assets.

Presentation

FRS 30 requires that heritage assets are reported on the balance sheet separately from other tangible assets. Donated heritage assets should be included at their value as at the date of donation, if it is possible and practical to obtain such a valuation. Depreciation should be provided if the asset has a finite life, although it is accepted that many heritage assets have indefinite lives or very high residual values, making depreciation immaterial.

Heritage assets may also be re-valued and stated at their valuation rather than their original cost. If the assets are held at valuation, the valuations must be kept up to date and the cost of such valuations may make this option unattractive.

Disclosure

It is the disclosure requirements of this standard that are more onerous than the requirements of the SORP.

Detailed disclosures are required whether or not the assets are shown on the balance sheet. The notes to the accounts must include the charity's policy for acquisition, disposal, measurement, preservation and management of its heritage assets, including a description of records kept and the extent to which public access is permitted.

For assets held at valuation, the accounts must disclose the date and method of the valuation, whether the valuer is internal or external, the name and qualification of an external valuer, and any significant limitations of the valuation, for example where the effect of an asset's provenance is not fully reflected in the valuation figure.

The notes should also include a five-year summary of transactions disclosing for each period the cost of acquisitions, the value of donated heritage assets, the carrying value and proceeds of disposals and any impairments recognised in the year. This five-year summary could potentially involve a significant amount of work to create in the first year of application although the standard does allow for it to be built up over a period of four years. That is, to provide only current year and prior year data in the first year if it is not practicable to obtain the historic information.

For all disclosures the standard requires that assets on the balance sheet are reported separately from those not on the balance sheet.

In theory this should not affect charities greatly. However, our review of various charity accounts shows that narrative disclosures are relatively sparse and we expect to see more reporting.

THE EQUALITY ACT 2010 - IMPLICATIONS FOR CHARITIES

By Rebecca Strevens and Andy Williams

Rebecca Strevens and Andy Williams of Charles Russell LLP discuss the recently implemented Equality Act 2010.

Branded the "death of the office joke" by the Daily Mail, the Equality Act 2010 (the Act) was implemented on 1 October 2010 to consolidate into one Act previous discrimination legislation and additional principles regarding discriminatory behaviour that have developed through case law. The Act addresses discrimination on the grounds of the following nine protected characteristics:

  • age
  • disability
  • gender reassignment
  • marriage and civil partnership
  • pregnancy and maternity
  • race
  • religion or belief
  • sex
  • sexual orientation.

The Act renders it unlawful to discriminate against an individual on the basis of a protected characteristic in relation to several areas, including employment and the provision of goods and services. As many charities focus their operations on a specific group of people, for example the elderly or disabled, and there is no limit on the amount of compensation that can be awarded in discrimination claims brought in the Employment Tribunal, it is essential that charities comply with the Act.

Charities can benefit from an exemption which permits them to limit those who benefit from their operation on the grounds of a protected characteristic. However, an individual's human rights are important and therefore any discriminatory infringement must be both justified and proportionate.

Pre-employment health questions

Pre-employment health enquiries are thought to be one of the main reasons that many disabled job applicants often fail to reach the interview stage. It is now unlawful to ask job applicants about their health before they have been offered a position, unless one of the exceptions in the Act applies. These exceptions include circumstances where the questions are necessary to establish whether the applicant is able to "carry out a function that is intrinsic to the work concerned". Employers should consider carefully whether any such questions are necessary (for example, where a job involves the manual lifting and handling of heavy items), and should certainly refrain from enquiring about a job applicant's sickness absence record.

Association and perception

Prior to the Act, legislation was inconsistent in prohibiting discrimination because an individual is associated with someone with a protected characteristic or because of a perceived protected characteristic. Associative and perceptive discrimination now apply to all protected characteristics except marriage and civil partnership.

Associative discrimination would occur, for example, where an individual is treated less favourably because a spouse, or brother, is Catholic. An example of perceptive discrimination would be subjecting individuals to 'homophobic banter' on the basis that they appear to be homosexual when, in fact, they are heterosexual.

Charities exemption

Under the Act, charities are still able to limit the group of people who benefit from their operations to individuals with a protected characteristic, provided that to do so would either:

  • help tackle disadvantages that particularly affect a group with a protected characteristic; or
  • be objectively justified as a proportionate means of achieving a legitimate aim. A recent Court decision has established that this means the charity's aim must be justified by "particularly convincing and weighty reasons".

The Charity Commission recently rejected an application made by Catholic Care (Diocese of Leeds) to amend its objects to limit the provision of its adoption service to prospective parents who are heterosexual. Catholic Care argued that the proposed change was necessary because its adoption service received donations from the Catholic Church, without which the service would have to close. The Commission determined that respect for the religious beliefs motivating the charity's application and the public nature of its work did not justify differential treatment in favour of heterosexual parents, even if the adoption service had to close as a result. This decision suggests that justifying a charity's discriminatory objects as a proportionate means of achieving a legitimate aim will not be easy.

Charities must take great care to ensure they do not act unlawfully in discriminating against individuals with a protected characteristic. Where there is any doubt, they should seek timely advice in order to avoid costly consequences and adverse publicity.

COMPLIANCE PITFALLS TO AVOID

By Julie Mutton

Julie Mutton discusses key themes from the Commission's assessment of compliance cases.

The Charity Commission has published the results of its compliance work during 2009/10 in Charities Back on Track. As well as explaining the different levels of intervention applied by the Commission and the numbers of such cases dealt with in the year, the report also highlights the themes identified as those that typically give rise to difficulties. Case studies are explained along with analysis of issues for other charities to consider.

The Commission's compliance division carries out its statutory function to identify and investigate apparent misconduct or mismanagement in the administration of charities. Investigations also cover situations where assets, beneficiaries or reputations are at serious risk.

Following an initial assessment, some cases will need further intervention. These may range from monitoring and supervision of charities, where there is concern that there might be serious non-compliance, to 'Statutory Inquiries' under Section 8 of the Charities Act 1993. Such investigations will be opened where there is, for example, evidence or serious suspicion of misconduct or mismanagement in the administration of the charity.

Key themes

The assessments undertaken during 2009/10 highlighted key themes; these are discussed here.

Poor governance

The legal duty of a trustee is to run the charity solely in the interests of the charity. Some two-thirds of the Commission's assessments involved failings in trusteeship and governance involving typically:

  • inadequate management controls
  • failure to manage conflicts of interest
  • situations where trustees are benefitting inappropriately from their respective charities
  • dominant individuals at board level.

Financial mismanagement

Some £21m was lost to charities in the theft and fraud cases that were reported to the Charity Commission in the year. It is most likely that the total lost across the sector is well in excess of this amount as not all instances of fraud and theft will have been identified. Not all mismanagement, however, relates to fraud or theft. Pitfalls that can attract the interest of the compliance division will include:

  • alleged misapplication of funds
  • fundraising practices in breach of guidelines
  • high support or administration costs
  • low levels of 'charitable expenditure'
  • high staff costs
  • poor financial controls or record keeping
  • failure to file accounts and returns with the Commission, or filing of accounts that do not comply with the Charities SORP.

Vulnerable beneficiaries

Many charities' activities are for the benefit of children or vulnerable adults and trustees have a duty of care to those beneficiaries – safeguarding procedures are essential for their protection. The Commission was involved in investigations concerning suspected or alleged actual abuse in a number of instances. However, more often the Commission's intervention related to the failure of charities to have in place appropriate safeguarding policies and practices at all. Trustees of such charities must ensure that appropriate safeguarding procedures are demonstrably in place in their respective charities and that there is effective monitoring to ensure that the policies are adhered to rigorously.

Inappropriate political activity

While charities are entitled to carry out political activities that support their charitable objectives, they must be, and be seen to be, independent from party politics. Failure to adhere to this principle damages the independence and reputation of the relevant charity. Political donations may not be made by a charity and support may not be given to a particular party. In the period running up to the 2010 General Election, a greater number of cases involving political activity and campaigning attracted the attention of the Charity Commission than would normally be the case. Trustees need to take care not to cross the sometimes fine line between what is and what is not permissible.

Trustees are advised to consider the cases described in Charities Back on Track and particularly to note the lessons to be learnt. This should ensure that your own charity does not appear as a case study in the Charity Commission's next annual review.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.