2014 has been an eventful year for the Charity Commission. Paula Sussex was appointed as the new Chief Executive in the summer, a draft Protection of Charities Bill has been published and they have been given extra funding. The bill aims to improve protection for charities against individuals who are unfit to be charity trustees. The Charity Commission would be granted enhanced powers to tackle abuse of charitable funds more effectively and efficiently.
The proposed changes would allow the Commission to issue an official warning to charity trustees if they breach charity law. It will also allow the commission to ban those with certain criminal convictions from becoming charity trustees. The Commission will be able to disqualify individuals from becoming charity trustees where they consider them to be unfit to act and trustees will be prevented from resigning in order to avoid removal by the commission.
The government has also announced an additional £8 million of funding for the Charity Commission to tackle misuse of charitable funds. The recent changes have been welcomed by the Charity Commission saying “the new funding and the powers included in the draft legislation will make it a more efficient, effective and agile regulator.” The money will be used by the commission to invest in technology and frontline operations in order that it can improve and strengthen its work to identify abuse and mismanagement in charities.
The Charity Commission has argued for some time that it needs better powers in order to be an effective regulator. The combination of increased powers and funding will provide the Charity Commission with a much broader armory to ensure charities are working within the scope of their charitable objects, whilst observing good governance and compliance with their legal obligations.
In the light of these developments, it is essential that charity trustees understand and follow their legal obligations. The consequences of not doing so can be serious for the trustee personally and for the charity they represent. The Charity Commission has recently updated its guidance for charity trustees as part of an on-going consultation. At Stephens Scown, we can offer practical legal advice and assistance to help you keep your charity compliant, agile and on track with its objectives, including guidance on the duties of trustees.
Please feel free to contact us if you would like more advice and a better understanding of the duties of trustees or any other issue relating to your charity.