Charity Commission revises initial Coronavirus Guidance

The Charity Commission has responded to criticism of guidance which it has recently issued to charities in respect of reporting serious incidents if they are adversely impacted by Coronavirus. 

Charity trustees have legal duties to report serious incidents to The Charity Commission which may include having to suspend or withdraw all or part of their charity’s services if it cannot operate due to the impact of Coronavirus on its operation.  It could also include charities that are facing financial difficulties as a result of suspension or cancellation of public events that draw in essential funds, or the suspension or withdrawal of grant funding because grant-makers are experiencing falls in the value of their investments.   

The Charity Commission has revised the guidance after facing criticism for adding unnecessary pressure to charities and their trustees particularly when trustees are already inundated with information about risk management and managing their charity’s finances. The Charity Commission has acknowledged that the guidance was not as helpful as they would have liked it to be. A new update has subsequently been issued by The Charity Commission in which charities have been advised to refer to the current serious incident guidance and “use their own judgement” when assessing whether a report should be made to The Charity Commission. When using their own judgment in assessing the impact of the coronavirus pandemic on the charity, Charity Trustees must have regard to the charities activities, its mission and how they can safeguard individuals who come into contact with the charity from harm.

Charity trustees are faced with an unprecedented situation where urgent decisions have to be made about suspending services and the knock-on effect on the charity’s finances and service users, dealing with staff and volunteer shortages, HR issues and a fall in value of their investments. Practical considerations for trustees faced with being unable to hold face to face meetings are to check the charity’s governing document for provisions which allow trustees to take decisions by electronic means and/or passing written resolutions. For charities with good conferencing facilities meetings can be held by telephone or video conference. Fortunately many are in a position where technology can assist trustees with taking urgent and important decisions in an unprecedented situation. Trustees should familiarise themselves with the charity’s governing document to ensure that procedures are followed as far as possible and that clear records are kept of their deliberations and rationale for taking decisions.

In some circumstances and at the appropriate time it may be appropriate for trustees to consider amending their charity’s constitutions if they are out of date and do not include provisions for holding electronic meetings and passing written resolutions. Provisions like these can be very helpful in urgent situations where trustees are trying to do their best and may be concerned about future challenges on any difficult or controversial decisions taken with the later benefit of hindsight.

Nonetheless charity trustees should continue to adopt a reasoned and proportionate approach to risk management taking into account the specifics of their charity’s circumstances, and updated guidance as it is issued by the Government. The Charity Commission has always been very clear that in situations where, with the benefit of hindsight, a different decision may have been taken; provided trustees can demonstrate that they acted reasonably taking into account all relevant considerations, took and acted upon appropriate advice and guidance and have a clear rationale for their decision backed up by following proper procedures and minutes etc, it is highly unlikely they will seek to hold the trustees to account for something which was beyond their control. This particularly applies in an unprecedented situation where everyone is trying to pull together and do their best. Trustees will therefore wish to have regard to other guidance issued by The Charity Commission particularly around meetings and decision-taking. We have provided some more detailed guidance on this in a separate briefing.

Posted on: 20/03/2020

This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.

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