Charities Update: The Year in Review
10 December 2018
2018 was a busy year for the charities sector. In this article we set out three highlights from the year that will impact charities as we proceed into 2019.
Charities Regulatory Authority publishes new governance code
The “Charities Governance Code”, which was published by the Charities Regulatory Authority in November 2018, is an essential document for charity trustees.
The Code is drafted on a “comply or explain” basis, meaning that charities must comply with the Code or else explain why they have not done so. All charities will be expected to implement the Code from 2020 onwards.
The Code contains six “principles” of governance which require the charity trustees of every charity to ensure that the charity is:
Advancing its charitable purpose;
Behaving with integrity;
Working effectively; and
Being accountable and transparent.
We discuss the Code in greater detail here.
GDPR now effective
The new General Data Protection Regulation (GDPR) came into force on 25 May 2018 and marks a significant change in the EU data protection regime. The GDPR has an increased emphasis on transparency and accountability in the way in which organisations including charities gather, store and use people’s personal information.
In practice the GDPR raises the bar for the consents which organisations must obtain for data processing. For example, tick-the-box type consent forms covering all forms of data processing are unlikely to be sufficient. In fundraising activities, for instance, your charity will need to ensure that consent has been obtained for the specific purpose of fundraising.
Even where your charity has processed personal data lawfully, the length of time you retain the data will require careful consideration. The retention periods for different categories must each be considered separately, rather than applying a blanket policy for all data held, and you must ensure that your charity has a justification for retaining personal data.
We previously wrote in greater detail about the implications of the GDPR.
Valuation Tribunal and Rates - Religious & Educational Charities may Save Money
A decision of the Valuation Tribunal, unless successfully appealed, establishes that the advancement of religion is now a charitable purpose for rates. Previous legislation and associated case law restricted the religious exemption to churches used for public worship. The educational exemption was restricted to education of the poor. These two restrictions no longer apply.
Some educational charities may continue to be rated based on earlier decisions limiting exemption to education of the poor - they may now apply under the general rates exemption as a charitable organisation. Religious charities may now likewise apply for exemption on their offices or other buildings.
Interpretation of rates legislation is a highly technical and evolving area. In July 2018, we wrote about the implications of the Valuation Tribunal’s Decision.
What is to come for 2019? Charity trustees should use 2019 as an opportunity to get to grips with how the new Code of Governance will work. If your charity already has a governance code, you should consider how you might develop it to accommodate the new requirements of the Code.
The GDPR is an important change in how organisations process and store information, and you should ensure that your charity continues to be GDPR compliant during 2019.
If you would like assistance with future-proofing your governance codes or structures, or to discuss any of the matters set out in this roundup, please feel free to contact a member of our Charities & Not-for-Profit team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.