Charity Commission publishes final guidance on linked bodies

Charity organisations still have some concerns about the guidance, which has been amended in consultation with the sector

Charity Commission offices
Charity Commission offices

Concerns remain about new Charity Commission guidance on how charities should manage their relationships with companies that use the same branding.

The commission published Guidance for Charities with a Connection to a Non-Charity today after admitting that draft guidance published last year was confusing and too long. 

It has been working on the guidance in response to concerns that charities – particularly charity shops, corporate foundations and organisations with trading subsidiaries – were exposing themselves to risks by working with linked bodies.

The regulator agreed to revise its 39-page draft guidance in consultation with the sector after acknowledging it could be improved.

Today's final guidance, which is 15 pages long, has been widely welcomed as an improvement, but senior sector figures still have concerns, in particular about the extent to which it highlights the risks of such relationships.

Emma Hutchins, policy and communications manager at the Association of Charitable Foundations, said: "Initially, we were particularly concerned about the framing of the debate purely in terms of risk, as well as the wide-ranging scope of the guidance. While it was not entirely ameliorated, we are pleased that the commission was open to addressing some of these issues."

Douglas Dowell, senior policy officer at the National Council for Voluntary Organisations, said connected relationships could often work in the interests of charities.

He said the regulator had come up with a "more balanced approach" that was "more supportive of connected relationships", but added: "We would, however, still have liked the definition of ‘connected’ to be drawn a little more tightly.

"We would also have liked the tone to be more neutral about considering alternatives to setting up a connection with a non-charity."

Simon Steeden, partner in the charity and social enterprise department of the law firm Bates Wells Braithwaite, said: "The commission has helpfully recognised more of the benefits that can come from these relationships and has removed many of the most unworkable aspects of the original draft."

But Steeden added that some aspects of the guidance remained impractical and "the guidance raises a high bar for documentation governing the relationship between a charity and connected non-charity".

He added that it had been a "model consultation process" in which the commission had heeded feedback.

"I would urge the commission to adopt this for other advice and guidance," he said. "It contrasts sharply with the issuance of the recent regulatory alert for charitable think tanks, for example."

A spokesman for the Charity Retail Association said: "We will consider the guidance carefully and its wider impact on the charity retail sector."

The guidance sets out six principles to help trustees ensure their arrangements for working with linked bodies secure charities’ interests and independence.

A commission spokeswoman said: "After a full consultation with the sector, the revised document is considerably shorter.

"It is supported by checklist tools and an at-a-glance visual to help different groups of charities understand and apply it."

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