Brexit continues to be a major risk mentioned in many charities' annual reports, mainly focusing on funding and issues around movement of people. The Charity Finance Group has added to this debate with a report, produced by the Institute for Public Policy Research, that says 82 per cent of EU nationals currently working in the charity sector would be ineligible to work in the UK if the same rules that apply to non-EU nationals were applied to them. This rises to 87 per cent in social and residential care job roles.
EU nationals make up some 4 per cent of the charity workforce and are more highly qualified, and younger, than their UK equivalents. This is especially true in membership organisation charities and those working in areas such as social work, residential care and education. Charities also seem ill-equipped to face this challenge, with most of them thinking that it would be difficult to replace these staff, with little experience of recruiting outside the EU and lacking funds to provide additional training to fill the skills gap.
Welcome pack for trustees
The Charity Commission has issued a "welcome pack" for new charity trustees. Most welcome packs in my experience include some free goodies, but sadly the commission’s is a list of duties for trustees to follow and some resources to use.
The introduction says: "Charities have a special place in our society because they are committed to helping others. This creates a level of trust from the public that we must protect." This seems to perpetuate a recurring theme – that trustees should not only act in the interests of their own charity, but also of the sector as a whole.
The first things trustees are expected to do are to get to know the charity, then go to meetings, make decisions and put the charity’s interests first, and after that be ready to learn the trustees’ six main duties. This article is finance-focused, so it is good to see that, within this regime, trustees are expected to apply their funds properly, and to file their accounts on time and to the required standard.
After last month’s report from the Charity Commission, the Office of the Scottish Charity Regulator has now produced guidance for Scottish charities about how to reduce the risk of fraud. It highlights some of the risks of fraud to which charities are vulnerable and provides practical advice for trustees on how to tackle it.
The guidance tells trustees what their legal duties are, how they can reduce the risk of fraud and how the OSCR will consider instances of fraud in charities.
On the same theme, the Charity Commission for Northern Ireland promoted a guide, produced by the National Cyber Security Centre, aimed at helping small charities. It contains simple and free – or low cost – steps that will help organisations protect themselves from the most common types of cybercrime.
The government has introduced draft legislation requiring larger companies to include governance statements within their annual reports. In response, the Financial Reporting Council has issued The Wates Corporate Governance Principles for Large Private Companies, which sets out a code to be adopted by any company that has either more than 2,000 employees or a turnover of more than £200m and a balance sheet of more than £2bn. On that basis, very few charities will be affected, but nonetheless this is the first time that companies that are not listed have faced such a requirement. It seems inevitable that the same principle will soon apply to at least some charities in the next Statement of Recommended Practice iteration.