Too many serious incidents are not being reported to the Charity Commission, the regulator has said as it published new guidance on when trustees should alert it to problems.
Trustees should report certain serious incidents to the commission as soon as possible after they occur, rather than leaving it until that year’s annual report is filed to explain what happened, according to the regulator.
But the commission said there was "significant under-reporting of problems by charities" and this was putting them at risk of further harm.
The new guidance includes examples and checklists to demonstrate what sort of incidents should and should not be reported. It also contains more detail than previous guidance on when events that have resulted in the charity losing large amounts of funding should be reported.
The commission consulted on a draft version of the guidance between October 2016 and January last year, and published a summary of the responses it received alongside the final guidance.
Some organisations, including the Charity Finance Group and the Small Charities Coalition, had raised concerns about some of the examples given in the draft guidance, such as negative media attention or loss of funding, warning they could lead to a deluge of reports about mundane incidents.
In its summary of consultation responses, the commission acknowledged the concerns and agreed to qualify the wording to make it clear that, in such cases, only serious, non-routine issues or those that might affect the charity’s survival should be reported.
The summary said legal advisers and some larger charities had expressed concern that the draft guidance said trustees had a duty to report serious incidents when there was no legal duty to do so, only the fact that the commission considered this to be best practice.
In response, the commission agreed to ensure the final guidance did not imply there was a legal duty and instead use terms such as "should" and "the commission expects".
The move was welcomed by umbrella bodies. Andrew O’Brien, head of policy and engagement at the CFG, said the organisation was very happy that the commission had taken its concerns on board.
"This guidance is much improved as a consequence and will help charities to better understand their responsibilities," he said. "It is critical that we get the right balance between ensuring the commission has the information it needs to do its job and minimising the reporting burden on the charity sector. This improved guidance does that."
Karl Wilding, director of public policy and volunteering at the National Council for Voluntary Organisations, said the regulator had made a "number of sensible revisions" that reflected feedback from the NCVO and its members.
"The serious incident report framework remains relatively new," he said. "We hope to see further dialogue with charities and reviews based on lessons learned from its operation."