New guidance issued on working with commercial participators and professional fundraisers

In August 2024, the Fundraising Regulator issued new guidance for charities around working with commercial participators (here).

Broadly, a commercial participation arrangement is one where a business promotes certain goods or services on the basis that they will make a donation to a charity.

These arrangements are subject to specific legal requirements, and the guidance provides a helpful summary of the steps that both charities and commercial participators need to take.

The Fundraising Regulator also issued similar guidance in relation to working with professional fundraisers (here).

Action point: Charities with these arrangements in place should consult the new guidance, to better understand the legal and regulatory requirements.

Fundraising Regulator due to issue revised Code of Fundraising Practice

In late 2024, the Fundraising Regulator oversaw the final stage of its consultation process relating to its new draft Code of Fundraising Practice.

The aim of the Fundraising Regulator has been to produce a more streamlined version of the Code, with links to relevant external guidance where relevant.

The finalised version of the new Code, taking account of the latest consultation process, is expected to be published in the Spring of this year.

Action point: Charities should look out for the publication of the new Code in Spring 2025.

Charity trustees disqualified at Fashion for Relief

All three trustees at the charity Fashion for Relief (including supermodel Naomi Campbell) were disqualified by the Charity Commission following a statutory inquiry, and the charity has been wound up.

The Charity Commission found serious governance and financial mismanagement at the charity, including low levels of expenditure on charitable activities (at 10%), unauthorised payments to a trustee and unreasonably high trustee expenses.

Action point: The inquiry is a reminder that legal standards apply to all charities and trustees, regardless of their profile and status.

Official warnings issued by the Charity Commission

The Charity Commission issued two official warnings in recent months:

• To Calderdale Metropolitan Borough Council in September 2024, for its failure to file accounts and annual returns for 13 charities where it acts as charity trustee. This was the first instance of a local authority being issued with an official warning (here).
• To a Christian education charity in October 2024, around its links to political lobbying carried out by a connected, non-charitable body (here).

Action point: Charities should note that serious failures can result in the regulator issuing a warning.

Charity Commission revises key guidance on decision making

In September 2024, the Charity Commission published a revised version of its guidance document CC27, which is now called Decision-making for charity trustees.

The guidance still focuses on seven core legal principles which trustees need to follow when making decisions.

The new version is more concise however, which is increasingly the approach being taken by the Charity Commission.

Action point: This is a key piece of Charity Commission guidance, and all charity boards should have regard to the new version.

Charity Commission reports on mismanagement of The Captain Tom Foundation

In late November 2024, the Charity Commission published a lengthy report with details of its statutory inquiry into The Captain Tom Foundation.

The report highlights various instances of misconduct and/or management in the administration of the charity, which garnered quite some attention in the national media.

For more details on the Charity Commission’s findings, please see the article we published in December of last year.

Action point: Charities and their partners should note that the misuse of a charitable vehicle can result in serious regulatory action.

VAT extended to private school fees, and business rates relief removed

For terms starting on or after 1 January 2025, VAT will now apply to private school fees at the standard rate of 20%. This step was confirmed in the government’s Autumn budget.

From April 2025, private schools will also no longer be eligible for charitable relief from business rates. These steps are expected to cause significant financial challenges to some charitable school providers.

Action point: Charities that are subject to these changes will need to carefully review the financial and wider impact.

Reforms on the way for co-operative and community benefit societies

The Law Commission, which recommends reforms in relation to the law in England and Wales, has turned its focus to co-operative societies and community benefit societies.

These entities were previously known as “industrial and provident societies” until the last reform of the law in this area, when they were renamed under the Co-operative and Community Benefit Societies Act 2014. The Law Commission’s principal task with this consultation is to review the 2014 Act.

For details on the proposed reforms, please see the article we published in October of last year.

Action point: The boards of all co-operative and community benefit societies should monitor the progress of these proposed reforms.

Commencement of the Procurement Act 2023 delayed until February 2025

The changes introduced by the Procurement Act 2023 were due to come into force in late October 2024, but these have been delayed to 24 February 2025.

For more information on these changes, please contact our Procurement colleagues and see the range of articles they have published on this topic.

Action point: Charities that work with contracting authorities, or are subject to the rules, will need to be aware of these changes.

The new Employment Rights Bill: what employers need to know

The government has published an extensive package of reforms to employment law in its Employment Rights Bill, which has been described as the biggest overhaul to employment law in a generation.

For more details on the changes being introduced by the Bill, please see this article published by our Employment colleagues in October 2024.

Action point: Charities that employ staff will need to be aware of these upcoming changes.