We are happy to present our latest charity law update in Trustees’ Week (3-7 November) which celebrates the contribution of volunteer trustees in the UK. The role of trustee can be extremely rewarding but also presents challenges, and we enjoy guiding boards through legal issues that may arise.

We recently delivered our annual series of trustee training webinars, which provided a refresher on the legal duties of trustees. We have a range of other webinars coming up in the new year, covering:

• the role of the company secretary;
• social care sector mergers involving charitable providers;
• property disposals for charities.

Subscribe to our mailing list to receive our webinar invitations straight to your inbox.

We hope many of you will be able to join these informative sessions. If you need any legal help or would like to discuss any queries relating to your organisation in the meantime, we would be delighted to hear from you.

New Code of Fundraising Practice now in force

As noted in our last update, the revised Code of Fundraising Practice (“Code”) issued by the Fundraising Regulator came into effect on 1 November.

The Code, available here, now takes a “principles-based” approach rather than listing detailed rules for every fundraising area. The Code is shorter as a result, and refers to external sources on many topics (such as Gift Aid, GDPR and lotteries).

Action point: Trustees and other parties involved in charity fundraising will need to ensure that they now consult the new Code.

Charity Commission concludes statutory inquiry into unauthorised personal benefits at health charity

In July the Charity Commission published its report into the Island Health Charity, looking at unauthorised and excessive payments to trustees by this charity, which owned and leased a building to a NHS GP practice.

Over a two year period, a company owned by the chair of the charity had been paid around 60% of the charity’s income, totalling almost £350,000, for project managing the strategic development of the charity.

The level of payment to the chair was criticised, as well as the expenditure of charity funds on new projects which fell outside of the charity’s objects. The Charity Commission’s report can be found here.

Action point: Trustees should note that if they wish to use charity resources and funds towards a new strategy, this must fall within the objects of the charity. Spending must also be proportionate and within the authorised powers of the charity.

Data law amended to relax rules around direct marketing by charities

Data law is due to be amended in January 2026 to make it easier for charities to make contact with existing supporters for direct marketing purposes (via electronic means). The change is known as the “soft-opt-in” exemption, and is proposed to be extended to charities.

The Information Commissioner’s Office (ICO) is running a consultation on the upcoming change, which will run during most of November. Details of the consultation and related changes can be found on the ICO website (here).

Our Data Protection team is able to help with any queries on these upcoming law changes, and use of the soft opt-in exemption.

Action point: Trustees will want to be aware of this marketing option, and should ensure they only make use of it in a way that is legally compliant.

What to do if a main funder falls away

Our external contribution, from Phil Reynolds at FRP Advisory, looks at what charities and not-for-profit organisations should do if one of their main funders falls away, leading to financial stress within the organisation. The article identifies recommended actions for trustees, including:

• acknowledging pressures on funders and external risks to funding;
• having contingency plans in place;
• timetables for action if replacement funding is not secured;
• realistic assessments of reserves, staffing and merger opportunities.

Phil provides vital insights into what might lead to financial stress, and options for mitigating risks if difficulties do arise.

Action point: Trustees can respond far more effectively in challenging times, if risk assessment and contingency planning is part of the charity’s culture.

Read Phil’s article here

You can find out more about our work in the charities and social enterprise sector and get in touch with Stephen and Martyn on our website.

If you need any legal help, have any questions, or would like to discuss any of the issues covered in this update, we would be delighted to hear from you.