In an alert issued today, the regulator says it believes serious incidents are underreported, preventing the Commission from assessing the true scale and nature of risks facing charities and putting some charities and their work at risk where the trustees need assistance to handle them.
The Commission defines an incident as serious if it risks or results in significant loss of a charity’s money or assets, damage to a charity’s property or harm to a charity’s work, beneficiaries or reputation. The most common types of incidents reported include fraud, theft and confirmed safeguarding issues.
In 2013-14, 1,280 serious incidents were reported by charities to the Commission. While this represents an increase on the previous year (971 incidents were reported in 2012-13), the regulator says its case work continues to find serious incidents that should have been reported but were not.
The alert makes clear that the Commission’s regulatory response to a problem will reflect whether or not trustees made a serious incident report and how promptly they do so. If trustees fail to act responsibly in relation to an incident (including failing to report, or not reporting promptly when the incident occurred), the Commission may consider this to be mismanagement and take regulatory action, particularly if further abuse or damage has arisen following the initial incident.
The alert also points out that the potential reputational damage of an adverse incident can be mitigated if trustees are able to demonstrate that they acted responsibly in handling the problem. The Commission is reminding charities that, if asked by the media about an incident, the Commission will normally provide a statement acknowledging that trustees acted responsibly in reporting it.
Michelle Russell, Head of Investigations and Enforcement at the Charity Commission, says:
I urge trustees of all charities to read and follow the guidance we have issued today and to report incidents to us as soon as they occur. Reporting incidents is a basic part of responding responsibly to a problem in a charity. We see cases where charities experience more serious problems down the line, including reputational damage, in part because trustees failed to report an incident to us in good time. So my message is: don’t compound the problem that has occurred, help solve it by reporting it to the Commission.
The Commission is reminding trustees that charities required to file accounts (those with an income of over £25,000) must also confirm, in their Annual Return, that the charity did not experience any serious incidents that should have been brought to the Commission’s attention but were not.
Notes to editors
- The Charity Commission is the independent regulator of charities in England and Wales.
- Our mission is to be the independent registrar and regulator of charities in England and Wales, acting in the public’s interest, to ensure that:
- charities know what they have to do
- the public know what charities do
- charities are held to account