The Charity Commission, the independent regulator of charities in England and Wales, is issuing an alert to trustees, warning them to review any commercial relationships they may have. This follows concerns raised with the commission and in the media regarding the commercial arrangements of some charities.
Charities have many legitimate commercial arrangements raising funds for good works, however trustees need to protect the reputation of their charity and ensure their actions reflect the values of their charity as well as meeting legal requirements.
The alert sets out the expectations of the commission including: checking for conflicts of interest; ensuring arrangements are properly documented and reviewed regularly; and, that the commercial benefits to the charity are made clear. It is being published publicly and sent to the 1,700 charities that the commission knows to have some form of commercial arrangement.
The alert states that failure to comply with the commission’s expectations could result in regulatory action.
William Shawcross, chairman of the commission, said:
This alert should prompt trustees to check their ties to commercial operations. These bring in important income for charities and fund valuable work for beneficiaries. It is essential, however, that any arrangements are transparent and that they do not jeopardise the reputation of the charity. The public expects charities to abide by the values they claim to represent.
The alert comes on the same day as the commission holds a public meeting in Southampton. William Shawcross will be reflecting on a difficult year for charities and setting out how charities’ trustees must respond.
The chairman will also set out how, despite a 50% reduction in its budget, the commission is responding. This includes highlighting the new powers recently granted by Parliament for the commission to permanently ban unfit trustees and issue public warnings to charities that are in breach of commission guidance.
Notes to editors
- The Charity Commission (the commission) is the independent regulator of charities in England and Wales. See GOV.UK for further information.
- 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
- There are nearly one million trustees in England and Wales. The sector is valued at approximately £69 billion, with 165,000 charities registered with the commission.