Catherine Rustomji presents a round up of recent developments within the sector.
Two charities breached Data Protection Act, rules ICO
The Information Commissioner’s Office has found two charities in breach of the Data Protection Act after the charities’ unencrypted laptops containing sensitive information were stolen.
Sheffield-based Asperger’s Children and Carers Together (ACCT) and Nottingham-based Wheelbase Motor Project (WMP), which works to educate hard-to-reach children, both reported breaches to the ICO after the laptops were stolen in separate incidents.
The medication information, names, addresses and dates of birth of 80 children were contained within the ACCT laptop which was stolen from an employee’s home in December last year. Details of the past convictions and child protection issues of 50 children were contained within the WMP laptop, which was stolen from the charity’s offices.
A spokesman for the ICO confirmed that neither laptop nor their hard drives had been recovered. “While we have no reason to suspect that the information has been used, there’s nothing appearing online or elsewhere, we can’t confirm that this is the case,” he added.
The charities were both spared a monetary penalty. Since 6 April 2010 the ICO has had the power to impose a penalty of up to £500,000, but just five have been issued so far.
“In deciding whether a monetary penalty is justified we look at whether the information could cause substantial damage or distress,” said the spokesman.
The information contained in the charities’ laptops was not deemed to do so, he advised: “It was stuff that would be embarrassing but we look at whether or not it would cause any long-term damage. It’s also about the measures taken in policy and procedures. In these cases there were passwords to protect the information. But there was no encryption. We recommend encrypting any laptop containing sensitive information.”
Deborah Woodhouse, director and co-founder of ACCT and Michael Clifford, chief executive of WMP have signed undertakings to ensure that all portable devices storing personal data will be encrypted.
Woodhouse has also agreed to update existing policies and procedures for the storage of sensitive information and to ensure staff receive training on how to follow them, while Clifford has agreed to ensure WMP’s existing policies are successfully communicated to staff and monitored.
Sally-Ann Poole, acting head of enforcement at the ICO, said: “The ICO’s guidance is clear – any organisation that stores personal information on a laptop or other portable devices must make sure all the information is encrypted. Information about young people’s medical conditions or criminal convictions is obviously sensitive and should be adequately protected. We are pleased that both charities have agreed to take the necessary steps to ensure that the personal information they hold is kept secure from now on.”
Charity wound up amid fundraising irregularities
A fundraising company has been wound up in the High Court after passing on only a small proportion of the money it raised to charities.
Needy Children International Foundation, which had offices in Wolverhampton and Manchester, was wound up last week for breaching section 60 of the Charities Act by failing to tell donors how much of their money would go to charity.
An Insolvency Service investigation found the company paid only between 9p and 22p of each pound raised to good causes. The rest of the money was used to pay staff.
The Department for Business, Innovation and Skills obtained an injunction against the company in February that prevented it from raising more funds because of concerns that its staff were using a “misleading script” to raise public donations.
Scott Crighton, investigation supervisor at the Insolvency Service, said the charity was the latest of a number in the Manchester area to have been wound up after “failing to show transparency in their fundraising activity”.
Charity Commission publishes last chapter of trustee toolkit
The Charity Commission has published the last chapter of Protecting Charities from Harm, its online compliance toolkit for charity trustees.
The toolkit has been developed in partnership with the charity sector and is a useful guide which aims to give trustees some practical advice to help manage risks and protect their charity and its property from harm.
All charities need money or financial assistance of some kind. Charities raise and spend money in a variety of ways within the overall objective of fulfilling their charitable purposes. This includes direct spending on charitable projects to help beneficiaries and supporting governance, administration and fundraising. Charities which work internationally often move money across international borders, encountering different financial systems and needing to use different currencies. Whatever the charity, its trustees are legally responsible for ensuring their money is used for legitimate charitable purposes and safeguarded, as much as possible, from loss.
Most countries in the world have some form of banking system in place. Using the banking system is a prudent and responsible way to ensure that charity funds are safeguarded, and that there are appropriate audit trails of the sort which trustees must keep for the receipt and use of charity money. This chapter of the toolkit:-
- looks at the need for charities to have and use bank accounts;
- explains what the trustees’ duties are when using the banking system; and
- explains the particular issues which arise in connection with exchanging sterling for other currencies.
However, charities may need to use and work in cash to some degree. Charities may need to use alternative financial systems, although these are more inherently risky than using formal banking systems. These include Money Service Businesses, agents using alternative remittance systems, Payment Services, cash couriers, or even other charities and NGOs.
This guidance provides advice to trustees about what things they need to consider if they have to use cash and these alternative methods; the associated risk management factors; and the sort of financial controls which may be appropriate. Practical tools for trustees to help them meet their legal duties have also been developed.
The earlier chapters of covered charities and terrorism; due diligence and monitoring; and fraud and financial crime. The toolkit can be found on the Commission’s website – http://www.charitycommission.gov.uk
Second Trustees’ Week – 31st October to 6th November 2011
The second national Trustees’ Week will run this year from Monday 31st October – 6th November following on from the success in 2010 of the first national campaign dedicated to raising awareness of trusteeship.
Trustees’ Week 2011 will celebrate the fantastic work of existing trustees and aim to increase awareness and understanding of the trustee role. Part of the campaign will encourage existing trustees to send photos and video clips of themselves and their boards to be posted on the Trustees’ Week website saying why they became a trustee and what they enjoy about it.
Last year more than 30 events were run under the Trustees’ Week banner up and down the country. More than 40 MPs signed the supportive Parliamentary Early Day Motion as well as providing supportive quotes and press releases, and the Trustees’ Week website received 21,000 page views. One of TW2010 partners, Reach, saw a near 20% increase in visitors to their website as a result.
The week is again organised by the Charity Commission in partnership with Charity Trustee Network (recently merged with the Small Charities Coalition), the National Council for Voluntary Organisations (NCVO), Reach Volunteering, Getting on Board, ICAEW (Institute of Chartered Accountants of England and Wales), Governance magazine and the National Unions of Students (NUS). Dame Suzi Leather, Chair of the Charity Commission, said:
“Trustees play an essential role in charities, driving the direction and activity of the organisation. With so many charities with trustee positions vacant we need to do more to increase understanding of this very special way of volunteering. Trustees are hugely committed individuals who use their time and knowledge to make a difference. Trustees’ Week again acknowledges the massive contribution trustees make, and working with the Trustees’ Week partners we aim to build on last year’s success to make sure even more people are aware of what trusteeship is all about”
Whilst there are around 800,000 trustees in England and Wales, estimates suggest that almost half of charities have a vacancy on their trustee board. A number of the organisations behind Trustees’ Week provide trustee matching services, details of these can be found at http://www.trusteesweek.org.uk/.
The Trustees’ Week website will be updated regularly in the run-up to 31st October with information about the campaign and details of events and activities planned by charities and other organisations. If you are organising a Trustees’ Week event or if you are a trustee and would be willing to be a case study, please email firstname.lastname@example.org
Risk management for small charities
The Charity Commission has now dedicated a section of their website to guidance for small charities. They have recently updated that section to include a range of new information on avoiding problems – an approach that they are generally referring to as “risk management”.
The information includes ten useful questions trustees can ask themselves to help avoid problems, as well as a list of common risks. There is also a step by step guide to enable trustees to make their own risk management plan.
Should you have any uncertainties about what insurance is required to cover your charity’s activities,, the Charity Commission has published updated guidance – “Charities and Insurance (CC49)” to help support trustees in making the decision for their charity.
The updated guidance provides a framework designed to give trustees confidence in their own judgment. It sets out trustees’ legal duties in connection with insurance and emphasises that decisions around insurance should be part of trustees’ wider risk management policy.
The guidance explains that insurance is not the only solution to managing risks, but it can be an appropriate way for trustees to protect their charity against any loss, damage or liability arising from risks.