Charity Commission guidance for Charities regarding COVID-19
The Charity Commission has published guidance for the charity sector in respect of difficulties they may be facing due to the Coronavirus (COVID-19) pandemic. For some charities, this may be an increase in demand for others a stark financial picture.
The Charity Commission guidance highlights the following key areas for charities to consider:
- Financial support for those charities no longer able to operate due to COVID-19 to enable charities to pay wages is available in the same way that it is to businesses.
- Reserves held by the charity can be spent to help cope with the charity’s financial position; however trustees will still need to consider the short, medium and longer term priorities.
- Funds that have been designated for particular projects by the trustees can be undesignated and used for other purposes.
- Restricted and permanently endowed funds (where the donor has specified that the funds must be used for a particular purpose) should only be considered after other options such as the use of reserves are not possible. There may be ways under the Charities Act 2006 or the terms of the original gift to amend or release the restrictions on these funds; but you should seek professional advice if you are considering this option and that the Charity Commission will be as helpful as possible where its consent is needed.
- If necessary to postpone or cancel an AGM or other critical meetings. This is acceptable given the circumstances but you should record this and still try to get the annual report to the Charity Commission on time.
- Check your governing document if you are planning to hold meetings by video or teleconferencing. Some governing documents will include a provision allowing this, others will not. You should ensure that you demonstrate good governance if you decide to proceed with meetings in this way.
- The Charity Commission has retracted its initial statement around requiring charities to file a serious incident report in respect of COVID-19. It does however state that trustees should continue to file serious incident reports in accordance with the guidelines which include matters such as the charity no longer being able to function, theft, fire etc.
- Charities are reminded to ensure that volunteers and staff are protected and it is recommended that charities refer to the Charity Commission safeguarding guidance.
- The Charity SORP accounting standards has issued updated guidance. The guidance considers the implications for the trustees’ annual report, going concern and the alternative basis to going concern when preparing accounts under the SORP. It does not however amend the SORP.
The Charities and Social Enterprise Team at Hempsons can help with the following:
- Advice on holding electronic meetings and postponing AGMs;
- Serious incident reporting;
- Designated, restricted and permanently endowed funds and how they can be spent;
- Employment matters;
- Contract disputes or variations;
- Safeguarding of volunteers and employees; and
- Regulatory issues.
For an initial 15 minutes free consultation please email firstname.lastname@example.org with brief details of your query and we will arrange for an appropriate specialist to return your call.
In addition, particularly for health and social care charities, find out all about the latest coronavirus law changes at our COVID-19 portal.