Draft guidance for charities connected with non-charitable organisations

The Charity Commission is consulting on draft guidance for charities on their relationships with connected non-charitable organisations, in the light of case reports received in recent years, and is seeking feedback on ways to improve the usability and effectiveness of the information provided

The Commission says it has prepared the guidance to help trustees understand the risks and challenges involved when setting up or maintaining a close relationship with a connected non-charitable organisation.

It cites examples from reviews within the last two years, which include a charity funding research by a non-charitable organisation with political aims; significant commercial benefit to a connected organisation resulting from the charity’s operational activity; and the difficulty of distinguishing whether a service is provided by a charity to help its beneficiaries, or by its trading subsidiary to raise money for the charity.

Although the legal framework and principles in the draft guidance are not new and are reflected in other pieces of Commission guidance, the regulator says there is no single piece of guidance which draws together the full range of issues.

The draft guidance is made up of detailed guidance, plus an at-a-glance summary which gives an overview of the issues, and a checklist that charities can use.

It is aimed at charities that have connections with one or more non-charitable organisation. These are defined as relationships that exhibit characteristics such as having the same people (trustees/directors) involved at the charity and the non-charitable organisation; shared names, branding, websites, and/or premises; regular funding flowing from one organisation to the other; shared aims or purposes; and/or shared staff

The Commission says that in future, where it needs to investigate, it will use the guidance to hold to account those trustees who fail to comply with their legal duties and, as a result, expose their charity to significant risks or consequences.

It is seeking feedback from charities that are connected with non-charitable organisations and from non-charitable organisations which are linked to charities or are considering establishing a charity, as well as anyone with an interest in charities.

An analysis of the responses will be published within three months of the end of the consultation, which closes on 15 May. There is an online survey link here.

The Commission says it will also be announcing other opportunities for feedback, including roundtable events, meetings and Twitter-based discussions.

Charities that are connected with non-charitable organisations: maintaining your charity’s separation and independence is here.

Report by Pat Sweet

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