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I am a trustee of a charity which has been on the go for some time now. Is there anything that I should be considering or any changes in the law that I should be aware of?

Despite the economic pressures, and very possibly because of them, charities have continued over the past years to do some ground-breaking and invaluable work for a number of good causes.

For those involved in running a charity, including management and board members, it can be very easy to look to the outside with regard to whom and what needs help. 

Sometimes, however, it is necessary to look at your organisation’s own structure first of all to ensure that the charity is acting properly and as efficiently as possible.  Charity does, after all, begin at home and an efficient charity will ultimately mean more money for good causes. 

Therefore, our Top Ten charity tips are as follows:

1. Fit for purpose? The world is changing very rapidly around us and it is important to review the purpose of the charity to ensure that it is still appropriate in today’s age. There is provision to allow charities to change or alter their purpose under the OSCR rules and it may be worth considering doing so if you are feeling overly restricted in your charitable purpose or are struggling to find appropriate causes to which donations or grants can be made.

2. Collaboration. Is there an opportunity for your charity and another (either charity or organisation) to work together? Partnership working is becoming very popular, with charities working together to either cut costs or provide a more cohesive product to service users. If you are considering collaborating with another charity remember to consider the ground rules early on. How will the partnership work and be structured? How will funding be divided and overspend/underspend dealt with? Are the cultures compatible? How will disputes be resolved? Collaborations and joint ventures can work very well but like any relationship there can be difficulties. These are much easier to deal with if everyone understands the working parameters at the outset.

3. Tax. Remember to look at the income you are receiving and whether there is any tax deducted from this, possibly at source. Charities are exempt from various taxation regimes and, therefore, it is worth ensuring that you are benefiting from this relief as much as possible. A simple tax return or conversation with your bank may quickly and easily increase the income you receive.

4. Manage investment managers. With the recent introduction of the RDR rules many investment managers are changing their feeing structures. Charities should routinely review the investment managers’ investments, looking not only at the level of fees charged but also at the performance they attain. 

5. What investments are appropriate? Keep a continuous eye on your investments to ensure that they are not contrary to the principles and aims of the charity. This can be done quite easily where there are direct holdings; however, remember the public relations nightmare of the Church of Scotland investing on Wonga! Sometimes it can be very difficult to tell where the underlying investments are if the charity is invested in a collective. Charities should bear this in mind and try to ascertain the investment strategy of the underlying investments. Many investment managers have ethical funds and can positively filter investment opportunities to look for those that meet ethical standards (for example, good human rights records for workers).

6. Legacies. Many charities are lucky enough to receive legacies from wills and this can be a great source of income. While it is right and proper to be grateful for such gifts, please do not feel embarrassed about asking further questions from the people dealing with the estate. Remember that the individual concerned wanted the charity to benefit and it makes sense to ensure that the charity is receiving as much as possible. For example, if shares are sold from within an estate with a gain they may be subject to Capital Gains Tax. If the shares are appointed to the charity as a beneficiary or transferred to them, the charity can avoid paying Capital Gains Tax.  Please do consider asking key questions to ensure that the gift from the deceased can go as far as possible which is, after all, what they would have wanted. 

7. Gift Aid. Acording to the National Audit Office more that £2.3 billion has been lost in unclaimed Gift Aid. HMRC changed the Gift Aid reclaim procedure relatively recently in a bid to simplify things and it can now be done online. Consider reviewing your Gift Aid strategy if it is something that you have discounted in the past.

8. Review of constitution. How is the charity set up and would there be advantages to changing this? For example, if you were a small sports association would it make sense to incorporate to ensure that you can benefit from other grants available to companies. Similarly, would you wish to go forward or pursue interest as a community interest company in order to secure additional funding? It may be worth looking at these options to ensure that the charity can benefit as much as possible from the grants and help that is out there. 

9. Social media. Using this is a great way of raising profile for a charity. It can also be very useful in attracting younger supporters of the charity, volunteers etc. However, any social media channel must be regularly updated. An inactive twitter feed or Facebook page is worse than none at all!

10. Insurance - review your insurance. As a result of recent sexual abuse cases some insurers are lowering their public liability cover. Also, claims have been arising for actions many years ago. Make sure your insurance is on a “claims made” basis, not a “claims occurring” basis. Remember to keep records of who your insurers are, as claims can arise years later.

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