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10 Jan 2022 News

New Year’s resolutions for charities

At this time of year many people make New Year’s resolutions of things to do or goals to achieve in the coming year.

Charities are no different with boards often reviewing their strategic aims at the start of their financial year to assess what impact they have had and what their strategy should be for the coming year.

One thing the charity trustees should consider adding to their resolutions is to complete a health check of the charity’s constitution. In the annual return that the Trustees must submit to the Office of the Scottish Charity Regulator (OSCR) charities must declare the last time they looked at and (more importantly) considered the content of their governing documents. Somewhat worryingly one of the options in the multiple choice questions in the return is “we do not know where our governing document is”!

While I would expect most charities to have a good handle on their constitution and their charitable aims, we sometimes find that charities have not reviewed this in sometime and carry on as business as usual. This can lead to mission creep, where best intentions can lead to very good work being done on a charitable purpose however it may not be completely in line with your governing constitution. If the work is required and impactful it may be that the charity wishes to amend their purposes in order to allow them to undertake such work legitimately - an application to OSCR would be required as their consent is required before charitable purposes can be amended. It is important to consider auditing the activities of the charity against the purposes, as if the activities are not directly related it may mean that the trustees are acting out with their powers which could have serious consequences.

Another reason to review the constitution may be to see what administrative procedures are in place and whether (a) the charity is adhering to them; and (b) these are still compliant with new equalities and other rules, for example GDPR. Again, over time good practice and legal requirements can change and it is important to review your constitution and policies to ensure that it accurately reflects what is happening on the ground.

The past two years have been difficult for most organisations and the landscape may look very different now compared to expectations. It is therefore important to go back to basics and look at the charity’s constitution to ensure it is still fit for purpose and helps, rather than hinders, the charity in achieving its goals.

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