How to protect your charity - What to do if things go wrong
04 July 2018
The public places a level of trust and confidence in charities and those responsible for running them. This level of trust must be protected and it is extremely important for charity trustees to take prompt and informed action when things go wrong.
How to avoid mistakes
Be informed: Charity trustees should read the free guidance available on the Charity Commission for Northern Ireland’s website https://www.charitycommissionni.org.uk/charity-essentials/view-all-guidance/.
Be prepared: Charities need to continually work to improve and update policies so that a clear and proportionate procedure is set out if something goes wrong.
If something goes wrong
- Act quickly to prevent any further loss or damage
- Have clear communication strategy to mitigate reputational damage
- Review and monitor the issue
- Keep a detailed record
- Report to third parties e.g. PSNI, HMRC, auditor, solicitor, stakeholders
- Engage the relevant experts e.g. solicitor, accountant
- Learn from it – how can you stop it happening again
What can go wrong
- Safeguarding - Safeguarding goes to the heart of what it is to be a charity, to protect the vulnerable and treat others with respect. Several high profile charities have recently been involved in safeguarding failures. The Charity Commission for Northern Ireland recently held an Essential safeguarding good practice seminar attended by over 90 charity representatives. This seminar reinforced that safeguarding is a key responsibility of charity trustees and a key governance issue for charities regardless of size or income but particularly if the organisation is working with vulnerable beneficiaries abroad. We advise that charities should now carry out a thorough review of its safeguarding governance arrangements if it has not already done so in the last 12 months.
- Serious Incident Reporting (SIR) - Charity trustees must report serious incidents to the Charity Commission. The Commission updated its SIR guidance following the publicised safeguarding issues. Trustees are expected to provide full and frank disclosures of all serious incidents including safeguarding matters and any criminal activity.
- GDPR - It is important for charity trustees to recognise that safeguarding responsibilities extend to the protection of personal data held by the charity. All charity trustees should understand his/her responsibilities under GDPR.
- Fraud - A new study published by the Charity Commission for England & Wales revealed that nearly 75% of insider frauds at charities were enabled by excessive trust and lack of challenge from others within the charity.This illustrates the importance of fostering an open and transparent culture in an organisation led by its charity trustees who are ultimately responsible for protecting and ensuring the effective use of charitable resources.
- Cyber security - Cyber security is becoming increasingly important and charities are not immune. The Charity Commission in England & Wales supported the National Cyber Security Centre to publish the first guidance on Cyber Security for charities which is freely available online and especially useful for smaller charities: https://www.ncsc.gov.uk/charity
Role of charity trustees - The charity sector simply does not work without people volunteering to be charity trustees. Trustees can use their skills and experience to make a real difference but this work comes with responsibilities and potential liability. Whilst it is rare for charity trustees to be held personally liable it is essential that charity trustees understand the potential liability and work to protect the charity.
When an issue, incident or complaint arises it is crucial that charity trustees and the senior management team seek specialist legal advice.
Catherine Cooney, Partner with Worthingtons Solicitors advising charities and businesses on a daily basis. Regularly advising on charity trustee duties and liability, good governance, mergers and collaborations, serious incidents, concerns and insolvency. Catherine has been ranked in Chambers for the last two years in Charity Law in Northern Ireland and delivers board training to charity trustees and directors. For any charity law advice please telephone 02890279500 or email email@example.com