Charity commission: Alert for charities

- The importance of transparent and accountable governance:

On 25 June the charity commission published an alert for leaders of large or complex, service-providing charities.  Whilst it is aimed at these specific charities we recommend that all VCSE organisations use the alert guidance to manage the dangers of a charity growing too quickly, or pursuing funding to take on complex projects, maybe as a response to the covid-19 pandemic,  without putting in place effective governance and oversight to manage risks.

In the letter from the charity commission’s CEO Helen Stephenson, she explains that in the last few months we have seen, more than ever, how communities rely on the work of charities, particularly those providing vital services. This has demonstrated, beyond doubt, that the will of the public to do good is not dimmed and that, even when we are in lockdown, people’s desire to help and support each other is as strong as ever.  However, that we can’t take that public support for granted.

The sector’s reputation can be damaged where failings have resulted in serious incidents which have put people at risk of harm and exposed the charities in question to financial and reputational damage. The most recent of these is outlined in the Charity Commission’s inquiry report (published on 25 June 2020) into the Royal National Institute of Blind People (RNIB)

Helen’s speech can be found here.

The alert details states “whilst your charity may not have faced issues in how it is governed and managed, it is still crucial that you are aware of the risks which can result from governance or management failures. We want to help you mitigate these risks, and so are offering the following advice to help you avoid potential harm to people or to your charity’s finances or reputation, which may undermine trust in the whole sector.

Identifying and mitigating these risks is even more important for charities facing economic difficulties as a result of the Coronavirus pandemic, and which may be considering restructuring or merging.”

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