Charity News: In Brief – September 2019

12 Sep 2019

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In the first article in our Charities Briefing – September 2019 publication, we look at the latest news for charities and other not-for-profit organisations.


Charity whistleblowing

The Charity Commission has been upgrading its support for potential whistle blowers over the last six months. Changes made include:

  • Streamlining the process and providing guidance that is easier to follow;
  • Opening an advice line, operated by the whistleblowing charity Protect; and
  • Testing a new service where the Charity Commission will contact each whistleblower directly to discuss their concerns.

The advice line opened on 3 June 2019 and callers to the line can expect to receive confidential advice to help them decide what to do about raising a serious concern about their charity, including whether and how to raise their concerns with the Commission. The line will be piloted for six months.

People wishing to contact the service can call 0800 055 7214.


Charity Commission publishes Oxfam report

The Charity Commission has published a report of its findings after its statutory inquiry into Oxfam concluded. The inquiry was opened in February 2018 after details emerged of the charity’s mishandling of sexual misconduct allegations following its work in Haiti in 2011.

In the report, the Charity Commission criticised Oxfam for its handling of the Haiti incidents and for its management of safeguarding at the charity to date.

The summarised findings of the report were that:

  • Oxfam’s culture and safeguarding procedures repeatedly fell below expected standards;
  • The charity did not always provide a safe environment for its beneficiaries, staff and other charity workers overseas and in the UK;
  • The charity’s approach to reporting to donors and agencies was poor – perhaps out of concern for future funding and relationships; and
  • The charity missed opportunities to address problems for a number of years.

The Charity Commission has issued Oxfam with an official warning and made a regulatory direction requiring trustees to provide regular updates to the Commission about its ongoing progress.
In its conclusions, the report also gives wider lessons for the sector, finishing with the comment that “Charities must never lose sight of why they exist and must demonstrate how their charitable purpose drives everything they do, and most especially how they respond when things go wrong.”

The full report can be found here.


Social Investment Tax Relief

The government has published a call for evidence on the Social Investment Tax Relief (SITR).

The aim of the call is to enable the government to understand how the SITR has been used since its introduction in 2014, including levels of take up and what impact it has had on social enterprises’ access to finance. The SITR has a sunset clause, which will bring the scheme to an end in April 2021, and the call for evidence will help inform a decision about the future of the relief. Take-up of the SITR scheme has been much lower than was anticipated.

The headline tax benefit of SITR is relief from income tax for individuals making eligible investments, whether by way of equity or debt, who can deduct 30% of the cost of their investment from their income tax liability, either for the tax year in which the investment is made or the previous tax year. The ability to invest debt was introduced to enable individuals to invest in social enterprises that are unable to issue shares because of their legal structure.

In addition to 30% income tax relief, individuals can defer capital gains tax (CGT) by investing the proceeds from a chargeable gain in a qualifying social investment. The CGT will become payable when the social investment is sold or redeemed.

Organisations receiving SITR investments must have a defined and regulated social purpose, or be an accredited social impact contractor. Regulated social enterprises must take the form of a community interest company, community benefit society or a charity. The social enterprise must be carrying out a qualifying trade, have fewer than 250 full time-equivalent employees and have gross assets of no more than £15 million immediately before investment is made. Charities may be eligible for SITR where they are carrying out trading activities.

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