Charities that are connected with non-charitable organisations: maintaining your charity’s separation and independence
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We would like to thank everyone who took part in this consultation. Your feedback will be used to inform new guidance, which will be published later this year (2018).
Original consultation
Consultation description
The Commission is consulting on draft guidance for charities on their relationships with connected non-charitable organisations. The draft guidance consists of:
- detailed guidance
- at a glance summary
- a checklist that charities can use
Charities can work with other charitable and non-charitable organisations to further their purposes and make a difference for their beneficiaries. Setting up or maintaining a close relationship with a connected non-charitable organisation can provide benefits to charities, but it can also expose charities to additional and sometimes significant risks.
The Commission has prepared this draft guidance to help trustees understand the risks and challenges that such relationships can bring and by setting out what we expect trustees to do to deal with them.
We welcome feedback, during the consultation, on how we can further improve the usability and effectiveness of this draft.
To access the draft guidance, scroll down to the bottom of this page.
Why we are developing guidance about this issue
Although the legal framework and principles in the draft guidance are not new and are reflected in other pieces of Commission guidance, there is no single piece of guidance which draws together the full range of issues that trustees may face when managing, or registering, a charity that has a close connection with a non-charitable organisation.
Through our engagement with charities we have seen the difficulties that can arise and the consequences trustees may face. For example, we have published a number of case reports in the last 2 years which highlight the range and complexity of issues. We have reported on:
- a charity funding research by a non-charitable organisation with political aims
- significant commercial benefit to a connected organisation resulting from the charity’s operational activity
- the importance of distinguishing whether a service is provided by a charity to help its beneficiaries, or by its trading subsidiary to raise money for the charity
The draft guidance is intended to help trustees manage this issue confidently in line with their duties and good practice. It also seeks to reduce the number of cases that arise where a lack of awareness on the part of trustees leads to problems.
We want the guidance to help trustees properly manage these relationships and, as a consequence, avoid regulatory engagement or investigation.
Where the Commission needs to investigate, we will use the guidance, when finalised, to hold to account those trustees who fail to comply with their legal duties and, as a result, expose their charity to significant risks or consequences.
Preparing the draft guidance
We have drawn on our experience of cases where difficulties have arisen where having a connected non-charitable organisation is a factor. We have also discussed the issues with a group of legal advisers and with HMRC.
We are now consulting externally on how well the draft guidance:
- covers all the relevant areas
- clearly describes the relevant law
- avoids unintended consequences for charities
- outlines the issues and risks in a way that trustees find easy to understand and helpful; and which enables them to put the guidance into practice
Is the draft guidance relevant to you?
This guidance is for charities that have connections with one or more non-charitable organisation; that is, where the relationship has been created or is being maintained through deliberately having one or more of the following:
- the same people (trustees/directors) involved at the charity and the non-charitable organisation
- shared names, branding, websites, and/or premises
- regular funding flowing from one organisation to the other
- shared aims or purposes
- shared staff
It is not aimed at charities that work together with other organisations to which they have no connection.
Who do we want to hear from?
We particularly want to hear from charities that are connected with non-charitable organisations and from non-charitable organisations which are linked to charities or are considering establishing a charity.
We also welcome responses from anyone with an interest in charities.
How to respond to this consultation
Respond using the online survey link at the bottom of this page.
If you would like to see a copy of the survey questions beforehand, we have included a PDF document further down the page.
There will be other opportunities for giving us your feedback. We will publish details of these through the consultation period but they may include:
- discussions through roundtable events and other meetings
- a Twitter discussion on aspects of the draft guidance, follow the Commission on Twitter
What happens next?
We will consider all of the responses we receive by the end of the consultation period and these will help us to develop the draft for publication. We will publish an analysis of the responses within 3 months of the end of the consultation.
Data Protection
Information you provide to us in your response to the consultation (including personal information) may be published or disclosed in accordance with access to information legislation. This is primarily set out in the Freedom of Information Act 2000 (FOIA), Data Protection Act 1998 and Environmental Information Regulations 2004.
We will use the personal information you provide to contact you, if we need to, for example to obtain clarification about the comments and feedback you have given. We may wish to explore your comments further, so that we understand the issues you are raising or suggestions you have made. We will also use the information to identify themes, for example identify whether charities, or particular types of charities, have raised similar issues.
We may use extracts from the comments which we receive in other communications such as the report which we will prepare on the consultation.
We do not plan to publish or disclose personal information provided. Please be aware that the Commission can only treat information in your response as confidential if this is consistent with the law. There is a statutory Code of Practice under the FOIA which public authorities must comply with. This sets out how confidential information must be dealt with. The Commission cannot give assurances that information you provide will be kept confidential, but it will take into account any representations that you make.
If you object to any information in your consultation response (including your personal details) being published, please say so by emailing us using the consultation email address: guidanceandpractice@charitycommission.gov.uk. Please explain why you think any information should be confidential. This will help the Commission to decide whether, in accordance with the relevant legislation, there are grounds for not publishing it.
We are using SmartSurvey to collect responses to this consultation, including personal information, on our behalf. You may wish to read their privacy policy
Documents
Updates to this page
Last updated 8 August 2018 + show all updates
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Published the outcome of the consultation.
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First published.