Updated coronavirus guidance for the charity sector

The Charity Commission has again updated its coronavirus guidance for charities.

The revised guidance issued on 28 January 2022 updates the guidance that was originally provided in April 2020 and subsequently updated and amended periodically since then.  It provides links to the current coronavirus restrictions and then deals with the following key points:

Meetings. Charities should now be able to gradually revert to face-to-face meetings.  Most charities will have been holding online meetings during the pandemic and have been encouraged by the Charity Commission to ensure their governing document allows such meetings.  Some charities will have considered online meetings to be unviable and it is hoped that any cancelled meetings can now be held in person.  If your charity’s governing document does not allow you to postpone meetings, you should amend the rules to ensure you can hold meetings in a valid way.

The Charity Commission has been very understanding and has taken a proportionate approach where trustees have held remote meetings or cancelled them, and they will continue to do so in the short term.  However, trustees will need to be able to demonstrate that any such decisions have been in the best interests of the charity.  As always, every decision should be properly recorded so that they can be justified if challenged in the future.

Insolvency help. New legislation has helped businesses continue trading through the pandemic and this still applies to charitable companies and (in most cases) CIOs.  Some of the provisions enacted have now come to an end but there are still provisions covering:

1. 1. Moratoriums in respect of breathing space from debt enforcement action;
   2. Temporary restrictions on winding up petitions until 31 March 2022;
   3. Support for viable companies struggling with debt.

Mergers and collaborative working. Many charities have had to reassess how they operate which has meant that some have closed down. In some cases though, collaborating or merging with another charity may make better use of charitable funds and the Commission provides guidance and a checklist on how to do this.

Advice on managing financial difficulties. The Commission has provided detailed guidance on financial resilience, charity reserves and a general tool to help trustees focus. Further advice is available for charities facing financial difficulties because of the pandemic.

Reporting serious incidents to the Charity Commission. This re-emphasises the need for trustees to consider all matters that may need to be reported as a serious incident. The pandemic has resulted in the charity sector facing demanding and changing challenges, which may affect the ability to properly look after beneficiaries.

Trading subsidiaries – financial support from parent charities. The profitability of trading subsidiaries may have been seriously impacted by the pandemic.  Charity trustees need to decide whether their charity can justify temporarily supporting the subsidiary through these difficulties.  Trustees are reminded that they must put charity interest first when making this decision – care must be taken not to throw good money after bad.

Working with a company or business to help with coronavirus. This guidance reminds charities that they can work with non-charitable entities in a number of ways.  These include running a project together, seconding staff, and entering a commercial partnership to raise funds.  The risks arising from such activities are listed, such as how these activities fit your charitable purposes and what new conflicts of interest may arise.

Finally, the guidance provides links to other organisations that have helpful resources for the charity sector.

We encourage all trustees to read this guidance as the pandemic continues. Please do continue to get in touch with your usual Kreston Reeves contact if you encounter any problems as a result of coronavirus or, indeed, for any other reason.