With the finances of numerous charities of various niches under scrutiny in recent months, the highest profile case being the collapse of children’s charity Kids Company in August 2015, the Charity Commission has issued an alert to trustees.
As a leading accountancy practice serving organisations of all shapes and sizes throughout South Wales, Bevan & Buckland is urging charities across the region to review commercial partnerships in light of the recent alert from the independent regulator.
“Extra care must be taken where charities have trading subsidiaries or call upon companies to fundraise in their name as whilst legitimate commercial partnerships provide a vital lifeline, trustees must work hard to protect their charity. The Charity Commission’s recent alert delivers key guidance regarding this, advice that charities must take heed of,” said Alison Vickers, Audit Partner at Bevan & Buckland.
The alert was recently published publicly and has also been sent to 1,700 charities of which the commission is aware of some form of commercial arrangement.
“We understand that commercial operations bring in important income for charities and fund valuable work for beneficiaries. However, it is essential that any arrangements are transparent and do not jeopardise the reputation of the charity. The public expects charities to abide by the values they claim to represent,” added William Shawcross, Chairman of the Charity Commission.
“There are a selection of steps that charities can take to ensure that their commercial partnerships reflect their values and meet the latest legal requirements. The commission recommends reviewing commercial operations for conflicts of interest, properly documenting arrangements and making sure the benefits for both parties are clearly communicated. Failure to meet the expectations set out by the Charity Commission could lead to regulatory action so seeking professional advice on the matter is advisable,” concluded Alison.