Charlie Cattell Consultancy

10/02/2025

Small Charities Encouraged to Capitalise on Fraud Reimbursement Scheme

In a significant development for the charity sector, small charities that have fallen victim to fraud are now being urged to take advantage of a newly implemented scheme designed to help them recover lost funds.

This initiative, launched by the Payments Systems Regulator (PSR), is a crucial lifeline for smaller charities that may not have the resources or knowledge to navigate the complexities of fraud recovery.

The scheme, which has been in effect since 7 October, is particularly aimed at charities with an annual income of under £1 million, offering them the opportunity to reclaim up to £85,000 in losses due to authorised push payment fraud (APP).

Read on for more details:

Small charities that have fallen victim to fraud are encouraged to recover lost funds via their banks and other avenues under the authorised push payment fraud (APP) reimbursement scheme that was implemented on 7 October.

The initiative, launched by the Payments Systems Regulator (PSR), requires banks and other payment service providers to compensate victims of APP fraud conducted via the faster payments system and Clearing House Automated Payment System, with reimbursements of up to £85,000.

This applies to charities with an annual income of under £1 million that meet the definition of a charity as outlined in the Charities Act 2011, the Charities and Trustee Investment (Scotland) Act 2005, or the Charities Act (Northern Ireland) 2008.

According to Martin Richardson, senior partner at National Fraud Helpline solicitors, the mandatory reimbursement scheme for fraud victims covers over 95% of UK charities, yet very few are aware of it.

Although the PSR scheme only covers up to £85,000 of lost funds, the Financial Ombudsman Service can order banks to pay up to £430,000. For this reason, charities must recognise that assistance is available if they become victims of fraud.

Richardson stated that “every organisation is vulnerable to scams, especially as fraudsters become increasingly sophisticated and exploit technological advancements.”

The launch of the authorised push payment fraud (APP) reimbursement scheme is a significant milestone for small charities, providing a crucial safeguard against the increasing prevalence of sophisticated fraud.

Awareness and accessibility are key to ensuring that these organisations can benefit from the financial protection this initiative provides.

As the charity sector continues to navigate the complexities of fraud recovery, banks and regulatory bodies like the Payments Systems Regulator (PSR) must take proactive steps to highlight the availability of such schemes.

For charities, staying informed and prepared is not just about financial security—it's about safeguarding the very missions they aim to serve.

10/10/2024

Public Trust in Charities Reaches a Decade-High, New Research Reveals

The Charity Commission published groundbreaking research in August of this year indicating that public trust in charities has reached its highest level since 2014.
According to the study, 58% of people have "high" trust in charities (scoring them 7 out of 10 or higher), placing them among the most trusted groups in society, second only to doctors.
The research highlights that information about how money is spent by a charity is the most crucial factor for most people, followed closely by knowing that the charity achieves its purpose, makes a difference, and operates to high ethical standards.
With the financial landscape becoming ever more challenging, the data also reveals a growing reliance on charities for support, while the percentage of people donating to charities has declined.
In 2021, 47% of people reported donating money or goods or raising funds for charity, compared to 62% in 2020. Conversely, the number of people receiving charitable services, such as financial help, food, or medical support, has increased, from 3% in 2020 to 9% in 2021.
Awareness of the Charity Commission is associated with higher trust in charities, with those familiar with the regulator being more likely to report high trust (63% vs. 52%). Approximately half of the respondents are aware of the Charity Commission, and 19% have a good understanding of it.
The Charity Commission also investigated charity trustees' attitudes towards their roles in a related survey. The findings reveal that most trustees share the public's high expectations of conduct in charities and are confident of their performance in this regard. However, the research also highlights areas where trustees are less clear on their responsibilities, such as avoiding making decisions based on personal views or dealing with conflicts of interest. They are also less confident about overseeing charity finances.
Charity Commission Chief Executive, David Holdsworth, stated: "These findings are encouraging, demonstrating that charities collectively are once again firmly trusted by the public, making a visible, essential difference locally, nationally, and globally. However, there is no room for complacency, for charities or for us as regulators."
As the charity sector continues to navigate challenging financial times, it is essential for organisations to maintain transparency and demonstrate how they fulfil their mission, ensuring that every penny donated makes a positive difference.

09/10/2024

Decision-making for charity trustees (CC27) - "It's Your Decision"

On the 23rd of September, The Charity Commission refreshed its guidance, CC27.
The updated guidance note ‘CC27’ provides advice on measures trustees can implement to upgrade their charity’s finances and safeguard against potential economic challenges, and the appropriate steps that should be taken if their charity faces insolvency.
The revised CC27 emphasises the importance of trustees acting within their legal powers, prioritising the charity's best interests, managing conflicts of interest, and documenting important decisions. By following these key principles, trustees can ensure compliance with their legal duties and maintain responsible governance. It will not only protect the charity's reputation but also help to achieve its mission and objectives more effectively.

15/06/2024

To refresh the Charity Governance Code for the first time since 2020, a public consultation has been launched, inviting charities to give their feedback. The code, which supports charities and their trustees in developing high governance standards is primarily based on the Charity Commission's guidance.
Charities across England and Wales, whether they use the code or not, are encouraged to participate in the survey, which asks if they would be "willing to pay a small fee, based on your organization's size, to use the code." The survey deadline is set for August 11th, and the code's steering group is seeking input on securing long-term funding, exploring potential corporate partnerships, and other funding suggestions.
Radojka Miljevic, chair of the Charity Governance Code steering group, emphasized the importance of consultation in ensuring the code remains relevant and practical for organizations of all sizes.
https://lnkd.in/dtDATZ_j

07/08/2023

Important Changes to Charity Commission Regulations:

Following the enactment of the Charities Act 2022, certain significant revisions to charity law in England & Wales came into effect in August 2023. These modifications are intended to streamline and update the regulatory framework for charities, allowing them to operate more effectively and efficiently in a changing social and economic environment.
The following are some of the significant modifications made under the new regulations:
• Charity Commission Annual Returns Regulations 2022: These regulations revise the annual return that charities are required to file with the Commission, detailing their operations, finances, governance, and adherence to regulatory standards. Under the new rules, charities will have more leeway in how they report their results and will be able to fill out a shorter, more streamlined online form. The reporting burden for smaller charities with an annual income of less than £10,000 will also be reduced as a result of the new rules; such charities will only be required to complete a basic annual return once every three years.
https://www.gov.uk/government/collections/charity-commission-regulations
• The Charities (Total Return) (Amendment) Regulations 2023: These regulations update the existing restrictions on total return investment, which makes it possible for charitable organisations that have permanent endowment funds to pursue a more flexible approach to spending and investing their capital and income.
Social investment, which is defined as an investment that directly advances a charity's aims while earning a financial return, is now covered by these regulations as well. https://www.gov.uk/government/publications/charity-commission-regulations-total-return/the-charities-total-return-amendment-regulations-2023
The new regulations allow charities to use their permanent endowment funds to make social investments even if these are projected to have a negative or uncertain financial return so long as the loss is expected to be compensated by gains elsewhere, as part of the total return from the relevant fund,. When making social investments, trustees must also consider their duty to act in the best interests of the charity.
https://www.gov.uk/guidance/charities-act-2022-guidance-for-charities
• Charities Act 2022: Charity Commission regulations will be amended by this Act in a number of other ways, including by enabling charities to use electronic means of communication for meetings and notices and clarifying the Commission's authority to issue official warnings and directions. Charities will also be permitted to spend from permanent endowment funds with a smaller value than £25,000 without seeking Commission approval.
These adjustments take into account the changing demands and objectives of the social economy sector as well as those of the general public and stakeholders. They are intended to provide charities with more freedom and autonomy to pursue their social and environmental objectives while simultaneously increasing the transparency, accountability, and effectiveness of charities.
https://www.charliecattell.net/
Specialists & Consultants in legal structures and governance

09/06/2022

A BRIEF RECAP – TRUSTEES AND ETHICAL INVESTMENT

Good governance is critical to the success of a charity. It permits and supports a charity's adherence to the law and applicable rules. It also fosters a culture in which everything is geared toward achieving the charity's objective. That's why we like to stay up-to-date with governance developments and keep you up to speed, too.

In a major decision issued at the end of April, the High Court ruled that charity trustees can opt to invest ethically. The trustees of the Ashden Trust and the Mark Leonard Trust brought the action, asking the court for explicit advice on making investment decisions that prioritise environmental safeguards, even if this were to reduce the potential return on the investment.

The trustees argued that existing Charity Commission guidance, which focuses on optimising return on investment, did not make it clear if the decision was within their authority as trustees. In particular, there was concern that their decision to invest solely in organisations that are aligned with the goals of the 2016 Paris Climate Agreement would result in financial loss and hence violate the Commission’s guidance.

The High Court decision, however, confirms that the guideline does not prevent trustees from investing in ways that they believe are ethical, as long as the transaction furthers the charity's aims. The High Court believes the trustees will have fulfilled their duty if they evaluate all options and establish a reasonable and balanced investment programme. The Charity Commission will now issue new guidance in light of this ruling.

https://www.charliecattell.net/

04/05/2022

'Better Business Day' Calls for Amendment to Section 172 of the Companies Act

Campaigners for the 'Better Business Act', alongside retail expert and TV personality Mary Portas, recently led a mass lobbying outside the Houses of Parliament, demanding new legislation to ban company executives from seeking profit at the expense of their employees, communities, and the environment. Keir Starmer, the Labour Party's leader, was among 50 or more MPs who expressed an interest.

The initiative 'Better Business Day' was joined by over 1,000 businesses urging the UK parliament to put an end to a business culture that prioritises the relentless pursuit of shareholder profits above all else. The bill would amend Section 172 of the Companies Act, which states that a company's default purpose is to benefit its shareholders. Instead, the bill would require company directors to promote the interests of workers, customers, communities, and the environment in addition to making a profit. Campaigners want the Better Business Act to be included in the Queen's Speech on May 10th, which will set out the UK government's legislative strategy for the following year.

High street champion Mary Portas and other members of the coalition believe the event resulted in a positive outcome with Roger Barker, head of policy and corporate governance at the Institute of Directors (a business leaders' association), stating that “the Better Business Act was both indicative of what many companies were already doing and the expectations that modern society has for business.” He added: “The legal obligations of directors must be supportive of ethical corporate behaviour rather than an impediment to it.”

For more information On the Better Business Act: https://betterbusinessact.org/

Sign up: https://betterbusinessact.org/act-now/

Charlie Cattell Consultancy: https://www.charliecattell.net/

25/02/2022

The Charities Bill and the Dormant Assets Bill are Set to Become Law - 24th February 2022

Two successive bills aimed at reducing charity bureaucracy and unlocking over £900 million in dormant assets funding have been passed by parliament and are now set to be ratified:

The Charities Bill aims to empower trustees and put in place long-awaited measures aimed at reducing the amount of red tape faced by charities. Additionally, it will allow them to focus on important things such as delivering on their purpose for the public benefit. The bill will:

- make it easier for charities to amend their governing documents and reutilise funds from failed fundraising campaigns
- provide trustees with tools to make better use of their permanent endowment
- remove administrative burdens associated with land transactions and mergers
- simplify a number of processes and promote consistency in the law by implementing the majority of the recommendations set out in the 'Law Commission’s Technical Issues in Charity Law' report

The Dormant Assets Bill, which has unlocked more than £800m from unused bank and building society accounts over the past decade, with £425m of that enabling the creation of the social investment wholesaler Big Society Capital will:

- release an additional £880m of dormant assets for use by good causes
- allow dormant assets from the insurance, pensions, investment and wealth management and securities sectors to be included in the scheme.
- benefit from the additional funds, with a consultation set to be launched on how the funds for England should be used.
- include supporting young people, helping people who are struggling to manage money, growing the social investment market and addressing long-term funding to improve social infrastructure through community wealth funds.
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25/12/2021

07/10/2021

ENSURING CHARITIES ‘DO IT PROPERLY’ - Maintaining Standards in the Charity Sector

This latest report produced by Community Matters looks at some of the implications of the withdrawal of the Charity Commission endorsement scheme some years ago.

The report shows that in the last 5 years serious incident reports reported to the Charity Commission have nearly tripled and also shows that early identification of issues and problems reduce the significance of the consequences.

The report also shows that there is clear evidence of the benefits of quality assurance in the charitable and not for the profit sector.

You can get copies by going to https://mailchi.mp/15de510cff2e/quality-report .