Having welcomed in the new year and with most now back to work, many businesses and organisations will be reflecting on 2017 and wondering what 2018 will bring.
Looking back on our pick of the news stories affecting charities and the third sector in 2017, we covered everything from gender pay gap reporting to the back-pay bill and from cyber-attacks to filing annual documents, plus a whole lot more.
So, with that in mind, we consider just what charities might expect from the next 12 months:
Changes to charities Annual Returns
Following a consultation with charities during Autumn of last year, The Charity Commission has made several changes to the content of the Annual Return for 2018 (AR18) which must be completed by any charity with an annual income exceeding £10,000.
AR18 applies to those with financial years ending from 1 January 2018 and charities are given ten months, from the end of their financial year, to complete the return.
The Commission has said that the changes will bring about an easier user experience and will be far more proportionate, in relation to the size of the charity, than has previously been the case.
It has decided not to ask charities for the following information:
- whether or not they are claiming rate relief for the premises that they use
- the amount of gift aid they have claimed (charities are already required to declare whether they are registered for gift aid, and the Commission will ask charities to provide their HMRC number)
Though this information will still be required for regulatory purposes The Commission has recognised that it may be obtained from other sources in the first instance.
AR18 will, however, ask charities to provide information about the total remuneration received by staff members, including salary, bonuses, pension contributions, private health care and other benefits in kind, some of which will be made public thereafter.
The Commission will also require charities to provide information about their highest paid employee, but this will not be made public.
The Commission has published the formal regulations underpinning the AR18 and is currently developing the digital service that will support it. It expects to be able to make the return available to charities within the next four months.
More information can be found on the Government website here.
Funding for charities and The Commission
The wider economy, as always, will continue to impact upon charities and not-for-profit organisations. The effects of enduring pressure on public finances are likely to have sizeable ramifications for charities who principally rely on grants and contracts provided by the Government.
Not only this but, as the cost of living increases for all of us and households up and down the country begin to tighten the purse strings, charities may find raising funds a painstaking task as people’s disposable income declines.
Looking ahead to a post-Brexit Britain, the first Budget following the election did very little to inspire confidence within the sector. Charities had hoped for more in the way of strategic interventions, encouragement and support from the Government but, instead, were left feeling largely ignored and still very much in limbo.
Even the Charity Commission has very little lee-way, as its budget remains frozen at £20.3m until 2020. Discussions with the Government have yielded a few conceivable solutions, one of which is to ask the largest 2,000 charities to contribute a total of around £7m to the pot, but nothing has been set in stone as yet.
As a result, it is likely that charities will be consulted on this subject sometime in 2018.
Charities must comply with GDPR
On the 25 May 2018, GDPR (General Data Protection Regulation) takes effect, introducing a new set of rules which must be observed by any business or organisation that processes data.
As a result of abiding by the new regulations, charities are likely to see their mailing lists shrink considerably and may struggle thereafter to reach and communicate with target audiences on the same scale as before.
Many may be forced to consider more frequent, small-scale, initiatives as well as how they can more effectively utilise other promotional channels and improve their presence across the board.
Complying with GDPR is also likely to bear a significant cost for the third sector, with the need for comprehensive staff training and participation from those running the organisation. Regardless, it is extremely important that charities remain mindful of their obligations under GDPR and make every effort to get it right.
Transparency is crucial when it comes to the success of the sector and considering the volume of data that charities process daily, it simply cannot afford any breaches of these regulations.
The Information Commissioner’s Office (ICO) has published an FAQ guide specifically for charities which delivers guidance on 12 different areas associated with the new rules. Other organisations such as The Institute of Fundraising and the Small Charities Coalition have also released toolkits directed at charities.
The ‘back-pay bill’ and sleeping on the job
This year is likely to see the crisis surrounding sleep-in arrangements and the social care sectors back-pay bill continue.
Previously those social care workers providing overnight care were entitled to a flat-rate allowance but, in October 2017, the Government clarified its guidance on how these workers should be paid.
It insisted that those employed to work overnight should now be paid the minimum wage for the entirety of their shift and launched a voluntary scheme, the Social Care Compliance Scheme (SCCS), to help social care providers identify and settle their liabilities.
Providers have been given until 31 March 2019 to work out how much they owe to workers and to pay the arrears. This decision caused outrage throughout the sector with many charities facing spiralling costs and even insolvency as a result.
In 2018, concerns about the long-term stability of the sector are likely to continue to make headlines and there may well be some discussion (all be it, heated) about how a liability worth hundreds of thousands of pounds can be subsidised, if indeed at all.
Here at George Hay, our specialist charities team fully understand the distinct challenges that the charity sector has faced and continues to face. From filling in documents and filing returns to understanding how best to utilise financial support and from appraising and strengthening governance procedures to providing ideas for diversification, we can help.
We understand that your organisation has specific financial objectives, circumstances, priorities and requirements. Our team of experts will work with you to understand your needs and help you to manage your enterprise more effectively. To find out more, please contact us on 01480 426500 or fill in one of our online enquiry forms here.