19 May 2020

Charities & third sector: getting through lockdown

Charities and third sector organisations haven never been so important in recent times as now. Similarly, legal, governance and risk issues have also rarely been as stark as in the midst of the coronavirus pandemic.

Here’s some topics for trustees, directors and managers to think about in order to navigate the current situation. And the issues we face as people sit under some surprisingly similar topics to those that organisations must address.

Maintaining your purpose

As ever focus on purposes is key to everything an organisation does. It is an important regulatory matter and a vital strategic point that guides everyday decision-making. At a potentially difficult time, maintaining a keen eye on what the organisation is here to do is crucial. Organisational purpose will be a fundamental bedrock to the organisation maintaining focus. And by keeping that focus, the organisation will be better placed to deliver its activities and impact during and after the current pandemic situation.

Do something new

There are lots of reports of individuals and businesses turning their hands to new skills and ways of doing things. Charities and third sector organisations are of course no different. Now, due to necessity or otherwise, organisations might be looking to innovate in what they do and how they do it. Trustees and teams will need to remember to (1) ensure the new work is within a charity’s purposes and, if not, seek OSCR consent to update purposes and (2) notwithstanding, or perhaps even more so because of, the current situation to retain an appropriate risk analysis before starting to do brand new things.

Stay connected

“It’s good to talk” as the late Bob Hoskins famously said in telephone adverts. Communication tech has come on in quite unimaginable ways since then. From Teams to Zoom and a variety of other platforms and tools, getting together to see and hear each other has never been so ubiquitous. That is good. Good and effective communication will be vital.

Trustees and directors will want to make sure use of electronic meetings is in keeping with their organisation’s constitution. This is perhaps particularly the case for AGMs of membership organisations where the legal, formal and logistical aspects of decision-making meetings in lockdown will be most stark.

OSCR has stressed it will act as a proportionate regulator in connection with these matters. Good governance substance over form in the short term where needs must. Trustees will need to engage with members about meeting processes and any deviations from strict compliance of trustee or member meetings will need to be considered. Any non-strict compliance arrangements should be properly recorded to show good governance continues albeit with a degree of irregularity. It might be that some decisions will benefit from ratification at a later date.

Organisations need to think about these legal and practical points to support valid, reasoned, strong and effective decision-making.

Getting on with people

Lockdown might strain some relationships. Robust and well-developed governance structures and processes are great. But sometimes strong governance is rooted in basics. Good manners, understanding and kindness might be the key touchstones for effective meetings and good decision-making. Certainly, they will support the collective responsibility attached to board decisions. In stressful times and with new technology being used, understanding and kindness with meetings underpinned by politeness and warmth could be never more important. For example, all participants at meetings should feel at ease and comfortable with the technology being used.

PE with Joe… keeping fit (for purpose)

What do you do at 9am? Some exercise with Joe Wicks perhaps? Keeping healthy is important. It is part of maintaining purpose and focus talked about above. One thing organisations will need to be doing is understand (for now and the future) how and why their organisation is relevant to society and their beneficiaries. The last thing an organisation can allow to happen at the moment is to lose relevance or any feeling that their work is out of touch. This is a strategic matter for the short term and can help build plans for the longer term. As well as any operational matters that could alter as a result, legal and governance matters also need to keep pace with change.

Aim to keep your routine going

Not having normal routines can be difficult. Is there a danger of then not doing some things or cutting corners? While OSCR has outlined a proportionate and understanding approach to the current situation, it has reminded charities to try and maintain routines for e.g. approving and submitting accounts. And, as with individuals and families, the very act of seeking to maintain a good routine might be powerful and beneficial with positive outcomes.

Getting out of a ‘lockdown’

Restrictions can be tough. We want to know what is permitted and ways ‘out’ of the restrictions. For charities, they will wish to give consideration to how ‘restricted funds’ can be used. Discussions with funders might be needed or advantageous: can any flexibility be permitted on the use of restricted funds? Funders might also wish to actively consider any situations where existing or new funding arrangements should be altered to take account of current circumstances.

There is an OSCR process for approving alterations to certain restricted funds, but it is likely (but not exclusively the case) that using that process will be most appropriate for medium to longer term planned alterations to these funds.

Just giving?

The collective spirit of giving has been epitomised by what ‘Captain Tom’ has inspired and achieved. Giving is hugely generous. The other ‘side’ of some giving endeavours is sometimes forgotten: grant-making.

Whether it is funds that have been raised specifically as a result of the current situation or existing grant-making foundations and bodies, the act of grant-making needs to be in focus. Some organisations will be quickly considering how they might distribute funds. In part that will be to achieve prompt impact as well as to give certainty to donors about how funds will be used. Longer-established grant-makers will no doubt be reviewing their current policies and strategy to ascertain how they might want or need to react to support their areas of focus. As well as the range of government support available to the sector, the grant-making community could have a really tangible effect.

On the giving side, those looking to set up fundraising campaigns need to ensure their efforts are run in compliance with charity and wider benevolent fundraising and collection rules.

Thinking about others

It seems that a positive consequence of the pandemic has been a surge in people thinking how they can help out and work collaboratively with others. For organisations, the best way to survive or thrive at the moment could be to consider how they can best work with others. That might be developing existing partnerships or creating new ones. In some cases, it might result in more formal arrangements being put in place or even charities looking at mergers and other forms of restructuring. These more formal and permanent options require careful legal, financial and other due diligence as well as a sound strategic basis that supports the purposes and interests of the charity or organisation. Trustees and directors need to ask searching questions about how any proposed partnership, merger etc will enhance the ability to achieve the organisation’s aims and mission.

Look to the future

How long it will be until normal (‘new’ or ‘old’) returns is not yet known. But the pandemic and restrictions will ease and come to an end at some point (and we can relax and not attempt to home-school maths anymore!). This fact might be the positive encouragement we need and the beacon to guide robust and effective decision-making and governance at the moment.

For any legal advice on charity law please contact  alaneccles@bkf.co.uk