Keeping Charities Accountable

Charities are part of all our lives from small groups meeting local needs with few resources to household name charities operating with budgets of millions. They must be worthy of the public's trust and the Club were given a clear overview on how the Charity Commission for Northern Ireland oversees and regulates NI charities by Deputy Chief Commissioner Walter Rader at the Club meeting Monday 23 February.

The Charity Commission for Northern Ireland was established in 2009 and aims to assure the public that charities operating in Northern Ireland can demonstrate their contribution to society and are operating within the law by:

monitoring and regulating the work of charities
ensuring that charities are independent, are run for public benefit and are not giving private advantage and
ensuring that the public has confidence in charities registered with the Commission.

Before 2009 there was very limited charity oversight in NI and the creation of the Commission brings NI more into line with England and Wales, where charity regulation is long standing. Charity Regulation is also now in place in Ireland and Scotland.

As well as establishing and maintaining the public register of charities, which is perhaps the highest profile aspect of the Commission's work at present, the Commission plays a crucial role in the future development of charities, enabling them to meet modern expectations and obligations.

The Commission's additional functions include:

Identifying and investigating apparent misconduct or mismanagement in the administration of charities and taking remedial or protective action as a result.
Annual reporting.
Providing consents for charities to make changes to keep their charity effective
Providing guidance on key areas of running a charity.

Compulsory Charity Registration

All charities across NI must register, regardless of size or income. Compulsory charity registration began for first time in NI in December 2013 and all charities must apply for registration, regardless of size, income or whether or not they have HMRC status. The register of charities, which currently contains the names and details of over 1,000 registered charities, is live on the Commission's website and growing each week.

It is estimated that there are over 7,000 charities across Northern Ireland. Their registration (which involves an online application process) is being managed by the Commission, with organisations being called forward to apply to register in tranches. Registration is expected to take at least three years to complete in full, after which point the Commission will be accepting applications from newly established organisations only.

To prepare for registration, the Commission is urging all charities to check to ensure they are included on the registration list on the Commission website and to then follow the steps outlined. If an organisation is not on the list it should take steps to complete a short, online Expression of Intent form as soon as possible. This list is updated on a monthly basis and highlights where organisations have been registered, where registration has been refused, where an organisation has closed and where we believe we do not have the correct contact details.

There are numerous benefits to registration for a charity.

Those benefits include:

meeting the statutory obligation to register (registration is proof you are the charity is bona fide)
triggering the ability to apply for charitable tax relief for organisations not yet recognised by HMRC (HMRC will not register new organisations for gift aid if the group is not registered with the Commission)
access to funding streams only available to registered charities and
increased public trust and confidence, potentially leading to increased public donations or other support.

Each organisation has three months to submit their application to register from the date they are called forward. The Commission then takes around three to four months to process a registration application from the date they receive all the required information and documentation.

There have been a high number of poor quality applications, or applications submitted without the required documentation. Where appropriate, officers work with charities to advise on how they may wish to consider improving their application in order for it to meet the requirements of charity law. On occasion, this has required applications to be withdrawn and re-submitted.

signpost Charity registration is a legal obligation so must be taken very seriously and the Commission strongly encourages organisations to make the most of the free guidance available (on the Commission's website) to ensure an application is correct from the beginning.

Registration is a one off process, following which Annual Reporting is a vital element in the Commission's ongoing regulatory work and essential in keeping the new register of charities current.

As of 1 April 2014, all charities registered with the Commission fall under the interim reporting arrangements and, by law, must report to the Commission on their first full financial period after this date. Phase two of this process will be the introduction of full accounting and reporting regulations. DSD is expected to consult on the regulations before they commence.

Charity Investigation

standards As well as registration and annual reporting another vital area of its work is the Commission's investigatory role. The Commission seeks to protect charities where there has been alleged serious misconduct or mismanagement in the administration of the charity. The Commission may also intervene if it is necessary, or desirable, to act to protect property or the proper application of charity assets. The Commission can do this through the launch of an investigation aimed at protecting the charity.

Members of the public should contact the Commission if they have a concern about the operation of a charity within Northern Ireland. A confidential Concerns Form is on the Commission website.

Many concerns can be resolved directly with the charity or with another body. The Commission has received almost 400 concerns about charities to date, the majority of which have now been concluded satisfactorily. The Commission regularly produces thematic reports (available on the website), providing confidential case studies and key advice learned from investigations work. The Commission has found that most of the issues identified relate to governance matters and engagement with the charities concerned tends to put things right.

There is an extensive range of information freely available through the Commission's website: www.charitycommissionni.org.uk All the resources are free and are vital in supporting charities in understanding and complying with charity law.