David Porter has started a series of monthly information to all those involved in charities. Here is April 2015's edition.                                                                     

CHARITY CHAT

Edition 1

The aim of Charity Chat is to make Trustees, Directors, Governors, and Committee Members  aware of their obligations and the processes that have to be followed to run the Charity correctly. The references I make are to the Charities Act 2011 (the Act) unless stated to the contrary. If there are matters they wish to raise please let me know.

Charity number

It is easy to forget that all documentation, cheque books, pamphlets etc have to carry the Charity Number. It is a criminal offence for it to be omitted. (See section 33). It makes sense to include the number on all emails and letterheads as well.

Company number

It is also necessary for the Company number to appear on all documentation, because, as with the Charity number, it is a criminal offence not to do so. (See section 82 of the Companies Act 2006). It also makes sense to include that number on all emails and letterheads as well.

Use or otherwise of ‘Limited’

Some charities set up as companies limited by guarantee, are also able to leave Limited off their title. If so, they must make it clear that the Charity is a limited company. (See section 194).

If a Trustee, Director, Governors or Committee Members enter into a contract with a third party, in circumstances where the third party is unaware of the Charity’s status and involvement (or claims to be), they may well find that he or she has to pay for the contracted matter themselves without being entitled to ask the Charity to reimburse them. The Charity may also find that it is barred from taking any proceedings arising out of the contract. It is important that a Trustee, Director, Governor or Committee Member obtains a formal minute from a meeting confirming that he/she or they can act on behalf of the Charity in such circumstances.

Charitable status

A Charity is a separate entity from its members and the Trustees, Directors, Governors and Committee Members, which is why it has to make clear to third parties its status. As a consequence, once funds of any kind, grants, donations or specific gifts, are made to the Charity they belong to the Charity and cannot be influenced by the givers, be they Local Authorities, Companies or individuals. If a Local Authority, Company or individual wants to limit what the Charity can do with the donation they can do so as long as the restrictions are within the terms of the Charity’s objects. A Local Authority cannot create constraints on the way the Charity is run, or require that it can override the votes of the members or the Trustees, Directors, Governors, and Committee Members.