Rules and Regulation | Summer 2018

Rules and Regulations Charity and Not-for-Profit Newsletter | Summer 2018

Charity Sector Could Lose Out on Staff After Brexit

Raffingers Foundation - Our Highlights

How to Improve Your Charity’s Brand

Over two thirds of EU nationals may have to leave the UK if the government decides to apply nonEU laws to them.

Find out about our most recent efforts to raise money for ovarian and pancreatic cancer. Take a look at our photos and upcoming events.

Working on your brand does not have to be an expensive activity.

Follow our easy, yet effective tips for best practice.

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Contents

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Welcome and Partners

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Special Feature Charity Sector Could Lose Out on Staff After Brexit

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Charity Shops and the Business Rate Relief

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Knowledge Hub

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Raffingers Foundation - Our Highlights

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Charity Alert - Watch out for CEO Fraud

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Charity Commission - New Welcome Pack

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Charities SORP: Most Recent Changes

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How to Improve Your Charity’s Brand

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Charities Can Now Convert to a Charitable Incorporated Organisation (CIO)

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Welcome to our SUMMER Newsletter Welcome to the summer edition of our Charity and Not-for-Profit Newsletter. This quarter, we are pleased to bring you all of the latest news and insights from the sector.

Due to Brexit, there remains uncertainty in the charity sector. One of the causes of this uncertainty is the announcement that EU nationals may have to leave the UK, which will ultimately have a detrimental effect on the charity sector. EU nationals account for the majority of volunteers within this sector. If you are worried this change will affect you, read our article on page 4.

At Raffingers we do more than just numbers. We take such a genuine interest in our clients and want to see their organisations improve. To further help charities and not-for-profits we’ve launched a Knowledge Hub. See more on page 5.

Earlier this year we witnessed devastating news on some of the major charities, whereby workers were abusing their position whilst abroad. This lead to a loss of reputation and weakening of their brands.

Brands can be difficult to build, but we have some useful tips on page 10 to help.

As always, if you would like to be featured in our next edition or have any suggestions for topics that you would like to see discussed, please get in touch with Ingrid on ingrid.beya@raffingers.co.uk.

The Partners at Raffingers

Raffingers Partners Gary Inglis Managing Partner gary.inglis@raffingers.co.uk

Andrew Coney Partner andrew.coney@raffingers.co.uk

Lee Manning Partner lee.manning@raffingers.co.uk

Adam Moody Partner adam.moody@raffingers.co.uk

Suda Ratnam Partner suda.ratnam@raffingers.co.uk

Barry Soraff Partner barry.soraff@raffingers.co.uk

Paul Dell Partner paul.dell@raffingers.co.uk

Roy Butcher Partner roy.butcher@raffingers.co.uk

Neill Staff Partner neill.staff@raffingers.co.uk

Your Business Our Passion

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Charity Sector Could Lose Out on Staff After Brexit SPECIAL FEATURE

A report published by the Institute for the Public Policy Research say that over two thirds of EU nationals now working for charities might have to leave if the government decides to extend the non-EU nationals rules to them.

The report says that the number of EU nationals working in the UK charity sector has doubled since 2000. It is estimated some 31,000 EU nationals are working in the UK Charity sector. Certainly, we have seen an increase in EU nationals being employed within the charities that we help. A majority of these individuals are highly qualified, more so than their UK counterparts.

It is also well known that EU nationals do many hours of voluntary work in the sector. The strict immigration controls are bound to create a profound impact on the voluntary workforce. The new controls have not yet been confirmed, but will most likely pertain to skill level and current salary.

Nigel Farage, in his LBC show, recently said that “I never promised it (Brexit) would be a huge success….we will be in control of our destiny”. During the referendum, the effect of Brexit on charities was not one of the key issues. I felt that the charity sector was pretty much ignored by all the main stream media and the key

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individuals who were campaigning for “Yes” and “No” votes.

It is not too late for the government to come up with a plan to alleviate any concerns with EU nationals working in UK after the Brexit. Especially seeing as the third sector is still in dire need of help, volunteers are essential to help continue the good work carried out by charities.

Historically low pay rates within the charity and notfor-profit sector could lead to organisations becoming more competitive (similar to the recruitment industry).

One solution would be to start offering a higher wage and increase employee benefits.

If a new visa system is implemented, charities should be able to sponsor workers. This will also allow them to recruit from a wider pool of qualified candidates.

For more information, please contact: Suda Ratnam 020 3146 1608 suda.ratnam@raffingers.co.uk

Charity Shops and the Business Rate Relief Local authorities in England, Scotland and Wales are refusing to offer full business rate relief to charity shops. Under the Freedom of Information Act (FOIA 2000), the Charity Retail Association requested more than 400 local authorities in the country to respond to a survey and out of the responses, half of them said they do not offer full business rates to any charity shops in their area.

Charity shops receive a mandatory 80% discount on their business rates but local authorities, at their own discretion, offer an additional discount for the remaining 20%. If you have shops in London then you will not get the full rate relief as none of the London boroughs offer this relief. It appears that Scottish local councils seem to be more generous, with over 75% offering the full rate relief.

In addition to paying business rates, charity shops are being charged for waste disposal of donated goods in some areas.

Withdrawal of funding for local services by the government has been blamed for this charge. However, charities are now able to use household waste recycling centres as an alternative to commercial waste transfer stations.

The application of the full business rate relief is a political ball game, with some councils only offering the relief to charities providing “local” support. Our advice is for charities to try and keep the public benefit at local level and have a good relationship with the local council.

Raffingers Launch New Website and Knowledge Hub We are pleased to announce the launch of our new website, which now includes a Knowledge Hub.

www.raffingers.co.uk We are passionate about delivering financial and strategic advice that will help your charity prosper.

Therefore, our Knowledge Hub aims to keep you updated with the latest news and advice.

Complete with videos, reports, articles and blogs,

the Knowledge Hub supports charities at every stage of development, whether you have just registered your charity, or if you are a mature charity that requires strategic advice and support.

Visit www.raffingers.co.uk/knowledge-hub Raffingers’ Knowledge Hub is your destination for all the latest news.

For further support and advice contact lauren. kelly@raffingers.co.uk.

Your Business Our Passion

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Raffingers Foundation Our Highlights

ÂŁ19,000 We want to say thank you for your continued support in helping us to raise money for Pancreatic Cancer Research Fund (PCRF) and Ovarian Cancer Action (OCA).

Raised so far

Since last year we have continued to raise money through smaller initiatives such as our Fantasy Premier League (organised by members of the accounts team), selling pancakes on Shrove Tuesday and the World Cup sweepstake. The support from our team, family, friends and clients are greatly appreciated.

If you would like to get involved or to donate, please visit:

www.raffingers.co.uk/community

You are cordially invited to our

Prince Regent, Chigwell Put on your best outfit and dancing shoes for a fantastic evening. There’ll be dinner, drinks, a live band and great auction prizes.

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Raffingers Foundation in Pictures We just wanted to share some of our best moments from fundraising and acknowledge all the people who have given their time, money and energy into raising money for a great cause.

February 2018

December 2017

Mukesh frying some delicious pancakes for the team!

Everyone dressed to impress for our official Christmas Jumper Day.

December 2017

December 2017

Mira with some of the goodies from our cake sale!

Special moment giving OCA and PCRF their cheques.

The charities that Raffingers Foundation support are very close to our hearts and we hope to continue making more memories and sharing them with you. We would love if you continued to show your support as these are great causes.

Not only have we been able to raise awareness, but we have also helped families who have been affected.

To purchase tickets, sponsor our events, donate items or advertise, contact:

Lauren Kelly, Marketing Manager 020 3146 1695 | lauren.kelly@raffingers.co.uk

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BLOG

Charity AlertWatch Out for CEO Fraud

The Charity commission released a CEO fraud alert in March, sending out warnings in case charities fall victim. CEO fraud is not exclusive to charities. We have seen it happen in all industries, including ours.

Phishing attacks that spoof the boss (CEO) is among the costliest cyber scams reported by consumers and businesses in the previous year.

CEO fraud involves the impersonation of the boss with subsequent requests for the transfer of funds. It begins with the fraudsters initially emailing the CEO for a period of time and familiarising themselves with the CEO’s work pattern. Once they know that that the CEO is on holiday the fraudsters send emails to key managers to transfer funds to a particular account. In addition, it is also requested that the CEO should not be contacted as he or she will be travelling for next few days.

I recently received an email from my Managing Partner requesting for funds to be transferred to an account as he was on holiday. The fraudster didn’t know that the Managing Partner was in fact on holiday the week prior to me receiving the email!

The Charity Commission’s Protection and Prevention advice: • Review internal procedures regarding how transactions are requested and approved, especially those in relation to verifying validity • Email addresses can be spoofed to appear as though an email is from someone you know. Check email addresses and telephone numbers when transactions

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are requested. If in doubt, request clarification from an alternatively sourced email address/phone number • If an email is unexpected or unusual, then don’t click on the links or open the attachments • Do not be afraid to question details when being tasked to transfer money at short notice • Sensitive information you post publicly, or dispose of incorrectly, can be used by fraudsters to perpetrate fraud against you. The more information they have about you, the more convincingly they can purport to be one of your legitimate suppliers or employees.

Always shred confidential documents before throwing them away If you are worried about cybercrime and fraud, you should visit the National Fraud and Cybercrime Reporting Centre’s website. The website is packed with prevention advice and what you need to do if you fall victim to fraud.

If cyber fraud often reoccurs within your charity, there is a tool available online to also report multiple crimes simultaneously on the Action Fraud website. This tool will enable your charity to select the type of fraud that has taken place directly. You can also copy details from one report to another.

For more information, please contact: Neill Staff 020 3146 1605 neill.staff@raffingers.co.uk

Charity Commission New Welcome Pack

Charities SORP: Most Recent Changes

The Charity Commission has started to send out a new Welcome Pack for every new trustee. The pack contains eight pages of useful information. There is also a personal welcome page from Helen Stephenson, the CEO of Charity Commission.

The Statement of Recommended Practice (SORP) became applicable to charities from January 2015. The charities SORP falls in line with the Financial Reporting Standards (FRS 102), and although it was not introduced long ago, it has now been revised. Following the changes to the Accounting Standard in 2016 and additional changes in 2017, the Commission deemed it necessary to amend the Charities SORP. Surprise, surprise! The Charity Commission started a six-week consultation process and focussed on around 20 amendments to SORP.

Pages two to four of the pack contain eight key points for trustees to tick-off. These eight key points are useful if you are new to being a trustee and you’re not 100% sure of what to expect.

The key points outline the following: • Getting to know your charity (its purpose, governing rules, operations) • Expecting to do things soon (attend meetings, make decisions quick) • Getting to know your six main trustee duties (be clear on duties and public benefit) • Sending financial documents to the Charity Commission; keeping register details up-todate, filing accounts and your annual return • How the Charity Commission can help you as a trustee • What to do and who to contact if things go wrong We think this initiative is good and it is written in simple, easy to understand English. Speaking of languages, it is not clear if this will be available in any other languages but we will keep checking and issue an update when there are any changes.

The last pages of the Welcome Pack contain a list of organisations that can help trustees, this is a feature we like as well! It includes organisations such as the Charity Finance Group (CFG) which advocates best practice for finance management within the charity sector. There’s also the Small Charities Coalition (SCC) which helps charities with a turnover with less than £1million.

The key changes are: • Letting out investment property to another entity in the group, a separate accounting policy has been recommended for this • Introduction of a requirement for a net debt reconciliation as a note to the statement of cash flows • Payments by subsidiaries to their parent charity which qualifies for Gift Aid; the accounting treatment of these payments is up for consultation • The transfer of activities to a subsidiary undertaking as an example of a charity reconstruction that may be accounted for as a merger There are a number of other changes which have been proposed but the above are what we consider to be the key areas. We do not think that this will have a significant impact on the majority of larger charities.

If you are Scottish-based charity, you will be part of this consultation as well.

The consultation closed on 4 April 2018 and the changes will come into effect for accounting periods beginning on or after 1 January 2019.

You can download a copy of the pack on the Charity Commission’s website.

For more information, contact: Barry Soraff 020 3146 1668 barry.soraff@raffingers.co.uk

For more information, please contact: Roy Butcher 020 3146 1607 roy.butcher@raffingers.co.uk

Your Business Our Passion

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How to Improve Your Charity’s Brand There are over 165,000 charities that are registered in the U.K. That means that there are a lot of charities who could potentially be your competition.

So, what can you do to make your charity stand out? More importantly, how do you improve your charity’s brand?

We have created a checklist to help you improve your charity’s reputation. Follow our simple yet effective steps and watch your charity’s brand improve this year.

Contrary to popular belief, branding is not an expensive exercise. We will demonstrate with our tips how easy it is to implement these changes and the difference it will make.

In our checklist we have covered getting to know your audience better, forming successful partnerships, the importance of a name and logo, building trust within the community, how to use social media to boost your campaigns and the power of using great images.

1. Know your audience

4. Build trust

Do you truly know your audience or what makes them want to become donors in the first place?

Carry out research on existing donors, create a customer persona and tailor future campaigns towards them.

Trust can be a key issue amongst donors, so it is very important to be transparent and open about how their donations are being allocated. Devise a policy to demonstrate that you are an open organisation.

2. Create partnerships

5. Social Media

There are plenty of charities that support similar causes, so why not join forces instead of seeing those charities as your competitors?

You can benefit from economies of scale, extra resources and knowledge.

Social media is free to use and powerful enough to make your campaigns go viral. Platforms like Facebook have also developed a ‘Donate’ button to encourage giving.

3. Name and logo

6. Great photos

Does your name send a clear message of what your charity stands for? And is your logo current? Make sure to revise your branding assets in case they are outdated and do not appeal to your target audience.

A picture says a thousand words!

Capturing great photographs are a good way to showcase your charity and raise awareness for your cause. Photos are personal and can help donors identify with your brand more.

For advice on any of the items highlighted, contact:

Lee Manning 020 3146 1604 | lee.manning@raffingers.co.uk

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Charities Can Now Convert to a Charitable Incorporated Organisation (CIO) Legislation to allow charitable companies to quickly convert into charitable incorporated organisations was passed in the parliament in November 2017.

CIOs were introduced as a new legal structure for charities back in 2013. There are more than 13,000 CIOs registered since this date.

Do not send your applications too early if your charity’s income doesn’t fall into a certain bracket. The Charity Commission will not accept applications before your charity’s income bracket date. Phasing application for conversion make the application process manageable for the Charity Commission.

Previously, charities would have had to close their current organisation before they can commence operating as a CIO. This structure will allow charities to enter into contracts as corporate entities with limited liability for trustees and members. This may mean that it will soon become easier for charities to trade whilst still maintaining a charitable status.

It isn’t known how many of the well-established charities will choose to convert, however we think this structure will be good for smaller charities and community interest companies. All charitable incorporated organisations (CIOs) will be included in the Registrars’ Business Names Index (maintained by Companies House) from 1 January 2018. The reason given for this that it will help protect CIO names. Charities that are incorporated as companies already appear on this index.

The new legislation passed in November will allow community interest companies and charities with company structures to quickly convert into CIOs from 1 January 2018. However, this will be phased in as follows: Date

Annual Income

1 January 2018

Less than £12,500

1 March 2018

Between £12,500 and £25,000

1 May 2018

Between £25,000 and £100,000

1 June 2018

Between £100,000 and £250,000

1 July 2018

Between £250,000 and £500,000

1 August 2018

Greater than £500,000

One of the advantages of this quick conversion is that the charity will keep its existing charity number. We hope that the banks will not change the charity’s bank account number.

Another advantage of a charity becoming a CIO is that if they gross less than £250,000 in any financial year, they may use the simpler receipts and payments basis to prepare its accounts.

Some disadvantages to be aware of are the long registration times with the Charity Commission, the process can take as long as 45 days to become a CIO. Also, as the structure is relatively new, there may be issues in understanding permissions and constraints.

Converting to a CIO will allow charities to trade and enter corporate contracts whilst maintaining a charitable status.

Your Business Our Passion

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