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Richard King

Posted 29 September 2015
by Richard King

Charities newsletter – Autumn 2015

Trustee oversight
Trustees of smaller charities often find it difficult to see ‘the bigger picture’ because they are busy working hard at the day to day running of the charity for the people it sets out to help.  And the converse is true of larger charities where Trustees find it problematic having a clear understanding of operational matters and rely on staff and volunteers to be doing the right thing.
The stories coming out of the recent collapse of Kids Company talked of staff members handing out cash in brown envelopes to children in immediate need, but Trustees were seemingly unaware of such practices, despite being those ultimately responsible for the charity’s operations.  For smaller charities and their trustees, especially those which are unincorporated, difficulties often arise when an organisation relies heavily on one or two people for all tasks and information is not shared.
Finding the happy medium is hard.  Clear lines of communication and reporting are vital.  Trustees do not need to know, and indeed normally should not know, the minutiae of operational matters, but regular reports to the board, and clear procedures to be followed when staff and volunteers are alerted to anything out of the ordinary, are key.
Trustees should:

  • have the opportunity to review the reports provided;
  • assess whether what the charity is delivering is in accordance with their strategy and aims;
  • and be in a position to challenge staff and volunteers who act on the charity’s behalf.

Do you know your donors?
The case of Olive Cooke is a stark example of how charities can not only fall foul of the law but suffer terrible damage to their reputations.  She sadly took her own life earlier in the year and had indicated to her family and friends prior to her death she received on average 180 letters a month from charities and other organisations asking for monetary donations and had in the region of 27 monthly direct debits for charitable giving,.  Recent reports show that Mrs Cooke’s case has damaged the public perception of charities and nearly half of those people questioned said that they are now less likely to share their personal information with charities and fundraising organisations.
In another case, an 87-year old man with dementia lost large sums to scams after his personal details were sold by a charity because, more than 20 years ago, he had failed to tick a box to prevent it. Some charities now find themselves under investigation by the Information Commissioner concerning their compliance with the Data Protection and Privacy and Electronic Communications legislation and most particularly whether the information provided to donors regarding consent was sufficiently clear and whether they were retaining people’s personal data for too long.
Charities should consider carefully not only their policies but their marketing strategy to ensure that they are acting within the law, and that they are not wasting funds on untargeted marketing campaigns which bring little or no reward.

Should you defend legacy claims?
In times of family difficulties, many people have been heard saying “when I’m gone I’m leaving everything to the cats’ home”.  Charities can sometimes find themselves in an unenviable position; on the one hand they may be on the receiving end of a substantial legacy in someone’s Will.  On the other hand, there may be competing claims on the estate of the person who died.
Charities must seek to preserve charitable assets for the benefit of the charity.  Accordingly, they cannot simply walk away from the legacy and, anyway, the person who died wanted the charity to have the money.
However, on the other side, charities risk adverse publicity if they defend a claim the Courts ultimately deem such action as unreasonable.  Everyone remembers the hard time the RSCPA received after it lost a High Court appeal over a £2m legacy.
So what should a charity do?  Well, as lawyers, you won’t be surprised that we strongly recommend you seek advice from a professional who specialises in these sorts of claim.


You firstly need to analyse whether the claim being asserted by the family member (as it usually is) has any merit.  There are plenty of situations in which we would advise that you stand firm and wait to see if a claim really is likely to be brought.  Family disputes always involve high emotion and it is only at the point at which parties have to invest and risk substantial sums in legal fees that it is possible to see a parties’ true mettle.
Most cases we deal with nowadays are resolved by way of mediation and most of those take place before proceedings are issued.  Mediations have grown in success rates in recent years and are a popular way of ensuring a resolution without the need to go to a final hearing, and without press intrusion.

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About the author

Richard King

Richard King

Consultant Solicitor

A consultant solicitor in the charities & social enterprises team