Welcome to our latest Charities Bulletin
The latest issue of our Charities Bulletin looks at strategic planning for trustees, media management in a crisis, collaboration in the public sector, the changing world of pensions and an update on our forthcoming events.
How Trustees Should Engage in Strategic Planning
Media Management in a Crisis
Trustee Facts and Figures
Collaboration in the Public Sector
The Changing World of Pensions
Charities Sector Events
How Trustees Should Engage in Strategic Planning
It is a principal role of charity trustees to set the strategic direction of their organisation. Indeed strategy should be on the minds of all trustees at every meeting. Most organisations do seek to engage in strategic planning on a regular basis. To achieve the most from this, a strategy formulation should be adopted and an appropriate strategic planning process designed relevant to the organisation and the issues faced. Recent trends in strategic planning should be noted – plans are becoming shorter and are being undertaken more frequently and there should be opportunities given for all trustees to contribute, perhaps at an away day. There are particular questions which should be asked in any strategic planning exercise and common pitfalls must be recognised and overcome. The focus should be on core strategic issues.
Lindsays has experience in assisting our clients in carrying out strategic planning reviews and if you wish to discuss this on a no commitment basis please contact Alastair Keatinge.
Back to topMedia Management in a Crisis
“Glass, china and reputation are easily cracked and never well mended” Benjamin Franklin
It is vital that charities ensure that their reputation is protected at all times. The first step in protecting your reputation is prevention by risk assessment. Where are you most vulnerable or what might go wrong? – People, services, buildings, activities, money. Then put appropriate risk management systems in place. Also plan ahead – appoint a crisis team of key people, give them clear roles and train them. Then develop procedures and information needed by the crisis team.
If despite all the preventative steps a crisis hits, don't make a statement to the press until you have all the facts. Call together the crisis team, get information, decide on your approach and have one spokesman for this. If any legal issues arise, e.g. defamation, take professional advice.
Back to topTrustee Facts and Figures
Alastair Keatinge recently attended the Governance Trustee Exchange held annually in London. The keynote speaker was Andrew Hind, former Chief Executive of the Charity Commission. Andrew provided some interesting data in his talk, namely that there are 1.2m trustees in the UK with an average age of 57 and 70% are over the age of 50. Only 0.5% are under 25 and the majority of trustees are male. The average Board size is 5 but increases to 10 where the turnover exceeds £250,000 and to 12 where the turnover exceeds £1m. How do your charity trustees compare with these figures?
Back to topCollaboration in the Public Sector
At a time when local authority budgets are being squeezed ever tighter, charities providing similar services on behalf of local authorities are being encouraged to work together in order to deliver cost-saving and rationalisation or face losing the service contract.
Local authorities are re-tendering service contracts with the stark message that they expect to see charities working together so that they are funding fewer service providers.
Prior to submitting a tender document charities in this position have little option but to start a dialogue with other services providers. Often, this will result in charities merging or forming a consortium to tender for the contract.
Alternatively, charities may submit their own tender and face the risk of the contract being transferred to another organisation working in the sector.
Whatever the scenario, it’s important that charities in this position give serious thought to TUPE. For the uninitiated, TUPE is the Transfer of Undertakings (Protection of Employment) Regulations 2006, and the purpose of the Regulations is to protect the employment of the staff of an organisation where the service that the organisation provides is being transferred to another organisation.
So, if a charity tenders for a contract and is unsuccessful, it is likely that the employment of its staff will be transferred under the TUPE Regulations to the organisation which wins the tender. In this situation, the charity which has lost the contract will be the “Transferor” and the one which has won the contract will be the “Transferee”. Both are under legal obligations.
The Transferor has an obligation to inform its employees about the transfer and consult in relation to any changes that are going to take place as a result of the transfer. Failure to inform and consult, or failure to do it properly, puts the Transferor at risk of a claim by the transferring employees for up to 13 weeks’ actual pay per employee.
The Transferor is also obliged to provide the Transferee with certain information relating to the employees who will be transferring (e.g. details of their terms and conditions of employment). Failure to provide the information, or the provision of inaccurate information poses the risk of a claim by the Transferee for up to £500 for each employee.
However, it is perhaps the Transferee which is under the greatest obligation. It has to be prepared to take on the transferring employees and the cost of this has to anticipated when any organisation is tendering for a service contract. The Transferee is also obliged to recognise the length of service of the transferring employees and to maintain their employment on the same terms and conditions. Other than in very limited circumstances, any change made to terms and conditions will be void (and could lead to claims of constructive dismissal if they are imposed without the employees’ consent) and any dismissal because of the transfer will be automatically unfair.
In addition, the Transferee has an obligation to inform its own employees about the transfer and provide the Transferor with information to allow the latter to inform its employees of any changes that it envisages as a result of the transfer (e.g. redundancies). In common with the Transferor, a failure to inform can result in employment claims.
It is understandable that when a charity is fighting for a contract, or even its continued existence, the TUPE implications can be overlooked. However, given the serious consequences, can charities afford not to give TUPE the priority it demands?
Back to topThe Changing World of Pensions
By Richard Strachan, Senior Consultant, Aon Hewitt
Almost every legislative change seems to prompt a further complication for charities and pension changes are rarely an exception to this. The latest issue for charities to contend with, stems from the fact that they will soon have to auto-enrol their employees into either their own pension arrangements (subject to certain criteria), or into the new Government-run National Employment Savings Trust (NEST). Needless to say, much advice is already coming the way of charities – and not all of it right.
Among recent comments have been some suggesting that these changes would make charities less attractive to pension providers. The supposition is that as a result of their lower margins, pensions providers will struggle to find profit in offering their products to organisations in a sector where many entities employ a small number of staff (often low-paid), and have high levels of staff turnover.
While it's a view that has some validity, it should be treated with caution, as the correct solution will be dependent on individual charities’ circumstances. What is certain is that all organisations (charitable or private sector) need to consider how they will comply with this legislative change at a time of reduced funding and income and with substantial pressure to reduce costs.
Organisations will be ‘staged’ into complying with this new legislation according to their PAYE headcount (the largest going first) and they will be notified of their need to comply 12 months before their ‘staging date’.
Clearly there is a need for organisations to seek advice prior to their staging date. Acting early in this regard – and certainly before providers modify their business models in the light of both the above factors and further regulatory changes at the end of 2012 - will prove to be particularly astute.
Aon Hewitt is the world’s pre-eminent human resources consulting and outsourcing firm and can provide advice to charities of all sizes on pension scheme design and implementation, taking account of all the available options including NEST.
To find out more please contact Richard Strachan on 0131 456 6430 or richard.strachan@aonhewitt.co.uk.
Back to topCharities Sector Events
Our Charities Group is involved in the following events over the coming months:
- Charity Secretarial Administration in Scotland 2011 – Alastair Keatinge will chair this conference, organised by Jordans, which takes place in Edinburgh on Thursday 2nd June. The event will focus on the best practice methods in charity administration. A dynamic line up of speakers will lead you through the areas of charity law, practice and formality that you need to be aware of in this expanding area. For more information and to book your place go to www.jordan-training.co.uk/csas.
- Charity Investment Training for Trustees and Investment Tactics in Today’s Economic Landscape – Alastair Keatinge will speak at this one day conference organised by Sarasin & Partners which takes place at the Royal Society of Edinburgh on Tuesday 7th June. This event will cover what every charity trustee needs to know about their legal and investment responsibilities in layman’s terms: arming yourself with questions to tackle your advisers with! This training is based on the Foundation Course that Sarasin & Partners run on behalf of the Charity Finance Directors’ Group (CFDG). Attendance is free of charge. To find out more email events@sarasin.co.uk.
- Governance Magazine – Trustee Training Seminar – This event will be led by Dorothy Dalton, Editor of Governance Magazine and will take place in Lindsays Edinburgh office on Friday 10th June. This course is an excellent way of becoming a better trustee sooner rather than later. With lots of illustrated examples, covering topics from roles, collective authority and the three strands of governance, your relationship with the chair of trustees and the chief executive to understanding charity finance and governing without managing. It also acts as a refresher course for existing trustees who need to keep abreast of changes in legislation and evolving case law. For further information go to www.civilsociety.co.uk/events.
We hope you found this Bulletin informative. If there are any topics that you wish covered in our future Bulletins please contact Alastair Keatinge - alastairkeatinge@lindsays.co.uk.
Lindsays has wide experience in acting for clients in the charity and not for profit sector. If you would like to discuss any issues with our team, please get in touch.
This newsletter has been issued by Lindsays on the basis of publicly available information, internally developed data and other sources. Whilst all reasonable care has been taken to ensure the facts stated and the opinions given are correct, Lindsays does not accept any responsibility for its content and advise that specific advice should be sought regarding the topics covered.
© Lindsays 2012
