Charity commission updates

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New podcasts

On 9th June 2014 the Charity Commission published two new podcasts offering guidance on beneficiaries as trustees and managing internal disputes within the charity.

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Trust in charities remains high

An independent research report into public trust and confidence in charities undertaken by Ipsos MORI on behalf of the Charity Commission has revealed that overall trust and confidence in the sector remains high at 6.7 out of 10 showing no significant variation in recent years.

However the Charity Commission has warned that this is not a reason for complacency. Only 71% of people agreed that "most charities are trustworthy and act in the public interest" compared to 75% in 2010 and 74% in 2012.

Almost half of the people (49%) surveyed cited "ensuring a reasonable proportion of donations gets to the end cause" as the most important aspect of trust and confidence (an increase from 43% in 2012) with 6 out of 10 people agreeing that "charities spend too much of their funds on salaries and administration".

Interestingly the number of people claiming they, or their friends or family, have benefited from a charity has increased significantly from 9% in 2005 to 40% in 2014.

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Charity accounts review examines reductions in permanent endowment funds

The Charity Commission's concern that charities might decide to spend the capital element of their permanent endowment (PE) without legal authority, as access to public funding and fundraised income became more difficult, has proved unfounded. The Commission conducted a review of 60 charities whose accounts showed a reduction in the level of PE funds on the previous year and were encouraged to find that trustees were seeking professional advice in relation to the treatment of their PE funds.

The Commission found 6 of the 60 charities had reclassified some or all of their PE funds as restricted or unrestricted funds, 5 of which had taken professional advice and the 6th was regulated by an alternative regulator who had been made of aware of the reclassification. The reduction in the PE funds of the other 54 charities was attributable to depreciation, investment losses or application of the total return approach.

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