Updated coronavirus guidance for the charity sector

16th December 2020

The Charity Commission has updated its Coronavirus Guidance for charities, which sets out some helpful advice for trustees running a charity during the coronavirus pandemic.

In particular, this has been updated to reflect the new regulatory provisions applying to charities for holding trustee and members' meetings, and the extension of support for incorporated charities to avoid insolvency under the Corporate Insolvency and Governance Act 2020 (the 2020 Act).

The updated Guidance can be found here. We have set out a brief summary of the changes below.

Trustees' and members' meetings

The updated Guidance advises that:

  • In England: Although there are new rules restricting meeting socially in England from 2 December, you can still hold trustee or members’ meetings where these meetings are necessary for providing voluntary or charitable services.
  • In Wales: Similarly, new rules restrict meeting socially in Wales from 9 November, and these stated that if you can, you should hold trustee or member meetings online or by telephone. However, if you cannot do this, you can hold trustee or members’ meetings in person if this is necessary to provide voluntary or charitable services.
  • Throughout England and Wales: Don’t forget to check your constitutional document to see whether meetings may be held electronically. If your charity is a CIO or charitable company (an incorporated charity), you are permitted under the 2020 Act to hold members’ meetings online until 30 March 2021. However, for all other charities, and for trustee meetings, your constitution will need to expressly permit this, so it is a good idea to amend your constitution to ensure that this will be an option in future.

Support with avoiding insolvency

Importantly, the Guidance notes that the measures introduced by the 2020 Act to help incorporated charities to keep operating and avoid insolvency, which were due to come to an end on 30 September 2020, have been extended.

By way of reminder, these are:

  • The creation of a moratorium, a period in which no legal action can be taken against the company, which offers breathing space from debt enforcement action so charities can explore options for rescue or restructure;
  • Limiting suppliers’ right to use termination clauses in supply contracts, to provide for continuity of supplies to charities and allow them to continue to operate;
  • Suspension of wrongful trading provisions, allowing trustees to continue operating a charity through the pandemic without the threat of personal liability – these provisions have been reinstated, so that it won’t be possible to bring wrongful trading claims in relation to losses caused by trading between 26 November 2020 and 30 April 2021;
  • Suspension of the use of statutory demands and a restriction on winding up petitions, to help charities which cannot pay their bills due to the pandemic – these provisions now apply until 31 December 2020; and
  • Support for viable charitable companies struggling with debt to restructure under a new procedure (note that these provisions do not apply to CIOs).

More detailed information about the support offered by the 2020 Act can be found here.

The Charity Commission has been providing coronavirus-specific guidance for charities throughout 2020, and a more detailed summary of the Commission’s guidance can be found in our blog post here.

How we can help

If you would like any support or assistance with the above, or with any other challenges your charity is currently facing, please let us know. Blake Morgan has a wide range of skills and teams that can help you with managing the challenges presented by coronavirus. Our charity team has a particular expertise in risk management.

If you have any queries about the guidance above, or there are any other issues we can help you with, please do get in touch with Ben Brice or Laura Sherratt.

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