a lack of trust? on target? taking things for granted? and some other charities things

Transcription

1 a lack of trust? on target? taking things for granted? and some other charities things Alan Eccles, Partner - Charities & Third Sector, Brodies LLP ABERDEEN EDINBURGH GLASGOW BRUSSELS

2 the rise of the SCIO legal form selection and the end of the trust?

3 what do the statistics tell us? Corporate legal status preferred by charities corporate identity- valuable and provides a constant risk companies and SCIOs a growing SCIO market share straightforward-ness flexibility- investment flexibility trusts older than 21 years- Scottish Law Commission wishes to make this a charities specific rule informed choice very few trusts a worryingly high number of unincorporated associations the place of the Community Interest Company industrial & provident societies- BenComms

4 SCIOs and choice Eccles, Third Sector, 19 November 2009 A new form of charitable vehicle is not unwelcome and could provide choice. However, SCIOs are not necessarily a panacea and their use will need careful consideration.

5 Targeted Regulation and legal governance 180! Annual Return Trustee Report (and the link to the virtuous circle ) explanations of governance, training and policies fit with the SORP more than just the numbers notifiable events the future charity review - sector based and risk based social enterprise (and trading) guidance/ FAQs grant-giving guidance

6 taking things for granted and deep impact what makes grant-giving charitable? yes, it might have fiscal benefits, but why charitable in it own right? impact? is that the key? how is it measured? what is the return? identification, consideration, evaluation, a difference that places obligations on grant-givers and recipient charities which brings us back to trustee reports, narrative explanation of benefit and SORP- impact

7 investment powers are they what they seem? The Charities and Trustee Investment (Scotland) Act 2005 the provisions on trustee investments apply to trusts i.e. to a charitable trust but not a SCIO, company etc Scottish Law Commission recommends moving them to a bespoke Trusts Act where does that leave charities?

8 investment powers are they what they seem? 2005 Act indicative of good practice? the investment duties are that the trustees must have regard to:- the suitability to the trust of the proposed investment; and need for diversification, in so far as appropriate to the circumstances of the trust and the trustees shall:- obtain and consider proper advice; and review the investments having obtained and considered proper advice

9 investment powers are they what they seem? the place of ethical investment when can a charity be ethical? the view from south of the border Charity Commission guidance CC14 the place of social investment as distinct from socially responsible investment the general duties might just be the investment duties or at least underpin them:- seek, in good faith, to ensure that the charity acts in a manner which is consistent with its purposes; and act with the care and diligence that it is reasonable to expect of a person who is managing the affairs of another person

10 three situations- similar, but with very different outcomes Chris Robshaw (Wales v England) what was the purpose and objective? Greg Laidlaw (Scotland v Samoa) What was the purpose and objective? Japan v South Africa What was the purpose and objective? implementation care and diligence previous experience communication responsibility

11 one view on New Zealand s triumph a prop that appears on the wing what is expected? should he be there? what should he do? what does an All Black prop do? how far do we take this analysis?

12 sporting legacy and inspiration Strong structures and tough decisions Warren Gatland, BOD and the Lions Miller's Trustees v Polson (1897) "a trustee is not entitled to purchase a quiet life at the expense of the estate, or to act as good-natured men sometimes do in their own affairs in letting things slide and losing money rather than create ill feeling".

13 some wider issues the variety of issues the sector gets involved with. Lobbying Act and Scottish lobbying register holiday etc pay National Living Wage self directed support intellectual property and data (e.g. fundraising) social enterprise and trading devolution- Scottish tax and Gift Aid land registration and land reform Community Empowerment Act and Land Reform Bill

14 FAQs Who are trustees? Who s in Charge? the ALEO Report the fit and proper person test trusts- the 1921 Act lapsed trusts

15 FAQs What is a membership? do we have a membership? member rights and responsibilities can be very powerful in footballing parlance- sack the board! ALEO Report a latent dangerous dynamic? who s in charge!?! think early and often SCIO- a useful tool to craft power balance clarity

16 FAQs Commercial activities #socent # socinv why do it? structure investment of charitable funds governance and parent charity control the investment, governance and control dynamic tax risk (1) Higgs Boson- sigmas (2) trusts- anti-bartlett provision focus what is charitable? ALEO Report entrepreneurialism distribution not donation- corporate law requirements

17 the next donation succession and charitable bequests/gifts tax law requirements- what is a charitable bequest for tax purposes? Routier v RCC flexibility do you wish to continue under the auspices of a will (trust)? Melita Jackson s estate- wills and estates disputes and charities conditions Burrell Collection Colin Rowell and Bishop Auckland FC

18 Always Watchful * Schrodinger s cat cats in boxes the effect of not looking in the box uncertainty all is ok or it is not! don t close (and lock) a box should you put the cat in the box in the first place? * Semper Vigilans, for the Latin scholars (I did metalwork)

19 effective and clear governance OSCR Inquiry Reports- key messages clear structure clear lines of accountability the appreciation of what it is to be a charity trustee what are the charity s high level objectives? project, financial and other management and oversight Recent reports:- The Kiltwalk The Cameron Fund The Alfred Stewart Trust Campbell Ozone Therapy

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22 Contact Alan Eccles PARTNER +44 (0)141 @BrodiesPersonal

23 a lack of trust? on target? taking things for granted? and some other charities things Alan Eccles, Partner - Charities & Third Sector, Brodies LLP ABERDEEN EDINBURGH GLASGOW BRUSSELS