Charitable Funds Policy Version: 1.0 Ratified by: EMT Date ratified: 26.05.2011 Name of originator/author: Name of responsible committee/individual: Date issued: 26.05.11 Review date: May 2013 Target audience: Comments/queries please contact: Keren Salt, Head of Governance 01604 651156 Keren.Salt@northants.nhs.uk Keren Salt, Head of Governance Charitable Funds Committee All those with Charitable Funds responsibilities, including NHSN, NHSN Provider Services, rthampton General Hospital, rthamptonshire Healthcare Foundation Trust
Version. Date Who Status Comment 0.1 19.11.10 Keren Salt Draft Initial draft 0.2 06.1.11 Keith Brooks Draft Additional information added 0.3 Jan 11 Peter Kelby Draft Minor amendments 0.4 Mar 11 PCT CF Committee members Draft Minor amendments 0.5 May 11 Keren Salt Draft Minor amendments following consultation 1.0 May 11 EMT Approved 2
Contents Charitable Fund Policy... 5 Introduction... 5 Hallmark 1 Purpose and Direction... 5 Hallmark 2 A Strong Board... 6 Roles and Responsibilities... 6 The Corporate Trustee... 6 Charitable Funds Committee... 6 Cransley Hospice Charitable Funds Sub Committee... 6 Financial Systems... 6 Fund Managers... 7 Cransley Hospice Fund Raising Team... 7 Hallmark 3 Fit for Purpose... 7 Fund Details... 7 Risk Management Plan... 8 Sources of Funds... 8 Donations... 8 Legacies... 8 Grants... 9 Income from Charitable Trading... 9 Income from n-charitable Trading... 9 Fundraising... 9 Hallmark 4 Learning and Improving... 10 Hallmark 5 Financially sound and prudent... 10 3
Requests for Expenditure... 10 Cransley Hospice... 11 Written Procedural Guidelines... 11 Local Banking Procedure... 11 Reserves Policy... 11 Management Information... 12 Hallmark 6 Accountable and Transparent... 13 Annual Accounts and Annual Report... 13 Complaints and Concerns... 13 Beneficiary and Service User Involvement... 13 Equality Impact Assessment... 14 4
Charitable Fund Policy Introduction NHS Trusts are permitted to hold Charitable Funds for purposes relating to health for the public benefit of those for whom they were intended. The main sources of funds are donations, legacies, investment income and the proceeds of fund raising activity. All funds may be used for the general purposes of the charity, except where the terms of any legacies or the beneficiaries for fund raising have specified or implied a more specific restriction. The Charitable Funds are registered with the Charity Commission in the name of rthamptonshire Teaching PCT, registration number 1052867. This charity is a group registration and applies the income and capital for any charitable purpose relating to the NHS wholly or mainly for the services provided by rthamptonshire Provider Services and rthamptonshire Healthcare NHS Foundation Trust. There is also a separate Charity Fund namely the Walter Slye Fund (registration number 213907) which is under the ultimate trusteeship of the Board of NHS rthamptonshire in its capacity as Corporate Trustee. This fund is small and does not require annual accounts, however an Annual Update must be provided to the Charity Commission in order to illustrate performance during each financial year. In order to ensure that rthamptonshire Teaching PCT Charitable Fund operates effectively and efficiently and to provide the best possible service to the people it was set up to benefit, we have adopted the Hallmarks of An Effective Charity (Charity Commission, 2008). In doing so we uphold the following hallmarks: Hallmark 1 Clear about its purposes and direction Hallmark 2 A Strong Board Hallmark 3 Fit for purpose Hallmark 4 Learning and improving Hallmark 5 Financially sound and prudent Hallmark 6 Accountable and transparent Hallmark 1 Purpose and Direction rthamptonshire Teaching PCT Charity Fund is established for charitable purposes relating to the NHS; its Trustee arrangements have been established by the Secretary of State for Health and individuals responsible for ensuring that trustee duties are fulfilled are appointed by the NHS. The Charitable Funds Committee set out the high level strategy for the Charity annually, taking account of future sustainability (what is needed now and in the future). 5
The purpose of this document is to provide clear guidance to staff of what to do when dealing with charitable monies, detailing procedures for dealing with income and expenditure, governance and accounting processes. The policy might also be of interest to those who very generously make donations and legacies and to those who wish to access funding. Hallmark 2 A Strong Board Roles and Responsibilities The Corporate Trustee The Board of NHS rthamptonshire is the Corporate Trustee of the Charitable Fund, in line with this role it has established a Charitable Funds Committee to administer those funds in accordance with any statutory or other legal requirements or best practice required by the Charity Commission. In doing so, the Corporate Trustee recognises that the establishment of a Charitable Funds Committee does not alter its responsibilities, which remains the trustee as a corporate body (NSHN Standing Orders 26:2010). The Corporate Trustee understands that it must act only in the Charity s interests and it will identify and manage any conflict of interest. Charitable Funds Committee The Charitable Funds Committee is a formally constituted committee of and accountable to the Corporate Trustee. The main purpose of this Committee is to: Ensure that funds are accessed and used for the public benefit of those for whom they were intended; Oversee the management, investment and disbursement of charitable funds according to Charity Commission guidance and to ensure compliance with the laws governing charitable funds including compliance with Public Benefit requirements as set out in the Charities Act 2006. Cransley Hospice Charitable Funds Sub Committee Cransley Hospice Charitable Funds Committee is a sub-committee of the Charitable Funds Committee. This Committee is responsible for the appropriate management of Cransley Hospice Funds and to establish and monitor an annual spending plan, ensuring that requests for funding meet the purpose of the fund. This Committee is accountable to the Charitable Funds Committee. Financial Systems The financial management systems of charitable funds are currently administered by rthampton General Hospital NHS Trust under Service Level Agreement (SLA). The services provided under this agreement include: Creditor Payments; Treasury management including dealing with investment bankers; 6
Processing of Charity Aid Foundation (CAF) vouchers and gift aid reclaims,. Financial Accounting (control a/c preparation, bank reconciliation). Basic transaction allocation to comply with SORP 2005 requirements Preparation of trading account for Charity shop and monitor VAT status. Accounting for Investment gains and losses Preparation of final accounts statements for inclusion in the Annual report Systems management support Maintaining fund managers lists Producing fund statements for managers on a quarterly basis Producing financial information to support charity management committee meetings Fund Managers (Fund Holders) Fund Managers are responsible for ensuring that charitable monies are spent appropriately within public benefit guidelines and that the funds are administered separately to exchequer funds. A full list of fund managers is maintained and reviewed annually to ensure its accuracy. Cransley Hospice Fund Raising Team The Cransley Hospice Fund Raising Team are responsible for raising money for the support of the hospice and also work to continually raise its profile within the community. In addition, the Team are responsible for administering all day to day aspects associated with fundraising such as sending thank you letters, gift aid claims and maintaining a comprehensive fund raising database. The fund raising team work to the Cransley Hospice Ethical Guideline for Fundraising which is based on the Institute of Fundraising guidelines. Hallmark 3 Fit for Purpose Fund Details Within the main charitable registration a number of separate special purpose charities have been listed for each of the constituent health bodies within the group registration. The objects of each charity provide for the funds to be applied for any charitable purpose relating to the NHS and proceed to earmark the fund for a particular health body reflecting the origin of the fund. The specific names and objectives of each fund are listed in the table below: Fund Community General Purpose Fund Cransley Hospice Fund Mental Health Fund Purpose For any charitable purposes relating to the NHS wholly or mainly for community services For any charitable purpose or poses relating to the NHS wholly or mainly for palliative care services; established to provide support for Cransley Hospice in Kettering. For any charitable purpose or purposes relating to the NHS wholly or mainly for mental 7
health services General Charity Fund To combine the investments and money belonging to the charities and representing expendable funds into one pooled fund. The PCT undertakes reviews of the funds in order to ensure flexibility for future spending requirements. Risk Management Plan Regular risk review and assessment of the risks faced by the Charity is undertaken in all areas of its work and plans to effectively manage those risks are implemented. A Charity Fund risk register is maintained by the PCT Head of Governance that is reviewed, checking the effectiveness of actions taken to mitigate the risks, and reported to the Charitable Funds Committee. Sources of Funds Charitable Funds must be kept separate from NHS Exchequer monies. Neither NHS organisations nor Exchequer funds can make donations to Charitable Funds. Monies must not be accepted for the personal benefit of any individual staff member; for details on how to handle gifts and hospitality please refer to the PCT Hospitality, Sponsorship and Register/Declaration of Staff Interest policy which can be found on the intranet. Donations Any donations or other income received is held in trust and must be paid promptly into Charitable Funds bank accounts. Please see the separate processes for the various locations in the Written Procedural Guidelines section of this document. Legacies 95% of these will be advised by Solicitors, and may be addressed to any part of the organisation originally, on receipt initial correspondence should be addressed to the head of governance for acknowledgement and progression.. A copy of the Will or extract should always be requested before accepting any money to ensure that the deceased wishes can be adhered to. When a legacy is of a specified amount, it is normally straightforward. However there maybe complications which will require to be addressed on a case by case basis. 8
On completion where the charity is a residuary beneficiary the Estate Accounts must be checked and a letter written in the name of the nominated charity representative to confirm acceptance. In all instances there must be a final confirmation of receipt of funds confirming the purpose for which they will be applied. Sallly Leeson (Head of Corporate Finance) NHS rthamptonshire Francis Crick House Summerhouse Road Moulton Park rthampton NN3 6BJ E-mail Sally.Leeson@northants.nhs.uk Grants The charity may request grants, primarily from other charities, the conditions attached to any grants received will potentially impose restrictions on fund usage, which should be advised to the finance team on receipt to ensure they are correctly recorded. Income from Charitable Trading Income received whilst carrying out the purposes of the charity is regarded as charitable trading. This includes income from training and lectures connected to the charity and income from coffee shops or similar directly provided by the charity as a service to patients, relatives and staff. Income from n-charitable Trading This includes the operation of the Cransley Hospice charity shop and any other regular trading activities that HM Revenue and Customs do not consider to meet fundraising event criteria. Guidance from the Charity Commission states that any trading arrangements should be limited to supporting the charities overall purposes and objectives. If non charitable trading exceeds defined turnover thresholds there are VAT implications to be considered. Fundraising 9
The majority of one off events and activities organised to raise funds other than direct donations are categorised as fundraising. This includes income from organising fetes and other social events In all instances risk assessment and reputational standing should be considered before any events are undertaken. It is important that money handling is secure and processes are designed and implemented to ensure that no member of staff or volunteer is put at risk of suspicion. Any fundraising activities which affect the general public and include an element of chance must comply with the Lottery Act Hallmark 4 Learning and Improving rthamptonshire Teaching PCT Charitable Fund carries out a review of public benefit, finances, activities, achievements and the performance of the fund at least annually. The details of this review can be seen in the Annual Report. The Charitable Funds Committee also carries out an annual review of its effectiveness through the use of the Committee Effectiveness Tool, the results of which are reported back to the Committee and contains any recommendations identified. Upon receipt of the report on the audit of the annual accounts, the PCT ensures that any resulting recommendations made by the auditors are implemented to ensure that the Charity continues to be able to fulfil its purpose. Hallmark 5 Financially sound and prudent Requests for Expenditure Any requests for expenditure should be made using Form RE 1 (attached at appendix1). Requests for expenditure can be authorised through the following routes (as defined within the NHS rthamptonshire Scheme of Delegation, reference 5): Signatory Amount Fundholder Up to 1000 Fundholder and Director of Finance or nominated deputy Up to 2500 Director of Finance or Chief Executive Up to 10,000 Chairman and Vice Chairman of the Charitable Over 10,000 10
Funds Committee Cransley Hospice Separate arrangements apply to the Cransley Hospice Fund due to the size of the fund and the close links between the fund and the PCT as host for its staff. An agreed annual financial plan will be approved by the Cransley Charitable Funds Committee and the PCT Charitable Funds Committee. Authorisation of expenditure in line with this plan will be set down as follows: Signatory Amount Fundholder or Fund Raising Manager Up to 2,500 Fundholder and Director of Finance or nominated deputy Up to 10,000 Director of Finance or Chief Executive Up to 50,000 Chairman and Vice Chairman of Charitable Funds Committee Over 50,000 Written Procedural Guidelines Written procedural guidelines are wide and varied for the operation of charitable funds that make up the rthamptonshire Teaching PCT Charitable Fund. Written procedures are in place for the following and can be accessed via the PCT website: rthamptonshire Healthcare NHS Foundation Trust Charitable Funds Policy Routes via which monies can be banked to the Cransley Hospice Charitable Fund Community Fundraising Registration and Agreement Form (Cransley Hospice) An Ethical Guideline for Fundraising (Cransley Hospice) Local Banking Procedure Reserves Policy 11
Trustees are under a legal duty to apply charity funds within a reasonable time of receiving them. Trustees need to consider, and regularly review, what level of reserves it is appropriate for them to hold. Without a reserves policy, trustees cannot be content that their reserve levels meet current needs. If reserves are too high, the charity is retaining funds without justification and this could constitute a breach of trust. If reserves are too low, the fund s ability to meet future commitments or needs may be at risk. Trustees are required to have a formal reserves policy, review this regularly and report on it in their annual report. It is the policy of the Trustee to spend income on charitable purposes rather than build up reserves for future unknown needs. In general a minimum balance to cover a year s planned expenditure will be held, for details please see the rthamptonshire Teaching PCT Charitable Funds Reserves Policy, via the PCT website. Management Information In order to discharge their responsibilities effectively and to assure the Corporate Trustee, members of the Charitable Funds Committee need relevant management information to inform their decision making. This information must be timely, relevant, usable and accurate. As well as the more usual financial information relating to budget and spend to date, members are informed of significant donations, a list of large or significant transactions, a summary investment report, a report on slow moving or overdrawn funds and a report on the use of the Chairman s discretionary powers. Members are also provided with non-financial information about the context within which the fund is operating so that they are able to make informed decisions about future strategy. Members are able to formulate the strategic aims for the charity using the information provided above, consideration of the Charity Commission s general guidance on public benefit and monitor progress against those aims during the year. Investment Policy The Charity Investment Policy sets out the general objective that the investments must be managed in such a way as to provide sufficient income to enable the charity to carry out its purposes effectively both in the short and longer term. Where possible the value of the assets should be enhanced so as to at least keep pace with inflation over the longer term. The Investment Policy requires that an approximate balance is maintained between enhancement of capital and the generation of income and requires a medium risk approach in the management of the Charity s assets. The rthamptonshire Teaching PCT Charitable Funds Investment Policy can be accessed via the PCT website. 12
Hallmark 6 Accountable and Transparent Annual Accounts and Annual Report rthamptonshire Teaching PCT complies with its legal obligations as set out in the Statement of Recommended Practice (SORP), to produce annual accounts and an annual report. The annual accounts are produced by rthampton General Hospital Finance Department under a Service Level Agreement and the Annual Report by NHS rthamptonshire Finance Department. The accounts are audited by KPMG prior to being signed off and submitted to the Charity Commission. Complaints and Concerns Any complaints regarding charitable funds are handled through the PCT s Advice and Information Service, the Complaints and Concerns Policy and Procedure details how to make a complaint or raise a concern and is available on the PCT website. The PCT is a member of the Fundraising Standards Board, to which the public can refer if they feel that their complaint or concern about charitable funds has not been dealt with appropriately. Beneficiary and Service User Involvement rthamptonshire Teaching PCT Charity Fund maintains close links with staff and patients within the related health organisations and their hospitals and service. The Charitable Funds Committee includes representatives from all of these organisations. These relationships enable the most effective use of the charitable funds in that they are directed to ensure that they make an effective contribution to these organisations activities. The Charitable Fund also maintains close links with individual local charitable and voluntary organisations such as League of Friends. Monitoring and Control of this Policy This policy is monitored through the effective implementation of the processes described within, the output of these processes being reported through to the relevant committee and/or the Corporate Trustee. Internal Audit also provide assurance through their auditing of systems and processes. 13
Equality Impact Assessment Questions and Definitions Yes/ Comments Name of document being assessed: Charitable Funds Policy Does the document/guidance content affect one group less or more favourably than another on the basis of: Race Religion or belief Gender Sexual Orientation Gender Identity Age Disability Socio- Economic Carers Refers to the protected characteristic of race. It refers to a group of people defined by their race, colour, nationality (e.g. citizenship), ethnic or national origins (e.g. gypsies and travellers) Religion has the meaning usually given to it but belief includes religious and philosophical beliefs including lack of belief (e.g. atheism). Generally, a belief should affect your life choices or the way you live for it to be included in the definition. Refers to eliminating sex discrimination and harassment and to promote equality for women and men. Whether a person's sexual attraction is towards their own sex, the opposite sex or to both sexes. Whether a person's gender identity is with their own gender or the opposite gender. This refers to a person belonging to a particular age group, which can mean people of the same age (e.g. 32-year-olds) or range of ages (e.g. 18 30-year-olds, or people over 50) A person has a disability if he or she has a physical or mental impairment which has a substantial and longterm adverse effect on that person's ability to carry out normal day-to-day activities. A group of people who face disadvantage based on their location, background and other protected characteristics e.g. Post Code Lottery - where they live means there life expectancy is lower. A person cares for a child under 16 or a disabled child under 18, or if they re a carer for an adult, where it has an effect on that person's ability to carry out normal day-to-day activities. Is there any evidence that some groups are affected differently? If you have identified potential discrimination, are there any exceptions valid, legal and/or justifiable? Is the impact of the document/guidance likely to be negative? If so, can the impact be avoided? What alternative is there to achieving the document/guidance without the impact? Can we reduce the impact by taking different action? If you have identified a potential discriminatory impact of this procedural document, please refer it to the HR Department, together with any suggestions as to the action required to avoid/reduce this impact. For advice in respect of answering the above questions, please contact Communications & Human Capital. 14