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MICHAEL KERRIGAN of law firm DEBENHAMS OTTAWAY considers a range of developments in working practices some of which are covered, or will be, by legislation.

The charity sector continues to face a number of challenges and pressures relating to the cost of living crisis and economic outlook generally. As employers, charities need to be certain that they are aware of changes to the law and best practice to ensure high levels of staff retention and to avoid potentially costly disputes.

Here is a summary of recent and proposed changes in law and best practice and areas of potential conflict that are likely to be of particular importance to charities.

Side hustles

As a result of more flexible working practices, together with the cost of living crisis, increased technology, and the gig economy, workers are increasingly looking for ways to earn extra income. This can range from running a full-blown business to trading on e-commerce sites or social media work.

Some employers allow employees to pursue side hustles, with or without permission. Others take the view that side jobs will never be acceptable. If consent needs to be sought, including a contractual term to this effect is recommended, together with a disciplinary policy that taking second jobs without consent may be considered misconduct.

Primary employers are in theory liable for a breach of the 48-hour working week limit (applicable to all jobs worked) and productivity may dip if an employee is working too long, so visibility of side hustle work undertaken is important, both legally and practically. Charities in particular may also need to consider reputational damage if an employee is involved in a side hustle which creates a conflict of interest or if they are involved in activities which could attract negative publicity.

There are numerous instances of side hustles, e.g. an individual who was running her events planning business during her working hours; an employee who was posting explicit content on a subscription website. Having a clear policy around this issue and informing staff is key to avoiding disputes and reputational damage.

Making redundancies properly

With many charities facing a perfect storm of increased running costs and reduced income from donations, redundancies may be necessary. This may simply be to reduce costs or it may be that you have identified that the charity could work more efficiently due to a reorganisation resulting in reduction of headcount.

Prior to considering redundancies you should consider whether alternatives can be explored to reduce costs such as recruitment freezes, banning overtime or requesting volunteers.

In the event that you consider redundancies may be necessary there are number of important issues to consider such as the number of redundances that may be needed, which roles will be impacted and the timings. The timing and duration of any consultation period with staff will be impacted by the number of redundancies being made.

To reduce the risk of claims, including unfair dismissal, you will need to go through a reasonable consultation process, consider ways in which the redundancies could be avoided and whether any redundant staff could be redeployed.

Redundant staff will be entitled to notice or notice pay and (if they have two or more years continuous service) a statutory redundancy payment calculated based on their age, length of service and weekly pay (subject to a statutory cap). Therefore a redundancy process can represent a large financial cost particularly if the redundant employees have long periods of service.

If charity employers want to reduce the risk of potential claims they can consider offering enhanced redundancy packages in exchange for employees signing settlement agreements in which they would waive their right to pursue claims. Offering enhanced packages can increase the overall costs dramatically.

Having a clear business case and reasonable process will ensure that any disruption to the charity’s work is reduced and that any impact to staff morale is minimised.

Due to the complex legal issues and procedural requirements it is advisable that you seek legal advice in the event you think redundancies may be necessary.

The menopause issue

With around two thirds of people employed in the charity sector being women it is somewhat surprising that it has taken so long for the menopause and its impact to be discussed openly. The menopause has become an increasingly prominent issue in the last 18-24 months with an explosion in media coverage. Whilst this has been broadly welcomed as a positive development for women’s rights it has increased the risks for employers who may not be adequately prepared.

The impact of the menopause can be severe with symptoms severely effecting a woman’s life. In the event that the physical and/or mental effects of the situation are sufficiently severe, it is likely that this will be considered a disability under the Equality Act 2010. As such any unfavourable treatment from employers due to menopause could lead to potential dispute and claims.

In the event that a woman is struggling to perform her role due to menopause an employer is likely to be obliged to consider if they could make any changes (adjustments) to her role to help overcome the impact of menopause. For example, if an employee is suffering with night sweats and insomnia and therefore having hugely disrupted sleep, an employer could consider offering home working or flexible start times by way of an adjustment.

Charity employers should take a proactive approach to the issue of the menopause and should consider:

• Introducing menopause training to all staff.
• Introducing a menopause policy.
• Appointing menopause champions to help support vulnerable staff.
• Proactively considering and suggesting possible adjustments.

Despite women making up a large percentage of the workforce and the fact that all women will go through the menopause at some point many employers still have no clear policy around dealing with matter. A survey of organisations in Hertfordshire (including a number of charities) showed that only 25% had implemented a menopause policy and only 15% had provided menopause training.

If charity employers want to retain staff going through menopause, maximise productivity and avoid claims, they need to take positive steps to consider the condition and its impact on their charity.

Carer's Leave Bill

As part of the government’s focus on ensuring more people are supported to remain in employment, it is looking at various measures to support workers. There is currently no dedicated right for carers of long term sick, disabled or elderly people, to take time off work; carers often rely on other leave rights, including annual leave.

The proposed Carer’s Leave Bill will give eligible employees an additional right to time off work. The right is for at least one week’s unpaid leave in any 12-months. It is proposed that carer’s leave can be taken “flexibly”, in individual or half-days and that carers will have protection from dismissal or detriment.

Flexible working changes

The government is also supporting the proposed Employment Relations (Flexible Working) Bill currently going through the House of Commons, which contains the following provisions:

• Flexible working requests will now be a “day one” right.
• Two formal requests can be made in a 12-month period.
• Employers must consult with employees before rejecting.
• The period to consider and decide will be reduced to two months.

As women are statistically still more likely to have family caring responsibilities and to submit flexible working requests, changes to the rules of flexible working requests and introducing carers leave is likely to have a significant impact on charities due to the large numbers of women employed in the charity sector, as already mentioned.

Hybrid working

Some recent commentary has suggested that hybrid working may have “failed” with performance levels potentially dipping now that the novelty of working from home has become the new norm. A recent article in the Daily Telegraph has reinforced this view by reporting that 1 in 7 firms were looking to increase office hours to no less than four days a week for full timers.

A recent Microsoft survey has revealed that 80% of bosses think that workers are less efficient when working from home, in stark contrast to 87% of the workers themselves, who believe that they are more so. Microsoft’s CEO termed management concerns as “productivity paranoia”.

A 2020 ONS Survey demonstrated that those who worked from home to any degree worked more hours (32.3 on average per week) than those who never worked from home (27.7) and had a lower sickness absence rate.

Whether hybrid working has been a success or failure is likely to be highly personal to your charity. It does seem clear however that recruitment and staff morale may be negatively impacted if this option is not offered. If you have already introduced hybrid working and this has not been successful it is important to seek advice on how to withdraw or vary this arrangement as it may be considered a breach of contract to do so.

Maternity leave protection

A recent report by the Women and Equalities Committee has found that large numbers of women still feel that they suffer some form of disadvantage at work due to being pregnant or taking maternity leave. The report has therefore recommended enhanced protection for both new and expectant mothers.

The Maternity and Parental Leave Regulations 1999 already provides that an employer must offer a woman on maternity leave a suitable alternative vacancy (where one is available with the employer or an associated employer), in preference to a suitable non maternity leaver, before making a woman redundant during maternity leave. 

The new Bill proposes that redundancy protection applies from the point the employee notifies the employer of her pregnancy, whether orally or in writing. The government will also extend the redundancy protection for six months once a new mother has returned to work. 

There will be consequences for the employer for failure to comply with the regulations, including liability for unfair dismissal.  

A four-day week

The UK pilot programme for a four-day week being run by business community campaigning platform 4 Day Week Global has now concluded and the results published. The campaign aims to shift the norms of work culture from a 40-hour five-day week to a 32-hour four-day week with no loss of pay. Comprising 61 companies and running from June to December 2022, the results from the UK pilot appear to be overwhelmingly positive. In particular:

• 92% of organisations who participated are continuing with a four-day week.
• Revenue rose by an average of 1.4 % over the trial.
• The number of staff leaving fell by 57% over the trial period.
• 15% of employees who participated in the trial said that no amount of money would make them accept a five-day week schedule in their new job.

4 Day Week Global is continuing to try and persuade companies to adopt the four-day week so we can expect a considerable increase in coverage around this issue moving forward.

Many HR issues

Like all organisations, charities face a plethora of HR issues to grapple with including new legislation but with the right planning and policies, legal risk can be minimised while at the same time enhancing the workplace for employees.

SARAH EDISS, a partner at law firm KRESTON REEVES, looks at the scope, benefits and challenges relating to charities working in collaborative arrangements.

Many charities are taking the opportunity, as they emerge from the global pandemic, to look carefully at their strategy and options for the future. Alongside the increased cost of living which is placing pressure on resources, it makes sense to consider collaboration as one of those options.

Collaborative working describes joint working by two or more charities, on a project or venture to fulfil their purposes. This could relate to any aspect of the charities’ activities which might include: administration, resource sharing, streamlining of costs, fundraising activities, advertising or raising their public profile.

A collaboration can be as simple as charities networking together which can help by sharing contacts within the same area of work or in the same community, which is a really great way to get support from others with similar experiences.

Sharing of information

This can often develop into more formal sharing of information. An example of this could be a charity working in the field of medical support or research – where charities within the same medical sphere across the country or even across the world can share information to help provide quicker, better or more advanced results for their beneficiaries.

In its more formal and possibly complex guise, collaboration can extend to legal agreements to share resources such as accommodation, transport or premises. In some situations, one has seen shared contracts of employment or the provision of a shared finance function.

Some charities may find they have to enter a collaboration with another charity in order to deliver a particular project. This is often where a local authority is commissioning work and will only work with one key partner, but that charity isn’t able to deliver all the required elements of the project and will involve other charities in order to fulfil the delivery. This can also be the case when a charity wants to work abroad and needs the support of a local charity to deliver effectively and efficiently to its beneficiaries.

The Charity Commission encourages charities to look regularly at what more they can achieve for their beneficiaries. Every charity must have at the heart of all decisions how to deliver the best outcome for its beneficiaries with its limited resources. One way this can be achieved is by joint working.

There could be several drivers steering the trustees towards collaborative working. However, trustees should be clear from the outset what they are trying to achieve and what the key motivations are. This can help with the decision making process and avoid complications in the long term.

Varying benefits

The benefits of joint working arrangements will vary. One of the main drivers is often reduced costs – for example benefiting from increased purchasing power of a buying group, or avoiding duplication of support staff costs.

Another opportunity of joint working could be better awareness and reach. Where charities have similar beneficiaries, they can potentially reach a wider number of people. As a result, their marketing and communication budgets can stretch further by working together.

Increased fundraising if another potential opportunity. Often charities worry that they are competing against each other for a limited pot of donations from the public but in fact it is possible to work together to increase the extent of total funds raised. The Disasters Emergency Committee (DEC) is a great example of this. As shown in recent times the coalition of charities working together under the DEC umbrella has raised money to support Ukraine during the current crisis.

One of the drivers, as noted above, could be to share skills and learning. Sharing experiences with others in the sector is likely to allow your charity to deliver improved services to beneficiaries.

Perhaps the main aim of collaboration is to obtain efficiencies. Ask yourself is your charity currently delivering services outside your local area where another charity is better located (and has the same skills) to provide that service?

Your charity might also want to start delivering a new service but does not currently have the capacity or skills to do this alone. Working alongside another, perhaps with a more experienced charity, could make this step towards innovation less daunting.

If you are about to embark on a possible joint venture, there is plenty of guidance available to help trustees and management teams decide whether collaboration will be appropriate for their charity and to guide you through the process of choosing a partner to work with.

As with anything, there are risks involved and relationships can go wrong. It is important to be clear from the outset about the objectives the trustees want to achieve from a joint working arrangement and for them to consider the impact on their charity, its beneficiaries, its staff and reputation.

Barriers to success

Barriers to success should be identified at an early stage so that the management team and trustees can consider how these can be overcome. These can include:

• A lack of adequate communication with stakeholders.
• No stated objectives or evaluation mechanisms.
• Difficulties integrating staff – the cultural fit has not been considered sufficiently.
• A lack of project planning and process management.
• Rushing the process, having different expectations or unrealistic targets.

It is crucial that communication channels remain open at all times. When problems arise, they must be shared with all parties rather than retreating into a defensive mode. Solutions can often be found quickly when there is an open discussion. Also do your due diligence when working with another partner. Can they actually deliver what they promise?

It is also important to ensure any tax consequences are considered. Does the project still fall within the primary objectives of the charity and therefore any income will be exempt from tax. Does the new joint venture give rise to a taxable supply for VAT purposes? These are all questions which your accountant will be able to help with.

Ultimately the responsibility for deciding whether to proceed with a collaborative project lies with the trustees and they should be certain that the benefits outweigh the potential pitfalls. The are some useful key questions for Trustees to ask at the planning stage within the Charity Commission guidance “Choosing to collaborate: helping you succeed”.

Don’t forget that you are not alone; there are resources available to help you. There is a wealth of information on the internet particularly on the NVCO and Charity Commission websites. Please approach your lawyer and accountant for advice too. You may only be moving into this new area of collaboration for the first time, but they are likely to have seen this previously with other clients and therefore can help guide you through the right thought processes.

STEVE MARTIN, the CEO of coaching and consulting company AGILISTIC, writes on making the Agile concept work for charities.

The charity sector has been in a state of flux for years and over the course of the Covid-19 pandemic, charities faced a new set of challenges. According to a recent survey by the Charity Commission, over 90% of surveyed charities in England and Wales experienced some negative impact from the pandemic. Due to months of uncertainty, charities - regardless of their size - are up against challenging times including loss of income, increased need for service delivery, decreased staff morale and volunteer shortages.

As they emerge from the pandemic, charities need to also navigate ongoing technological, regulatory, operational, economic and environmental changes taking place while staying true to their values and making a social impact. If they want to survive and future-proof their operations, charities need to transform to face a changing world.

Being Agile benefits charities

Agile is about proactively thinking afresh, not referring to existing strategies and practices, so as to deliver better outcomes. The concept of Agile has been around for a while but quite often charities dismiss it as just another buzzword of the corporate world that doesn’t have a place in the charity sector seeing it as associated with commercial operations and developing a customer-centric approach.

Charities wouldn’t necessarily consider that they have customers but they do have people who get value from the work they do, so Agile can help charities give their internal and external audiences the best possible value in the most efficient way.

Embracing an Agile mindset and way of working means that charities can focus on looking at processes from a fresh perspective, incorporating a lean way of thinking to help better utilise resources. This is possible because Agile can help organisations and teams to have greater visibility and transparency over everything that is happening across different departments, break down silos and identify areas of improvement.

Agile can help bring people and processes together to create a much more cross-functional structure and empower charities to let go of old practices, create shared purpose and give teams the focus to make better decisions.

Mindset is important

Most charities are proactively look for ways to improve their work but there’s no denying that they’re also facing a pressing need to deal with a climate of austerity and rising demand for their services.

This means that they can often get bogged down by issues which they may feel are out of their hands which in turn can block fresh ways of looking at how they think and operate. Fear of doing things differently is one of the most common blockers for embracing Agile. But let’s face it, change is the new norm which mean that the environment organisations operate in will change regardless of their ability to change along with it.

Due to their often risk-averse nature, charities can miss out on new opportunities and ways of doing things in an attempt to limit risks and often prefer tried and tested methods. A common misconception about Agile is that it encourages a culture of failing fast and learning from it, which can put off charities which feel that failure is not an option.

However, that’s not what Agile is all about. Growth happens when risk is taken and agile ensures that you’re always taking a calculated risk, with a clear strategy and a well-formed execution plan.

It’s true that not all innovation will work but it’s easier to move on and find something that does work when your entire culture and operation is set up in a way that allows it to welcome change and overcome any challenges to be able to thrive. An Agile mindset balances the fear of the unknown with the trust in your organisation’s ability to perform efficiently.

It may be tempting to stick to the “this is how we have always done it” mindset, especially if your charity has been riding a fairly stable wave without any major concerns for the future. But the truth is that every single charity, regardless of its size, popularity or area it operates in, is susceptible to being left behind.

Working collaboratively, thinking creatively, and looking afresh at relationships and resources give you an opportunity to make things better for your people and those who benefit from your offering.

Start at the top

One of the fastest and most efficient ways for a charity to go Agile is to ensure that senior leadership embraces the mindset and invests into making it part of the fabric of the entire organisation.

That’s because in order for Agile to deliver results, it needs to be embedded into the culture and that can only happen when it is driven from the very top and encouraged right across the organisation.

One of the main reasons that it can be hard to introduce Agile lower down in the charity is that when areas of improvement are identified, people can become resistant and nervous because they will see it as a threat to their role whereas when leaders initiate the change, they can reassure staff and ensure they feel engaged in the process.

Given the transparency and freedom which characterise an Agile organisation, leaders must shape a new multi-faceted culture transformation based on trust. It’s about letting go of personal objectives and ego and focusing on delivering the best possible value. Change starts at the very top;

By building a foundation of trust you can motivate your people to work without fear, without judgment and without the risk of being chastised for making mistakes. Because they know that you as a leader have made it clear that making mistakes is OK, as long as it’s seen as a learning experience.

They also know that you are with them, and you are collectively working together and going in the same direction. Once you have made this cultural shift, you can build teams which are truly diverse, empowered and connected and can work as swiftly as possible to deliver greater value without losing track of their purpose.

This way of working frees up leaders to take a step back to look at the bigger picture and focus on strategy which ensure that the charity is fulfilling its mission. This type of ‘servant’ leadership also ensures that leaders are more open to hearing where the problems are, recognise unmet needs and finding ways to appropriately support their people.

Transform your teams

As well as enabling teams to work to the best of their capacity, Agile can have a massive impact on staff wellbeing by allowing people to work at a predictable and sustainable pace. When it comes to managing projects, Agile is based on three distinct sides of a triangle: Scope, Quality and Time: the Agile Triangle.

If scope changes, then so must time and quality. You cannot increase scope and expect the same level of quality in a fixed period. Agile teams feel empowered to negotiate scope to an appropriate level so that it based on their own capabilities and not based on promises made outside the team. Moving at a sustained pace also means that members of the team are more likely to sustain energy and focus.

On top one of that, Agile’s main principle is for teams to regularly reflecting on how they are working together as a team, rather than individually. This helps each member of the team to feel empowered because they can see their work making a real difference within the team encouraging collaborative working and boosting morale.

Eyes on the end goal

On a more practical level, when it comes to deciding which areas should be tackled first within the charity, it’s all about keeping an open mind. Identifying where some of the problems are can be a great starting point but you need to be open to accepting that these may be completely different to the areas you thought needed to be addressed.

The great thing about Agile is that it encourages your take the time on the front end to estimate the return on your investment so you can determine whether it’s worth focusing on a specific area.

Agile may seem daunting but when applied holistically across an organisation, it can empower you to develop the culture, teams and system that will allow your charity to tackle achievable tasks which contribute to your mission without the fear of losing direction or sight of the end goal. When organisations choose to embrace Agile, they are embracing continuous evolvement, making this one of the best ways to work in a culture of continuous improvement.

This can be a gamechanger for charities which are looking to thrive in a fast-paced environment. It's time for the charity sector to let go of past practices, stop trying to fix old models and look to a new Agile future.

Professor CHARLOTTE CLOUTIER of HEC MONTREAL and Professor DAVIDE RAVASI of UCL SCHOOL OF MANAGEMENT stress the need for charities to differentiate themselves from similar organisations and argue that this should be done via the models of identity-refinement and identity-enrichment.

When the word identity is used in the corporate world today, it is usually associated with the image that an organisation wishes to project to the outside world and – as such – is often entrusted in the hands of communication departments and consultant agencies that are employed for the specific purpose of nurturing and maintaining it.

Organisations which equate image with identity, however, fail to appreciate that there is more to identity than savvy communication: many organizations have identities that are deeply rooted in their history and deeply felt by their employees, as well as their stakeholders more generally.

Organisational identity reflects members’ collective answer to the question “who are we?” as an organisation and captures a range of qualities including its purpose, its way of doing things, its history and the values that members share. As such, it is a powerful device – especially for charities – for clarifying and carrying out organisational strategy.

Being unclear about identity

Charities occupy a unique situation where those who benefit from their activities tend to be separate from those who finance them. All too often, the interests and objectives of large benefactors and funders are not exactly aligned with those of the charities they wish to support. Securing their support may require compromise or may push charities – wittingly or unwittingly – in directions they would not have chosen otherwise.

In an increasingly competitive funding environment, the belief that “beggars can’t be choosers” often prevails and charities – especially small ones – will often feel compelled to comply with a major funder’s demands lest they fail to raise sufficient funds to ensure their survival.

Over time, as charities continue to make adjustments to suit these demands, their identity may suffer from mission “drift” or mission “creep” – a situation where a charity has strayed too far from or has lost focus on its core mission by spreading itself too thin, trying to do too much with too few resources, or simply as a consequence of cumulative compromises made over time.

We argue that charities can better manage this problem by becoming more conscious of their organisational identity: what it is, how others perceive it and, more importantly, by understanding which features of their identity are most important to them.

In order to better understand this phenomenon, we conducted research with four Canadian charities which showed that active and regular reflections on organisational identity – declarations and ideas of “who we are” and “who we want to be” as an organisation – can be useful for helping charities decide which funding opportunities to accept, what programmes to pursue, and how to scale up or grow - and by so doing, actively and more deliberately manage the risks associated with mission drift.

Refinement or enrichment

In observing the four charities in Canada, we documented two distinct models of identity development that helped them to differentiate themselves from similar organisations. We termed these distinct models “identity-refinement” and “identity-enrichment”.

Charities pursuing a model of identity-refinement usually articulated their identity in ways that highlighted the fact that they belonged to a specific grouping or category of organisations. For example, one sustainable development charity, we will refer to simply as Earth, began defining itself broadly as a sustainable development organisation, saying in a 2000 annual report that they were “founded…by a group of young people…[who] shared a vision of sustainable development”.

As time, passed, the charity sharpened and refined these claims to clarify their intent and distinguish them from other sustainable development organisations. In 2002, for instance, it revised its mission statement to better articulate its identity as an advocacy organisation which sought to influence not only individuals and corporations but also governments to make “individual and collective choices that are both ecologically and socially equitable”.

Around this time, the charity also developed an Ethics Code that dictated from whom it would and would not accept funds. This statement opened it up – which was unusual, at the time, for an advocacy organisation – to collaborations with business on “concrete solutions” to sustainable development problems – taking on a distinctive “dealmaker” approach to its work that made it stand out from its counterparts.

Increasingly specialist

Charities which “refine” their organisational identities in this way will typically seek to differentiate themselves from other organisations by emphasising the impact that they have or by emphasising their unique perspective as distinct from peer organisations. Over time, they become increasingly specialist.

Meanwhile, charities pursuing a model of identity-enrichment, usually articulated their identities in ways that emphasised the kinds of relationships they wished to maintain with constituents. These charities would go on to differentiate themselves from other organisations doing similar work through the unique assembly of services they offered to their constituents.

For example, a charity, which we will call Meals, was initially founded as a youth led meals-on-wheels “to provide a community, non-profit, food delivery service to persons experiencing a temporary or permanent loss of autonomy”.

Its foundational ethos, however, was not simply to provide meals to needy seniors, but to reach out “to people who were isolated from their own community”, while at the same time “empowering” young people by offering them an opportunity to gain work experience while making a difference in their community.

As it took advantage of available funding opportunities, other activities were added: a housing and job training programme for troubled youth, and an “intergenerational community centre” offering recreational activities to seniors. Not all these activities proved sustainable in the medium term, but contributed eventually to a rethink of the charity and identity of the charity around “intergenerational community building” as an underlying rationale and unifying theme for its activities.

Breaking boundaries

Charities which “enrich” their identities in this way are more likely to break boundaries, sometimes appearing even unorthodox in their approach, as they seek to cater to, build meaningful relationships with, and meet the needs of their constituencies. This is not to say that identity-enrichment, as a model of organisational development, is any better, or indeed any worse, than identity-refinement. Different models will be more appropriate for different types of organisation. What our research shows, more importantly, is that one’s choice of approach has different strategic implications for charities.

For example, organisations which articulate their identity by making mostly category-based identity claims (of the kind we saw made by Earth) should usually aim to follow an identity-refinement model of development. They can achieve this by:

• Committing to epitomising the values that are implicit in their mission in everything they do.
• Prioritising and continually refining the unique qualities that help them to distinguish themselves from other charities committed to the same cause.

Similarly, charities which articulate their identities by making mostly relationship-based claims (of the kind we saw made by Meals) should usually follow an identity-enrichment model of development, which can be achieved through:

• Periodically redefining the scope of their activities to accommodate projects that explore the many different ways they can address the needs of the constituencies they seek to help.
• Deliberately revising the identity narrative they weave through their mission, website and other forms of communication on an ongoing basis, so as to maintain a sense of continuity and evolution in their work in the eyes of stakeholders.

Differences in approach

Of course, the model of identity development that a charity embarks on affects the opportunities it can pursue. Charities following an identity-refinement model of development should seek and take advantage of opportunities that help reinforce their distinctiveness within their chosen category. Opportunities that help them stand out among similar peers, by providing them with a unique angle through which to pursue their cause within the boundaries of the category they have positioned themselves in.

For instance, Earth notably pursued a strategy of promoting “concrete changes in attitudes and behaviours oriented towards ecological and socially equitable choices”, in the belief that even small changes were important for improving sustainability in the long term, a belief few other organisations shared at that time.

Conversely, charities pursuing a model of identity-enrichment can afford to be less selective and more open to a wider variety of opportunities, as long as they contribute to addressing the needs of their focal constituency. This, however, may come at the price of diversifying their activities to the point of making it difficult for funders or other stakeholders to fully understand what it is that the charity does, as they have no clear basis for comparison.

Meals at one point expanded into urban agriculture, a move which helped it appeal to a wider array of donors, but which blurred external perceptions of the charity, requiring that it reformulate its identity once again as an “intergenerational community food hub”.

As they pursue different opportunities, therefore, charity leaders must deliberate on the impact that new activities could have or are having on the charity, and people’s perception of it. They must pay attention to potential divergences between what the charity says it is and what it does, and be prepared to periodically craft new narratives that serve as a basis for reinterpreting and possibly reframing its identity in order to better reflect “what we do now”.

Merging identities

There are also times when organisational identity changes much more quickly and more dramatically than in the models outlined above. The exceptionally difficult circumstances of 2020 and now 2021 have left many charities to face far greater difficulties than they may have expected or prepared for. Thus trustees’ obligation to keep a close eye on their financial position may lead them to consider the benefits of merging with a second charity in order to ensure survival.

The administrative and financial elements of decisions of this nature are for academics of other disciplines to analyse, but considerations of organisational identity should be taken into account as well.

Once a merger is proposed, it should be seen, at least in part, as an opportunity for charities to reflect on their identity and ask themselves which of its features they should prioritise. Research has consistently highlighted the difficulties that organisations face when they have to find a way to integrate different traditions, different outlooks, and find new unifying symbols (and occasionally even a new name).

A smooth merger will rely on making both charities’ constituent members feel like they belong to the new organisation, so that ties are forged across prior divisions. Acknowledging and encouraging collective reflection on “who we are” that includes “who we were” as well as “who we want to be” can be very important to ensuring this.

With this in mind, two charities serving a similar constituency in different ways which are embarking on a merger may choose to communicate a new declaration of identity in relationship-based terms, building a compelling narrative that helps capture what they aim to achieve.

Alternatively, a merger may situate a new organisation more firmly within a category or sector, with its new identity claims marking it out as better than any other organisation working in that same category. These choices are nuanced, but incredibly important. After all, they will dictate the important work a newly merged charity will go on to do.

As with all industries, the charity sector has been hard hit by the pandemic, and so it is more important than ever going forward that charities consider their organisational identity. Keeping a watchful eye over your organisation’s identity will better prepare you and your employees for the innumerable challenges ahead.

KATE PARKINSON and LUCINDA BROWN of law firm BDB Pitmans looks at when and how charities should be defending legacies left to them when claims are made against estates.

Every year in the UK, around £2 billion is raised for charities through legacies in wills, but like various types of other charity income, this vital source has been threatened by the coronavirus crisis. It is hard to predict with any certainty what impact the crisis will have on legacy income in the long term, but in the short term it is expected that legacy income will decrease significantly as the overall economic downturn impacts upon share values and house prices, which in turn will drive down the values of legacies.

Where the legacy derives from an estate against which there are claims, the threat to the legacy is even higher. Legacies to charities are just as vulnerable as ordinary legacies in contested estates.

This article looks at the main types of claims against estates, some practicalities around defending such claims, as well as trustees’ duties and responsibilities when considering what is in the best interests of their charity.

Claims against estates

Claims disputing the validity of wills, claims for rectification of wills and claims pursuant to the Inheritance (Provision for Family and Dependants) Act 1975, can all give rise to the possibility that the legacy to the testator's nominated charity will be eroded or even wiped out altogether.

The following should be borne in mind by charities in contested situations:

• Disputed will claims are “all or nothing claims”: either the will is valid or it is not, and the charitable legacy will stand or fall accordingly.
• Claims for rectification of wills often arise out of negligent drafting where a common argument is that the testator did not intend to benefit a charity, either in full or in part.
• Claimants under I(PFD)A 1975 will argue that all or part of a charitable legacy should be made available to satisfy their claim for reasonable financial provision.

In estates where any of these claims are brought forward, the trustees of the charity must balance their duties to ensure that the charity receives the monies that are due to it against the time, resources and costs that will be incurred in litigating to protect the legacy.

Adverse publicity can also act as a deterrent to charities who are considering defending claims as they seek to avoid the perception that their defence has caused the case to go to trial and that the costs involved are not a good use of charitable funds.

Defending a claim

As such, there are a number of factors to take into account when considering whether defending a claim is the right course of action.

Fairly early on in the claim, following the service of proceedings, the charity will be asked to elect whether it will actively defend the claim or whether it will not do so and will simply allow the claimant and other defendants to fight it out or settle the matter through an Alternative Dispute Resolution procedure, such as mediation. If electing to actively defend, the time limits for indicating this and also preparing the charity’s evidence in response are short and usually not longer than 21 days, so the charity needs to be prepared to act swiftly.

So how far should charities go in response to such claims? Consideration of the following factors will be important.

What is the value of the legacy? Plainly how much is at stake will be the primary consideration. Trustees may wish to conduct an early cost-benefit analysis of the likelihood that the legacy could be returned to the charity in full if the claim which threatens it is entirely unsuccessful, against the costs, time and resources that would be incurred in defending the claim.

Gather all available evidence as to the associations the testator had with your charity – it is not a requirement, but the court is less likely to make an order disrupting the legacy if there is a long history of close association or a good reason why your charity was chosen as a beneficiary.

Be prepared to analyse and summarise in a witness statement why this legacy income is of value to your charity and what projects it will help you to complete in particular.

Agree to mediate the claim wherever possible. Mediation can often be arranged at short notice of a few weeks and offers a cost-effective alternative to costly court proceedings. This method is likely to secure only a proportion of the legacy, but the costs of mediation are significantly lower than the costs of going to trial.

Team up with other charity legatees to share the costs and burden. Elect a lead beneficiary to run the situation.

Consider what funding options might be available to your charity to enable you to pursue the claim if you have insufficient funds to be able to do so but the legacy is significant enough that it is not an option for the trustees to take no steps to protect it.

Carefully document the trustees’ reasons for deciding to defend the claim or not. For example, if trustees are minded not to defend the claim, they would be giving up an asset of the charity and so should be satisfied they have good reasons to do so. Thus they should record those reasons for their own protection in case they are asked to justify the decision.

Trustees’ obligations

All of the above considerations must be carefully balanced to ensure that the charity’s assets (including its reputation) are preserved, in pursuit of the charity’s objects. The Charity Commission guidance in this area is clear, in that trustees have a duty to act in the best interests of their charity which, where necessary, means there is a duty to protect assets belonging to it.

Assets will include the pledged legacy, even if this has not yet been realised from the assets of an estate. As such, if a claim is rightly defended, and the cost/benefit of doing so is proportionate, then trustees have a duty to seek that the last wishes of the testator are observed.

The Charity Commission expects trustees to consider legal action only after they have explored and, where appropriate, ruled out any other ways of resolving the issue in dispute, such as mediation, but charities should not be afraid to assert their rights to legacies.

Legacies form an important part of the income stream available to charities and a decision to actively defend a claim does not necessarily carry with it adverse cost consequences providing the charity acts reasonably in its defence.

A cost/benefit analysis will always be essential but charities should be comforted by the fact that the Civil Procedure Rules allow the charity to take a diplomatic approach to help avoid any perception that the charity has forced the matter to go to court.

If a charity files a neutral defence asserting the intentions of the testator in relation to the legacy and then proposes mediation at an early stage, this will limit costs and, if successful, achieve a negotiated solution and ensure maximum recovery of the charity's costs from the estate.

GARY CATTERMOLE, director of THE SURVEY INITIATIVE, discusses how to run an engagement survey right across the charity.

One of the challenges facing every organisation at present is the recruitment and retention of staff, and also, in the case of charities and community projects, of volunteers. Knowing how involved or engaged with their work your people feel is key to retaining them and moving your organisation forward. So how do you measure what can seem like an elusive concept, and what should you do with your findings?

The most straightforward way to find out what your team are thinking and feeling is to ask. Measuring their level of engagement – how involved and attached to their work they feel – is something of a specialist discipline. More and more industry sectors are starting to use engagement surveys on a regular basis and this is now being adopted by the charity sector. Employee or volunteer engagement surveys in charities can take a number of forms.

If you only have a handful of people in your charity team, engagement research might be as simple as having a conversation. Of course, it may involve hearing some uncomfortable truths as well as some encouraging feedback.

Frank interaction difficult

However, not every employee or volunteer is brave enough to tell you what they really think, and this sort of frank one to one interaction relies on there already being a fairly good relationship. But in instances where that rapport hasn’t been established, and especially for charities with more than a few staff and volunteers, individual chats simply may not be practical. So, what can you do?

The most accurate way to measure engagement is by using what is known as an employee engagement survey. This can be applied equally to volunteers as well as paid staff, although you may need to ask slightly different questions of each set of people, as their circumstances and experiences may differ widely.

There are several approaches that can be taken including a deep dive traditional engagement survey, a “pulse” survey and an “always on” survey.

As the names suggest, the “pulse” survey is run at intervals for a set period of time, so you can “take the pulse” of your charity’s engagement or morale.

In contrast, the “always on” survey is left running continuously, so that people can voice their opinions at any time.

The deep dive engagement survey is usually an excellent starting point for charities to get a line in the sand of where engagement levels are. Pulse and always on surveys are then used to track and monitor progress. Questions can be a simple “yes” or “no”; maybe based on a scale against which people are asked to judge their opinions; or you may need to ask some open-ended questions which encourage feedback in the respondent’s own words.

The response rate to a pulse survey is usually higher and more evenly spread across the charity than an always on survey, and so provides more accurate data to observe any trends. Respondents are given a set amount of time in which to provide their answers to a set of questions, with a cut off deadline.

Depending on the issues that you want to address or investigate further, you can decide how far apart your pulse intervals should be. Urgent issues will probably require more frequent follow up to measure progress.

Tailored follow-up

However, many charities find that, once they have conducted a successful deep dive survey, regular pulse surveys (commonly six monthly) will be sufficient to track and monitor progress. Follow-up can be tailored to your charity’s specific needs.

A response rate of 40% is not unusual for engagement surveys but, with the right approach, one can achieve in excess of 80%, which happens fairly routinely. The advantage of this is, of course, that you have more data to analyse and can obtain a much clearer picture of how your teams are actually feeling.

One of the best ways to achieve a higher response rate is with careful preparatory work. For a start, you need to communicate to people that the results of the survey will be taken seriously and will result in progress. When people take the time to answer a set of questions, they have a right to expect that their opinion will matter.

So, if you don’t intend to use survey findings to make positive changes, don’t bother to run the survey. Ignoring opinions that you have asked for can be worse than not asking for opinions at all.

Organisations which make positive steps towards progress, based on survey results, usually see a higher response rate on their next survey, creating something of a virtuous circle. The opposite is also true: the less you genuinely listen to opinions, the less they will be offered, leaving you with no clue as to why people are dissatisfied and why some of them choose to move on.

Crafting questions carefully

Just as importantly, you need to craft your questions carefully. Irrelevant questions, or ones that miss the point, will lead to incomplete answers and/or a rapid decline in responses in future surveys. The best way to find out what to ask people is to talk to them.

Most line managers or supervisors have a vague idea of what bothers or engages their team. However, most have no way of judging how deep or widespread that feeling is, especially in an organisation with a significant geographic spread (regionally, nationally or abroad). Talking to a small focus group, or even to a few key team members, can be very enlightening. It can guide you towards the questions that you should be asking, to make sure that they are both relevant and at the heart of people’s concerns.

While you do need your questions to be relevant and tailored, you might not need them to be exclusive. It can be helpful to ask questions which have been asked elsewhere, even in commercial companies, as these can show you how you are doing compared to other organisations and sectors. This ability to benchmark your team’s engagement can be invaluable. Not only can you flag up and act to head off problems, you can also discover that you are doing better than you thought.

It is essential to encourage responses from every level of the charity from the board of trustees to the front line – both paid staff and volunteers. Naturally, in the third sector, this should involve both paid staff and volunteers. Your survey should be available to complete online anonymously, so that people feel free to give frank and honest responses.

It should be open for responses for a set time, so that the data gathered is a genuine snapshot of a distinct time period, which can be compared with responses from later surveys as progress is made. Surveys can be run every few months, or annually, whichever suits your aims best.

Issuing paper copies

It may well be the case that not everyone in the charity will have access to smart technology. This need not be a barrier to them. Paper copies of the survey can be issued to those without access to your survey portal, and these can be sent anonymously to your survey provider, using a prepaid envelope. Handwritten responses can then be transcribed and added to the digital data ready for analysis, so that you can gather as much representative data as possible.

Don’t make your survey too long. It should take people no longer than a few minutes to complete. People like to be asked their opinions, but few like the feeling of being quizzed or interrogated. Again, response rates can fall dramatically when surveys are simply too long.

Once the data has been carefully analysed, you need to act on the results. Ideally, you should disseminate the findings as widely as possible. Some organisations communicate the findings to the board alone, while others make them available to area managers or team leaders as appropriate. What you make available, and to whom, may vary according to what you have asked and what issues your responses have revealed to you.

Some findings may necessitate further investigation so you may delay communicating them. You may choose to make the survey results available to the entire charity. This level of transparency does foster trust and engagement, but only if you then act on the findings.

Addressing issues quickly

If it becomes apparent there are issues you need to address or areas of improvement to be made, the sooner you can make progress on these the better, keeping your people as informed as possible. When people see that you are listening and taking action, they are far more likely to be loyal and to continue working with you.

Used correctly, employee – or volunteer – engagement research can be a valuable tool in retaining your people and building your charity’s teams.

CRAIG SWALLOW, CEO of GPS tracking company VISMO, discusses addressing the duty of care which charities have to their home workers and field workers based at home.

The global outbreak of Covid-19 has changed the way charities operate, with staff and volunteers quickly adapting to working from home [WFH] where necessary. WFH throws up challenges to charities, however, even where staff [paid and volunteers] seem to have settled into what is for many a new way of working. A prime challenge is meeting duty of care obligations.

Duty of care? Duty of care is, in general, about workers’ wellbeing and welfare and, related, compliance and good practice by the employer. All employers have a moral and a legal obligation to ensure that all their workers are fully protected from personal physical and/or emotional harm, either on or away from the employer’s premises. But charities in particular have an ethical responsibility if only because of the ethos of being a charity.

Measures will already be in place to reduce and manage risks to staff and volunteers in a charity’s office environment. However, with WFH, the risks increase because charities no longer have easy and visual control over the working environment. Thus charities still need to protect and support their workers.

Rethinking work procedures

It’s no surprise that in such challenging times they have had to quickly rethink their working procedures and practices. Have some overlooked aspects of duty of care?

Safety of workers encompasses both their physical and mental health. As far as physical health is concerned, thought should be given to ensuring workers have the correct equipment at home, if they don’t already. Included can be the simplest of things such as an appropriate chair - set to the correct settings, if the chair has settings - to reduce the likelihood of physical strains.

In relation to supporting workers with their mental health, charities should ideally ensure they have regular contact with them in order to check their wellbeing and reduce the risk of any employee feeling isolated and perhaps suffering the consequences. Monitoring could be through scheduling regular phone calls or by video chats or other method via an app.

External risks

External risks – risks outside the home or office – are brought into focus where a lone worker visits an individual they don’t know, as part of their work, or when they visit hospitals or other buildings - again, as part of their work. Ways to help lone workers would include an app that has a check-in/check-out function which alerts a charity’s admin to the worker entering a property they don’t know and/or meeting someone they don’t know or don’t know very well; or simply meeting an individual they feel uneasy about.

Such a function could include a time limit – e.g. 30 minutes - set for a meeting. If the worker doesn’t check-out via the app on their smartphone after 30 minutes, the charity’s admin would be alerted automatically and set in motion steps to help the worker. In tandem with the function, or not, a panic button on the app could be activated by the worker if they are, or feel, in danger.

In addition, this kind of app can show the location of lone workers who are working outside the office or home -when they are working in or near at-risk areas. “Geo fences” could be set up by a charity’s admin to let the worker know when they have entered and left such an area.

Exact locations

Giving exact locations of individuals as they do, GPS-based apps on phones can be very useful in at-risk and extremely at-risk situations and can be used for the same purpose. Duty of care covers people working abroad as well as in the UK.

Although estate agency worker Suzy Lamplugh was not an employee of a charity, her case – she went missing, presumed murdered, after agreeing to show someone around a house - has echoed down the years.

While it has become the “new norm” for many employees to work from home, in order to meet government regulations and help stop the virus from spreading, Covid-19 still does, as we know, spring up expectedly or unexpectedly in cities, towns, villages and regions - as do other emergencies.

In cases of local outbreaks of Covid-19, severe weather or industrial accident, charities will need to quickly contact their workers in the affected locality. App-based solutions can help to by sending alerts, via a mass notification feature where appropriate, containing critical information to those at risk, whether they are at home, in an office, or elsewhere, including travelling between places.

Work stresses

Some charity workers have to deal with highly stressful situations and face very challenging situations on a daily basis. Examples include dealing with emotionally charged conversations on their phone or, virtually, via tablet or computer, all the time up against deadlines and projects to be started or completed. WFH, as in working in the office, can get stressful and lead to health problems – physical as well as mental.

If they don’t already, charity team leaders or managers need to understand issues like these which workers can face when WFH and try to resolve problems. To help both manager and worker, app-based solutions allow discreet two-way dialogues, starting with the affected worker raising an issue or query with the appropriate team leader or manager.

An approach like this enables the worker to feel more confident and less embarrassed or stressed about discussing problems, and seek help if necessary. It’s useful for the team leader or manager because it’s a quick route to knowing issues they may not have been aware of.

WFH brings benefits to our personal lives. Many workers experience an improved work-life balance, which can be highly influenced by less commuting stress. This can significantly increase a worker’s spare time in which they would otherwise be commuting; and saves them money. However, some can feel lonely, isolated and less motivated, even as they appreciate some aspects of WFH.

Although employees can have an increased sense of wellbeing when working from home – and be able to manage their time more effectively while enjoying a sense of freedom - they will need to be monitored one way or another, if “only” for reasons of their mental health.

Understanding workloads

In terms of a charity’s perspective on home working, the main priority should be the duty of care to the employees. With staff remotely working, it is difficult for managers to keep track of an employee’s workload and daily tasks, and perhaps understand workloads in the new WFH world that many people inhabit. One way to overcome these issues would be, again, via an app, whereby the employee quickly updates tasks that are ongoing or completed.

As stated earlier, charity workers can be dealing with highly emotional and stressful situations on the phone - or through other means, including face-to-face. As ever, they will want to feel protected or understood. Many charity helplines are now being handled from home, which can be mentally and emotionally challenging for workers. Even with virtual support from a charity’s HR people, dealing with the situations on a daily basis can significantly impact workers’ wellbeing.

A plus for charities is that WFH can impact their financial situation positively. Many are struggling for funding while relying on events or donations for income. However, as we know, the pandemic has put nearly all events on hold and making other fundraising more difficult. WFH can reduce the need for office space and reduce operating costs, hopefully freeing money up to help manage day-to-day expenses.

More flexible approach

In the long run, many charities may decide not to bring employees back into the workplace full or even part time, because of cost savings and the increased efficiencies of WFH. Another work solution for charities to consider – but some have been doing it for years - is a more flexible approach to working environments to incorporate a mix of working in an office environment and home working.

Ensuring charity workers are supported and protected is key to a happy and productive workforce. Implementing a solution that monitors employee wellbeing, sends alerts if required and has the ability to send mass notifications in case of an emergency could be vital in protecting employees and meeting duty of care obligations.

JAMES TAIT, an employment partner at law firm BROWNE JACOBSON, looks at when, during recruitment or employment, charities come across criminal conduct.

Employees with criminal records, or those who have been accused of, or charged with, criminal offences, may present particular risks for employers within the charity sector. Let us take a look at some of the more common questions that arise.

CAN OUR CHARITY EMPLOY SOMEONE WITH A CRITICAL RECORD? Potentially – but this will depend upon what the offence is and what potential impact it could have on the proposed role for the individual. Particular care should clearly be taken where the role involves working or interacting with more vulnerable members of society, or dealing with charitable funds.

CAN WE REFUSE TO EMPLOY SOMEONE WITH A CRIMINAL RECORD? This will depend on whether their conviction is spent or unspent, and whether they are applying for an excepted occupation, profession or office (such as roles working with children or vulnerable adults).

Spent conviction

If the conviction is spent, then unless the role is for an excepted occupation, profession or office, employment cannot be refused on this ground. Where the role is for an excepted occupation, profession or office, employment may be refused, and in certain circumstances should be refused.

If the conviction is unspent, then a charity employer may refuse to employ the individual. However, it would be usual to consider whether the conviction actually affects the role for which they are applying.

WHAT IF SOMEONE DOESN’T DISCLOSE A CRIMINAL CONVICTION? Again, this will depend on whether their conviction is spent or unspent. If their conviction is spent, then they are under no obligation to disclose this unless they are applying for an excepted occupation, profession or office.

If the conviction is unspent (or is spent but they are applying for an excepted occupation, profession or office) and the employee/applicant does not disclose this in response to a direct request, then an employer may wish to take further action if either the nature of the conviction affects the role that the individual is carrying out (or is to carry out), or if concerns over the employee’s honesty affects their suitability.

Individual circumstances

It is suggested that employers seek advice on the individual circumstances, particular if the individual has been employed for some time before the issue comes to light.

WHAT IF A CHARITY EMPLOYEE IS ALLEGED TO HAVE CARRIED OUT A CRIMINAL OFFENCE IN THE COURSE OF THEIR DUTIES? DOES THE EMPLOYER NEED TO AWAIT THE OUTCOME OF THE POLICE INVESTIGATION OR ANY SUBSEQUENT COURT CASE? Not usually.

However, if the employer is proposing to dismiss for conduct-related reasons, then the same usual principle will apply: it must have a reasonable belief in the employee’s guilt, it must have reasonable grounds for that belief, and it must have carried out a reasonable investigation. The mere fact of a police investigation would not be sufficient, nor would a decision to charge.

But where the offence occurs in the course of their duties, the employer is likely to have access to further evidence on which to base its decision.

In some cases, it may also be appropriate to “clear” such action with the police first, so as not to prejudice any ongoing investigations.

WHAT ABOUT OFFENCES OUTSIDE WORK? CAN CRIMINAL CHARGES FOR AN OFFENCE OUTSIDE WORK SUPPORT A CONDUCT-RELATED DISMISSAL? In limited circumstances, yes. However, the offence must be relevant to the nature of the work in question. For example, fraudulent offences may well be wholly incompatible with a role dealing with charitable donations. This would also be particularly relevant if the role in question affords the employee the opportunity to commit offences of the type for which they have been charged.

Sufficient evidence

Where the offence takes place outside work (and the individual has not been convicted), the employer may not, however, have sufficient evidence available to justify a conduct dismissal. An exception to this may be where another employee is in some way involved – perhaps as the alleged victim – and so the employer is able to investigate the allegation.

WHAT ABOUT REPUTATIONAL DAMAGE? If there is insufficient evidence available to support a conduct-related dismissal, the employer may still wish to take action on other grounds. Although “innocent until proven guilty” underpins our criminal justice system, this does not mean that an employer is required to continue to employ an employee who is charged with a criminal offence where, if found guilty, this could damage the charity’s reputation.

This was precisely the position in the Employment Appeal Tribunal (EAT) case of Lafferty v Nuffield Health. Mr Lafferty was employed as a hospital porter in Glasgow and his role included transporting anaesthetised (and therefore particularly vulnerable) patients to and from theatre.

He was charged with assault to injury with intention to rape. Nuffield Health took the decision to dismiss Mr Lafferty, deciding that the risk to its reputation of continuing to employ him was too great. The Employment Tribunal concluded that this dismissal was fair and its decision has been upheld on appeal.

Acquittal outcome

This does not mean that it will always be fair and reasonable to dismiss in these circumstances and the EAT readily acknowledged that it had found this case to be a difficult one – perhaps made more so by the fact that Mr Lafferty had in fact been acquitted after the original Employment Tribunal hearing and before the EAT.

WHAT ADDITIONAL FACTORS SHOULD BE CONSIDERED IN “REPUTATIONAL DAMAGE” CASES? There is indeed a risk of injustice to employees if employers rely on charging decisions where the employee is contesting that charge and has not yet had an opportunity to fully challenge those allegations.

Nevertheless, in line with the previous guidance given in Leach v Ofcom, the relevant test when considering an unfair dismissal claim is not whether the employee has suffered an injustice; it is whether the conduct of the employer towards him was fair.

The extent to which an employer can challenge information provided by the police, the CPS or another official body may well be limited, and employers will often not have the expertise of resources to realistically test the evidence provided. But this does not mean that they should not take a critical view – some inquiry is required.

However, where the employer is not trying to rely on an assertion that the individual is guilty of the criminal misconduct alleged – but rather is taking action because of the adverse effect that the fact of the charge could have on its reputation - the investigation will be justifiably more limited.

Particular scrutiny

In the Lafferty case, it was held that the employer was entitled to take into account the particular scrutiny that it was facing within the charitable sector as a result of recent conduct in relation to employees engaging in sexual offences. It was also entitled to take into account the risk of reputational damage which would arise out of a suggestion that the employer had continued to place vulnerable patients at risk.

Alternatives to dismissal should be considered. The employer in Lafferty considered that the only other option potentially available to it was suspension. Given that this would involve full pay, and would be open-ended as Mr Lafferty was unable to provide any timescales as to when his criminal trial would take place, Nuffield Health concluded that this would not be a reasonable expenditure, given its charitable status. This decision was held to fall within the band of reasonable responses open to a reasonable employer.

It is worth noting that the employer did, in this case, confirm to the employee that if acquitted, he could return to work on the same terms and conditions and with continuity preserved. His post was held open in the interim, covered by temporary staff. Mr Lafferty did in fact return to his role after his acquittal.

Please also remember that, unlike gross misconduct dismissals, an employee who is dismissed for reputation-related reasons will be entitled to be paid notice.

WHAT ABOUT OFFENCES COMMITTED ABROAD BY EMPLOYEES OF INTERNATONAL CHARITIES? DOES IT MAKE A DIFFERENCE IF THE HOST COUNTRY DOES NOT PROSECUTE? Assuming the employee is UK based and was travelling at the time, then whether or not the offences are committed abroad or in the UK does not affect the principles set out above and so the determinative factor would not be whether or not the host country decided to prosecute.

However, practically speaking, it is likely to be considerably harder for the employer to be able to access information in respect of any ongoing investigation.

Wholly abroad

Where the charity employee is wholly based abroad, consideration would need to be given to jurisdiction, and which employment laws were applicable, before decisions were taken in respect of terminating employment.

WHAT HAPPENS IF THE EMPLOYEE IS DETAINED IN CUSTODY? There may be also additional issues caused if the employee is detained (whether in the UK or abroad) during the investigation or following a charge being made as a prolonged absence could provide the employer with additional grounds for terminating employment.

This will always depend upon the circumstances of the case – such as the likely length of the detention and whether any such absence can reasonably be sustained by the employer – and so advice in respect of individual circumstances should be sought.

AMANDA BRIGGS, head of charity at property consultancy BRUTON KNOWLES, points to the complexities of property management for charities.

Most charities have a connection to property ownership - whether it be a generous donor who has bequeathed property, a lease on premises from which to operate, a string of investment properties, or retail premises occupied for the purpose of raising funds to support the charity.

With the complexities of property management, hiring a property professional to offer advice and guidance on the multiple issues relating to property which can arise would be beneficial for trustees, allowing them to feel less exposed to significant risks.

However, this would require an additional cost, eating into the precious funds that would otherwise be spent on the charitable purpose. Trustees are therefore tempted to save money by taking decisions without obtaining advice.

But is that a false economy? In avoiding taking advice, what risks does a trustee face?

Consider some of the common issues relating to property ownership that charities might come across on a daily basis.

Selling or letting

If the charity’s governing document allows the charity to buy or lease a property, then the trustees must ensure they have secured the best deal for the charity in any proposed sale or letting. The Charities Act 2011 requires that written advice from a qualified surveyor must be sought (unless the lease proposed is less than seven years).

The property identified to be sold or let must have been openly marketed for sale to ensure that best value can be shown to have been obtained. Any trustee not following these rules is opening themselves to a possible challenge.

Of course, there are exemptions to these rules that trustees can explore, but if selling to a connected party, or below market value or if the charity wishes to ignore the advice of the qualified surveyor, then formal Charity Commission approval will also be required.

Obtaining a qualified surveyor’s report will give the trustees peace of mind that the action they propose is right in property terms.

Using surveyors to sell property on behalf of the charity also means that responsibility for matters - such as demonstrating best value has been obtained, the property has been fully marketed, complying with money laundering legislation and undertaking identity checks of potential purchasers - will be passed to the appointed agent, shielding the trustees from the responsibility.

Organised criminals

Given that buying property is a common method used by organised criminals to launder proceeds of criminal activity, this is a very real responsibility and failure to undertake such checks can lead to significant fines.

Similarly, for buying property, the trustees must be able to demonstrate the price proposed to be paid is fair, that it is in the best interests of the charity to acquire the property and that all the obligations of ownership - including any restrictions on title, on the lease or in planning terms - are fully understood before taking ownership. Without specialist advice there is a risk that decisions taken can be challenged or onerous property can be acquired.

If taking a property by lease rather than outright ownership, there is the added complexity of negotiating the lease terms. It is essential to avoid undue liability falling to the charity. The lease is clearly a negotiation between the landlord and the tenant on all matters relating to the occupation of the property and, as such, it is essentially market driven.

In a strong property market where landlords have queues of potential occupiers for their premises, the lease clauses will favour the landlord as alternative tenants can easily be found. In a poor market where landlords are faced with rental voids, or costs of vacant property, they may be more open to occupiers’ demands. In this way liabilities such as dilapidation and repair can be limited, break clauses inserted, and other terms drafted to suit the occupier.

Bargaining position

It is essential that this bargaining position is understood at the outset of a negotiation, so it is therefore imperative to seek trusted, market based property advice. Having clarity on the charity’s “must haves” in any negotiation allows a property adviser to negotiate to best effect. Landlords are currently very concerned about voids – especially in their retail portfolios, so are willing to consider changing leases to secure good quality tenant covenants. Charities need to take advantage and drive hard bargains.

When taking property for investment purposes, the need for market related advice is clear. Significant risk is attached to owning property as an investment, as occupying tenants can go into receivership, leaving rental voids and significant unexpected liability for the trustees. Taking advice on the lease terms, covenant strength and the market trends in the vicinity will ensure the trustees are acting in the best interests of the charity and with the benefit of specialist, independent advice.

Business rates

Once in ownership or occupation of property the complexity does not end. Possibly the highest expenditure relating to most commercial property after staff costs (and rent if a leased property) are business rates. The rates liability is based on the Valuation Office calculation of a hypothetical rental value of the premises, known as a rateable value.

Revaluations are undertaken on an irregular basis and look at the market evidence at that date. The most recent revaluation was undertaken in 2017 with a valuation date of 1 April 2015. Charities and community amateur sports clubs receive a mandatory charitable rate relief of 80% if a property is used for charitable purposes. A further 20% can be applied for and given at the discretion of the local authority, although rules do vary from authority to authority.

Without professional advice, many charities are missing out on business rate relief and consequently overheads are higher than necessary. Even if a relief has been claimed, sometimes the valuation itself can be challenged and a further reduction effected, in some cases removing the liability altogether.

Legislative compliance

Further occupational liabilities that fall to the trustees as owners or occupiers include property maintenance, ensuring compliance with fire safety regulation, asbestos regulation, legionella testing, health and safety regulation, equality legislation, energy performance regulations, electrical appliance checking regulation, to name a few.

Residential premises attract additional regulations and include annual gas safety checks, fire appliance checks, EPC certificate, compliance with the Fit for Human Habitation Act, as well as regulations concerning the way in which landlords hold deposits and implement service charges. Further regulation will apply if the property is a house in multiple occupation (HMO). Evidence of compliance will be required in order to avoid fines or prosecution.

Property owners or occupiers need to have good data management systems to record when inspections have occurred and set reminders for when future inspections are due, to avoid running the risk of fines or worse.

Rent review

Even when the lease is in place and all the occupier’s responsibilities have been satisfied there is the periodic rent review provision.

The charity might be either the landlord or the tenant, but in either case careful consideration needs to be given to the terms of the lease at rent review. Some leases allow for upwards or downwards reviews, so careless triggering of a rent review clause may cause unwanted results.

Market knowledge is essential to inform the rent review process as, unless index linked, rents are usually calculated by reference to transactions involving similar properties. Remember, the rent is being agreed until the next rent review period, so even small annual reductions or increases can multiply into bigger savings or costs when looked at over the period to the next review.

Trustees should therefore ensure they have access to good market knowledge at rent review and lease expiry, as well as advisers with a thorough understanding of the Landlord and Tenant Act 1954 if the lease in place is covered by its provisions.

Strategic matters

So, having made sure the lease is well negotiated, the terms are fair and the property inspections are up to date, does the duty to do the best for the charity end there? No, I’m afraid not. Property owning charities must then ensure they keep their eye on what is going on in the surrounding area, particularly with regard to the statutory Local Plan which will go through periodic review.

As a consequence of such review it is possible that the property will have potential development value, or will be affected by development proposed in the vicinity. Going back to one of the main duties of a trustee – to manage the charity’s resources responsibly – if development potential exists then it would be sensible to be aware of this in order that opportunities to secure additional value can be exploited.

Property owning trustees should therefore actively interact with the Local Plan process in each property location, be aware of proposals for development and respond to calls for sites that might enhance the value of property assets.

Annual valuation

Charities may be required to provide annual valuations of their property assets for financial statements under the Charities SORP Regulations FRS102. These are usually formal valuations that require to be undertaken by RICS registered valuers under the auspices of the RICS “Red Book”. Whilst a seemingly expensive exercise they provide an excellent opportunity for the selected adviser to review many matters raised in this article, making the most of the single inspection.

Considerable responsibility

In summary, owning property is a considerable responsibility and potential liability as well as a significant asset. It is imperative for property owning charity trustees to ensure they access market focused, specialist advice, to avoid costly pitfalls. This way property can be a true asset, helping to deliver the charity’s core objectives.

HELEN BOWCOCK, chair of AIR AMBULANCE KENT SURREY SUSSEX (AAKSS), describes how a thoughtful and additionally resourced governance approach enabled a new and valuable dimension in the relationship between the charity’s staff and former patients or relatives which safeguarded the emotional interests of all those involved.

Air Ambulance Kent Surrey Sussex (AAKSS) is a helicopter emergency medical service which operates out of Redhill, Surrey and Rochester, Kent. We serve a population of 4.7m people plus those who travel through the area. Our crews of pilots/co-pilots operate three helicopters and fly 2,500 missions a year with on-board medical assistance provided by doctors and paramedics. Of the more than £11m needed to sustain the service each year, 92% is raised by public donation and fundraising with the remaining 8% provided by the NHS.

As an independent charity delivering pre-hospital emergency medicine, AAKSS is accountable to five principal regulators including the Charity Commission, Care Quality Commission and, perhaps less predictably, the Gambling Commission. A successful lottery accounts for over 50% of our income and a CQC inspection conducted last year provides a glowing account of outstanding patient care.

A governance review could appear – and perhaps has appeared - as an attempt to fix what isn’t broken given that we are considered a leader in our field and have benefited from a relatively secure financial position. However, for the current board of trustees, the imperative to diversify our income streams and standardise safeguarding across the charity has become increasingly urgent, not only from the perspective of risk but also of values.

Caring is one of our core values and a considered approach to what this means in the context of pre-hospital emergency medicine raises some important ethical and organisational implications.

Potential income

Our staff care deeply about patient outcomes. However, the clinical involvement of doctors and paramedics with the patient is an intense and relatively brief one and often they will never know what happened following handover at the receiving hospital. It is clear that a significant number of patients want to express gratitude to the people and organisation that, in their view, saved their lives. This gratitude represents considerable potential income.

Strong evidence from the United States suggests that, when appropriately stewarded, this expression is beneficial to both the patient and to those who provide care. Sadly, not all patients survive and bereaved relatives care that all that could have been done was done, and some feel the need to meet those present in their deceased relative’s final moments.

One of the challenges of pre-hospital emergency medicine delivered by a charity such as AAKSS is that normally there is no formal mechanism for maintaining a dialogue with patients and relatives. A relatively small proportion find their way back to us and the “base visits” which feature prominently on our website tell moving stories of patient and crew reunions. In light of the evidence of the emotional benefits of maintaining this connection, our digital strategy including our website design, will optimise opportunities for former patients and relatives to get in touch.

A newly created patient liaison role is intended to provide specialist expertise to manage these important relationships. It takes into consideration both the nature of care in this context and the nature of risk, and reinforces the need for specialist skills and for a holistic approach. This extends to the safeguarding and care for our own staff in relating to people who have experienced major trauma, including life changing injuries, and bereavement.

Emotional reunions

Reunions with former patients or relatives can be emotional for the crews and, given that they take place at an airfield where the helicopters are based rather than in a hospital, appropriate boundaries and safeguards need to be in place. As one highly experienced paramedic pointed out, the reunion can close a loop for them too and reunite them with people they feared would not survive.

The patients themselves may be unconscious but the crew members are acutely aware of what have often been harrowing events. They need to make judgments about how much they should share and how involved they want to be in a visit, if at all.

In a culture of continuous improvement in which our teams take enormous pride in delivering outstanding patient care, the creation of the patient liaison role represents an incremental step in further developing the nature of care provided. In this we have taken notice of the approach of our peers, notably the London Air Ambulance, in not limiting the caring relationship to the pre hospital period but to think much more holistically about what it means.

This could include signposting former patients to other services or establishing peer relationships with others who have experienced major trauma.

Of primary concern in all of this is our commitment to ensuring the physical and emotional safety of people who have been through a major trauma and may have suffered life changing injuries or bereavement. Given that our crews are treating the most sick and seriously injured people, patients themselves often have no recollection of events but may feel a need to know what happened.

Meaningful way

Significantly, the patient liaison role needs to respect their desire to give back to the charity in a meaningful way and to ensure a sense of belonging, assuming that it is part of our duty of care to do so. Many people are unaware that air ambulance services are delivered by charities and a very common response is a strongly felt desire to raise money, both by donating directly but also by using networks to achieve greater effect.

Over the years many of our volunteers have come forward because they have been touched personally by the charity and are given roles within our offices, helping with the administration of our fundraising or going out into the community to give talks.

However, the increased scrutiny of fundraising practices within the charity sector with safeguarding as its dominant theme has necessitated a hard look at freedoms that, in the past, have been taken for granted.

Our safeguarding review of fundraising has resulted in much tighter recruitment processes for volunteers including consideration of DBS checks and placing restrictions on public facing roles which may include entering schools. It has also prompted consideration of how we create meaningful engagement for former patients and relatives who may not necessarily fit existing volunteer role profiles.

Two important additions to our board of trustees are providing further enlightenment for our considerations of the relationship of care. In an open recruitment process, one of them began his application with the words “this charity saved my life”. Once recovered he insisted on paying for the cost of the mission that saved him and took the opportunity to join the board as soon as it became available.

Patient advocacy

The other new trustee is a very senior clinician who has been a leader in the Surviving Sepsis campaign and has first hand knowledge of the power of patient advocacy following trauma, as well as a strong commitment to ensuring emotional safety in acute medical situations.

These improvements to our governance and consequent organisational changes have required balance and real thought about what it means to be caring. Recognition of the need of former patients and relatives to express gratitude takes into account the concern of staff not to appear to be “ambulance chasing” or to take advantage of people at a time of vulnerability.

Care for their emotional safety needs to be balanced against the welfare and emotions of our staff, including of course the clinical and operational crews. Current anxieties about safeguarding in the charity sector need to be balanced against the good will and trust that former patients and relatives feel for our charity and that we wish to honour in return. It is not always an easy balance to achieve but our governance review has produced new opportunities for meaningful engagement and for philanthropy.

KATHERINE PYMONT, a senior associate at law firm KINGSLEY NAPLEY, sets out how clients should address the problem of fraud, including having a proper anti-fraud policy.

Prince Harry’s charity Sentebale is said to have become a target for “cyber crooks” who are “making sustained attempts to exploit the charity…by luring potential supporters into making donations to bogus online accounts”, according to the Daily Mail.

Fraud not only impacts hugely on the vital work charities do but can also be extremely damaging from a reputation management perspective. The estimated annual fraud loss in registered charities in 2017 was approximately £2.3 billion and more recent indications suggest that this figure is only set to increase.

Fraudsters are becoming ever more sophisticated in their methodology and whilst we are still seeing regular instances of internal fraud, such as misuse of charity money, and external fraud, such as false invoicing and fake fundraising, there can be little doubt that cyber fraud is on the up.

The Department for Media and Culture estimates that in the last year 22% of charities have experienced cyber security breaches with the most common forms of attack phishing emails, others impersonating an organisation online (as is reported to be the case with Sentebale) and viruses or other malware, including ransomware (a form of software preventing effective control of data stored on a device until a ransom is paid).

Experience shows that prevention is the best cure when it comes to any kind of fraud. Charities, irrespective of size and stature, need to prioritise reflecting on their own potential exposure and working to not only protect against fraud but also to have a plan in place to ensure an effective response if fraud is detected.

Risk assessment

The first step for all charities is to conduct a thorough risk assessment. Whilst any such assessment would be specific to each organisation this would be likely to include considering which of the charity’s activities leave it most vulnerable to fraud, the level of existing fraud awareness within the charity and whether the charity has an appropriate anti-fraud policy in place.

A charity’s potential vulnerabilities are far ranging but some of the most common include reliance on multiple volunteers with a high turnover (who are therefore difficult to closely monitor), cash-based fundraising, the numerous complexities involved with international work (see further below) and technological advances such as mobile banking.

Something also often seen is one individual at a charity having sole charge and responsibility for all financial processing and reporting. This clearly leaves the charity unnecessarily exposed. The introduction of internal controls to ensure adequate checks are in place for making and authorising payments, or rotating responsibility for certain tasks in high risk areas to ensure no one person has control for an extended period of time, are relativity straightforward ways to alleviate this risk.

Overseas projects

Project funding, particularly abroad where there might be inadequate legislation surrounding bribery and corruption, is another significant risk area. It is of course vital that funds hard- earned for a particular cause end up in the right place. Without carefully monitoring, and the appropriate level of checks of a charity’s partners on the ground, it is sadly too often the case that this does not happen.

As to awareness, training should be implemented to ensure that employees at all levels have a basic knowledge of potential threats as well putting in place the appropriate mechanisms to alert the charity to potential new fraud risks. Recent examples of cyber fraud might include phishing, ransomware, cyber-hacking of financial accounts and interception of email communications to third parties containing sensitive financial information.

Electing a senior staff member (or members) to keep on top of industry news and take responsibility for circulating updates and guidance is a good starting point.

For example, in December last year it was reported that the Save the Children Federation (part of the global Save the Children organisation) had fallen victim to a scam whereby the fraudster had accessed an employee’s email account and used that to channel requests for approximately $1 million of charity monies to be transferred to an unauthorised third party.

Alerting employees to reports like this, as well as formal guidance such as that recently issued by the Charity Aid Foundation in relation to fraudulent emails, can only serve to bolster a charity’s fraud defence.

An appropriate anti-fraud policy is central to a charity’s ability to reduce the risk of fraud and can also act as a deterrent to potential fraudsters. The purpose of the policy is to provide a definition of fraud and define authority levels, responsibilities for action, and reporting lines in the event of suspected, attempted or actual fraud. 

Fraud detection

When it comes to fraud detection, it is important to know the warning signs of a potential fraud. Red flags might include irregular invoicing, a sudden change in an employee’s behaviour or missing documents or records. Thorough checks and controls are central to identifying possible anomalies.

For example, an obvious reoccurring theme with fraudulent activity is the processing of false financial or other documentation and therefore producing an internal document highlighting some of the possible warning signs provides a relatively straightforward additional layer of protection.

One often sees fraudulent payments made to an account seemingly in the correct name, but on closer inspection historically the formatting of that name has previously been different (i.e. an initial for the forename instead of the full name or the surname has featured first). Whilst this is a very subtle difference to an untrained eye, it is not difficult to spot if working to a checklist alerting the employee to look out for such a change.

Employees’ help

It is common knowledge that an organisation’s eyes and ears are its employees and therefore ensuring that they are comfortable in reporting a suspected fraud may help to minimise any potential fall out.

A culture of transparency and clear communications, and making it known that everyone associated with the charity has a responsibility for being vigilant and keeping an eye out for any signs of fraud are important. As is a written procedure that deals with how to report suspected fraud confidentially. It should be borne in mind that an internal disclosure is likely to be less damaging than a report made to an external third party.

A question that often arises is the extent to which an accountant or auditor is expected to spot fraudulent activity. This is not always clear cut. Best practice guidance issued by the Financial Reporting Council (with reference to the International Standards on Auditing) records:

“The auditor of a charity is responsible for forming an opinion as to whether financial statements show a true and fair view and to this end the auditor plans, performs and evaluates the audit in order to have a reasonable expectation of detecting material misstatements in the financial statements arising from error or fraud.”

Ultimately however, it is the trustees of a charity who are responsible for the prevention and detection of fraud.

Effective response

Failure to react quickly and properly investigate a fraud can have potentially disastrous consequences, not least the possible destruction of crucial evidence necessary to pursue criminal or civil proceedings. A taiIored fraud response plan clearly setting out what steps should be taken when a suspected fraud is first identified (and subsequently) will assist greatly in ensuring a considered but efficient response should the worst occur.

A checklist of steps likely to be required within 24 hours of a fraud being detected is as follows:

1. Contact the charity’s legal advisers and ensure that they are copied in to correspondence relating to the investigation to preserve legal professional privilege.
2. Assemble an investigation team (a core team of people to work together to investigate and combat the fraud).
3. Determine the charity’s objectives in conducting the investigation in order to develop a strategy for moving forward.
4. Review how the potential fraud and related investigation could affect the charity’s public relations were details to be made public.
5. Consider privacy and data protection issues.
6. Secure evidence lawfully. Capture relevant data and preserve it.
7. Ensure that the suspected fraudster is not aware that the potential fraud has been identified.
8. Identify and interview witnesses ensuring detailed records are kept of each witness’s account.
9. Keep under review whether it is necessary to notify the Charity Commission of, or update it on, the suspected fraud/investigation.
10. Review any loss that has been suffered and any risk that this might increase.
11. Follow and preserve the charity’s money/assets putting in place restrictions as required.

Next steps

Once a thorough investigation has been completed it will then be necessary to consider next steps including the legal options. It is possible that the police may need to be involved and steps taken in relation to a criminal prosecution or civil action pursued to recover funds.

Trustees have a general duty to act in the best interests of their charity. They have a duty to protect a charity’s assets and where necessary to recover assets belonging to the charity. The risks and consequences of any potential legal action, including the potential costs and time ramifications, should always be carefully considered in light of these duties.

The Charity Commission, in partnership with the Fraud Advisory Panel, has recently launched a fraud resilience survey with the aim of getting a better understanding both of charities’ resilience to fraud and their levels of cyber security. One awaits with interest the outcome of this survey but in the interim can only reiterate the importance of taking preventative steps now to seek to best protect your organisation.

Charities are built on foundations of public trust and confidence and every effort should be made to avoid the potential financial and reputational damage of falling victim to fraud.