Posts Tagged ‘charities’

Kids Company and the lessons we should continue to learn

Posted on: October 5th, 2016 by Sarah Case No Comments

Sarah CaseSince the news of the Kids Company broke and the findings unravelled in the media, we have been working hard to increase awareness of the issues and publicise the guidance Charities have available to them, so they do not become the next big news story.

Within days of the news story breaking about the Kids Company people were keen to offer opinion and hindsight solutions to the problem, and whilst there is plenty to take learning from, it was far better for organisations to wait, read the full report and make a measured plan as a result of the findings.

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Reduced VAT rate withdrawl – energy-saving materials installed in charitable buildings

Posted on: September 17th, 2012 by Sarah Case No Comments
Sarah Case, Director, MHA Broomfield Alexander

Sarah Case, Director, MHA Broomfield Alexander

UK to withdraw reduced rate from 2013

HMRC has confirmed its intention to withdraw the reduced (5%) rate of VAT from the installation of energy-saving materials (ESMs) in relevant charitable buildings. This is set out in Revenue & Customs Brief 26/12 and will probably take effect from 1 August 2013.

Where work has commenced for the installation of ESMs before the date of withdrawal (provisionally 1 August 2013), the reduced rate will continue to apply to the whole installation even if part of that installation is performed after that date.

The change is because the reduced rate on such supplies is not permitted under European law. The EC has commenced infringement proceedings on three grounds:

  • that there is no specific provision in EU law to allow a reduced rate for ESM;
  • that the EU provisions on which the UK relies as the legal basis for the reduced rate (Category (10) of Annex III to the Principal VAT Directive) only apply where introduced ‘as part of a social policy’, whereas the UK’s relief for ESM has been introduced as part of an environmental policy; and
  • that, in any event, the UK’s relief is too wide as the EU provisions on which it relies apply only to housing, which does not include buildings used for a relevant charitable purpose

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Social Value Act

Posted on: July 31st, 2012 by SarahCase No Comments
Sarah Case, Director, MHA Broomfield Alexander

Sarah Case, Director, MHA Broomfield Alexander

This Act comes into force in January next year and is important because it enforces good commissioning practice by not letting public bodies procure solely on the basis of price. This will affect all providers whether private sector, social enterprise or charities but will present different challenges to all.

Private sector firms are increasingly active in public service provision and while there are the well publicised difficulties such as G4S and the Olympics, there are many that are running well. The Social Value Act will mean that in future, they will have to demonstrate wider value such as community engagement in addition to quality and cost. This presents a key opportunity to charities for closer engagement with private sector firms as they would often prefer to buy in the appropriate capability for the job.

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Third sector income: a changing picture

Posted on: May 18th, 2012 by Liz Mounfield No Comments

The total income of the third sector in Wales is estimated at around £1.5billion, and organisations receive funding from a wide range of sources, including public giving, grant-making trusts, trading, and a large proportion – around 45% of total income – from public bodies.

In recent years, there has been a significant shift in how third sector organisations are funded by the public sector. Where organisations may previously have received grants from local and national government or health bodies, more and more public bodies are using procurement to establish contracts with organisations.

Between 2006 and 2009, WCVA third sector funding surveys showed a sharp decrease in grant income and a corresponding increase in income from contracts. In the financial year 2009-10, over three quarters (77%) of third sector funding from Local Authorities was in the form of payments for specific services, with only 23% given in grant funding.

But grant funding and concluding contracts through procurement are very different processes, with profound implications for both the funder and the recipient.

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Are you fraud aware?

Posted on: April 10th, 2012 by SarahCase

 

Sarah Case, Director, MHA Broomfield Alexander

Sarah Case, Director, MHA Broomfield Alexander

Companies and charities operating in Wales are being warned that they are particularly vulnerable to fraud as the faltering economy creates a combination of more desperate people and less secure organisations.

Charities in the UK estimate that they lost £1.1bn to fraud in 2010/11, according to the latest figures from the National Fraud Authority.

We’ve been talking to our clients on an on-going basis about the increasing risk for all organisations of fraud by both employees and other stakeholders.

We have listed below the Charity Commissions top 10 tips with regard to fraud.  At the very least you should benchmark yourself against these points.

If you or your organisation have any concerns in the area and feel that a full review may be appropriate please contact us at [email protected].  We can offer services ranging from a simple fraud checklist to a full fraud review.

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Warning to organisations in Wales of increasing fraud risks

Posted on: April 9th, 2012 by SarahCase No Comments
Sarah Case, Director, MHA Broomfield Alexander

Sarah Case, Director, MHA Broomfield Alexander

Companies and charities operating in Wales are being warned that they are particularly vulnerable to fraud as the faltering economy creates a combination of more desperate people and less secure organisations.

With the UK losing a staggering £38bn a year through fraud, an increase in the number of high-profile fraud cases, and a recent report which reveals that charities are foregoing 2.4 per cent of their income to fraudsters, organisations in Wales are likely to be particularly prone to becoming the victims of fraud.

The propensity of the would-be fraudster to commit their crime is largely dependent on both their motive and the existence of opportunity,

As unemployment, rates of taxation, inflation and other factors that put pressure on disposable income all rise, so to does the motivation to commit fraud.

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Accounting Standards Board publishes proposed new rules for charities

Posted on: February 8th, 2012 by Sarah Case No Comments
Sarah Case, Director, MHA Broomfield Alexander

Sarah Case, Director, MHA Broomfield Alexander

The Accounting Standards Board has released new draft accounting rules for charities as part of a consultation into new financial reporting standards for charities.

The rules include a number of changes such as incorporating a proposed financial reporting standard for public benefit entities (PBE) into the general standard.

The document confirms that the ASB will not introduce new rules requiring charities to account for all donated goods when they are received, a procedure that charity shops feared would add extra expense to their operations. Instead, charities will only be obliged to consider “whether the resources can be reliably measured and whether the benefit of recognition outweighs the costs”.

Consultation on the standards is open until 30 April 2012.

The statement of recommended practice for charities, which will be based on the PBE standard, will be drawn up and consulted on once the current rules are finalised.

Why not follow @BroomfieldWales on Twitter to keep up with the latest information on finance in the charity and the third sector and other business and financial topics, or by simply registering for our monthly newsletter.

Charity Commission places greater responsibilities on trustees

Posted on: January 27th, 2012 by SarahCase No Comments
Sarah Case, Director, MHA Broomfield Alexander

Sarah Case, Director, MHA Broomfield Alexander

The Charity Commission has recently outlined its new approach to regulation which places greater emphasis on preventing problems and identifying risks early, rather than dealing with them after they occur.

This Risk Framework explains to trustees, charity advisors and the wider public the Commission’s approach to regulation and how it assesses risks affecting charities, the wider charity sector, and public confidence.

The Commission will use the Framework to support its aims which are to assure the public that charity money is used in line with charity law, that charities are legitimate and run in line with their charitable purposes, as well as ensuring trustees carry out their duties and responsibilities and promoting high standards of accountability and governance in charities.

The document places a greater expectation on trustees to tackle risks head on, anticipating that if something goes wrong that it is their responsibility to put it right. The document also makes it clear that there will be greater expectation for trustees’ to tackle issues of potential risk to their charities.

The Commission will place emphasis not on charities’ internal disputes, but focus on a three-stage process to decide how and when to investigate charities and will focus only on cases of serious risk.

As long as trustees act lawfully and reasonably, the Commission will not intervene or overturn decisions, no matter how unpopular they may be with beneficiaries or the public. The Commission’s investigations going forward will be statutory, rather than regulatory cases.

Why not follow @BroomfieldWales on Twitter to keep up with the latest information on finance in the charity and the third sector and other business and financial topics, or by simply registering for our monthly newsletter.

Charities – creating a sustainable future

Posted on: January 10th, 2012 by Sarah Case No Comments
Sarah Case, Director, MHA Broomfield Alexander

Sarah Case, Director, MHA Broomfield Alexander

Recently there have been unprecedented stresses placed on the charity sector and some organisations are facing a substantial reduction in services or even closure. However, these outcomes are far from inevitable.

Charities that have built and are building strong predictable income streams and have robust financial planning mechanisms in place, running their services in a financially sustainable manner will allow valuable services to be maintained.

Many of the steps that charities are taking – changing their operations on cost grounds and reviewing or delaying activities – will see them endure for longer as these strategies make the most of available resources.

Many find that by taking steps to ensure that they stick more closely to their core mission and adapting to a more austere funding environment that they can define more tightly the services that they deliver or are targeting their beneficiaries more precisely.

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Writing a successful funding application

Posted on: September 8th, 2011 by Liz Mounfield No Comments

There are a number of key issues to consider when preparing a strong funding application. Firstly, ask yourself, ‘Does the project deliver on the priorities set out by the funder?’ Funders are just like you; they are passionate about their issues and supporting their chosen sections of the community, the difference is that they choose to pay organisations to deliver on those priorities.  The more closely your project matches the priorities of the funder, the stronger your bid.

The second issue to consider is whether you have demonstrated that there is robust evidence of need for the project. One of the biggest fears for funders is that they will fund a project that no-one wants or needs. You may provide evidence that there is a need for this project by demonstrating ‘high rates of crime’, ‘levels of deprivation’, or ‘poor educational attainment’ using statistics you will also need to demonstrate that the proposed solution is one that the community wants.

Getting the project costs right is absolutely essential and there are a couple of rules to consider.

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