BULLETIN No. 175: July 2018

My monthly attempt to keep my contacts, friends, friends of friends, etc. in touch with what's going on in the world of charities. A distillation of the many briefings that arrive on my desk, plus whatever I've gleaned from charities I'm currently working with. Always glad to get your comments, suggestions and requests for help;

Daryl Martin

d.martin@afvs.org.uk

What do we have this month?

1. AFVS Website
2. GDPR Update: ICO Fines Charity £100k
3. How You Handle a Complaint is Important
4. How Will Artificial Intelligence Impact Your Charity?
5. Legacy Income not Growing
6. New Automatic Disqualification Rules
7. Employing a Current or a Former Trustee
8. Engaging Trustees in Fundraising
9. Switching Your Incorporated Charity into a CIO?
10. Charity Shops being Charged Business Rates
11. VAT Registration Threshold
12. Trustee Training
13. Code of Ethics
14. How Can We Help You?
15. And Finally...

1. AFVS Website
After a lengthy catalogue of disasters we managed to get our new website operational. We’re not celebrating quite yet as there’s still a fair amount of work in progress. We’ve strengthened our IT resources, and this will help us get where we need to be. The library isn’t yet operational; if you want something just pop an email request across.

2. GDPR Update: ICO Fines Charity £100k
This headline has got a lot of people in charities worried, fearing they might be next. The plain facts are that this particular charity had been complacent and hadn’t put its house in order. If you’re working on it, taking it seriously, but haven’t quite got there, you won’t get penalised. Don’t forget that many of the early adopters wish they’d hung back a bit; they’re paying a heavy price. I have noticed that whilst charities generally have been getting their act together, many small businesses haven’t done the same. We’ve set up a service to help small businesses get GDPR compliant. Pass the word along if you know anyone who needs our help.

3. How You Handle a Complaint is Important
Most customer relationships don't stumble because something went wrong. Your best customers and clients know that mistakes happen. It's what happens next that can cripple the relationship. How we recover from a miss is where the possibilities lie. If you're open, engaged and focused on making things better, the door is open to build a resilient, ongoing partnership. Not just for customers, but for all the people we work with and count on.

Too often, we're so focused on not hiccupping, or so filled with shame and blame, we fail to allocate enough emotional labour to do the most important part--making things right. Not with a refund or a basket of fruit, but by truly seeing the other person, understanding what happened and doing the hard work to move forward. (Thanks to Seth Godin for this timely reminder)

4. How Will Artificial Intelligence Impact Your Charity?
Timeframe for change? Everyone accepts that change is coming, but when? There are differing views about the pace of the change and the spread of adoption. We could spend the next 5 – 10 years understanding and applying AI to improve efficiency, with more radical change to follow. My view is to argue for a more aggressive timeframe. There could also be differences across the market. Bigger charities may be able to invest and adapt quickly, leaving smaller organisations much further behind. On the other hand, smaller organisations could actually be quick adopters, as AI is integrated into existing software. As costs come down smaller charities that are sufficiently nimble will be able to quickly adapt to new opportunities. We are about to embark on a major restructuring process to enable us to make the changes that are going to be needed to look after our clients and add value to help them do a better job.

This will affect all of us. Change or die.

5. Legacy Income not Growing
I’m in the middle of preparing an extensive briefing on legacies. I’ve put 11,000 words together, but they aren’t necessarily in the right order to quote Eric Morecambe. Let me know if you’d like a copy when it’s completed.

6. New Automatic Disqualification Rules
From August 1st every existing trustee, new trustees coming on board, and senior staff should complete and sign the declaration. Since my mention of this last month, I’ve had readers write in to ask if there is a template putting this declaration and the HMRC declaration together into one document. My colleague Jo has very kindly done this in our New Trustee Induction Guide, essential reading for new trustees. Write to us for a copy, and don’t forget to check whether anyone needs a waiver. If you need help email me.

7. Employing a Current or a Former Trustee
It’s not unusual. It’s not impossible as some would say, but it is a tricky process. Contact us if this is something you need help with. I might even pull a briefing together on this issue.

8. Engaging Trustees in Fundraising
Many UK charities are struggling financially, yet only half of trustees are actively involved in fundraising. Admittedly, many trustees find fundraising a challenge and others are simply not able to make a significant financial donation. However, there are lots of opportunities for them to support your work, many that are easy, and anyone can do. In doing so, may learn a lot more about you than in a board meeting and, in all probability, enjoy themselves. Your trustees probably have more than enough on their plates, but if you want some ideas to involve them in fundraising, send me an e-mail. Somethings are more likely to work when they begin at the top.

9. Switching Your Incorporated Charity into a CIO?
I prepared my briefing. It’s already helped a couple of charities decide to make the switch, and we’re working with them on the conversion process. Let me know if you’d like a copy of the briefing.

10. Charity Shops being Charged Business Rates
The Air Ambulance Service has said it’s been charged 100 per cent business rates for two of its charity shops, in what is believed to be the first instance of a local council successfully refusing to give a charity shop the normal discount.

Charity shops usually receive mandatory 80 per cent business rates relief and can be offered the remaining 20 per cent relief at their local authority’s discretion. However, recently local authorities have started trying to charge charity shops full business rates if they are leased through a trading subsidiary.

11. VAT Registration Threshold
HMRC has been consulting on the level of the VAT registration threshold, and it is possible that charities will be affected by the outcome.

The current registration threshold is £85,000. This is the value of ‘taxable’ supplies made, so excludes donation income. This high threshold means most charities are not required to register for VAT.

The HMRC consultation asks whether this threshold should (1) remain as it is, (2) be significantly increased, perhaps to £500,000, or (3) be significantly reduced, perhaps to £25,000. There are lots of statistics available to demonstrate the impact of these alternatives.

Any decision is probably 2-3 years away, so there is no need to panic! We think the most likely outcome is a reduction. This will generate extra revenue which the Treasury urgently needs. However, we think there will be plenty of warning to allow taxpayers to prepare for the change.

So, add to your Trustees’ Agenda; ‘How will a reduction in the threshold affect us?’ Consider the administrative costs of VAT registration. We are here to assist.

12. Trustee Training
I’ve one planned for July then nothing, which is how I like it in the summer. If you want to look at something in the autumn, let us know.

13. Code of Ethics
Fed up with the dreadfully low standards set by more than a few of mostly the bigger charities from mainstream charities to Oxfam and Save the Children, people are beginning to talk about the importance of having trustees sign up to a code of ethics. In a briefing released yesterday, the Institute of Business Ethics, says that, given recent negative newspaper headlines about charities, codes of ethics can help to ensure 'coherent and consistent behaviour' among staff and volunteers.

“Each charity should have an individual code of ethics in place to ensure the highest standards of integrity exist in the organisation and to improve trust in the sector, a new paper says. This can provide reassurance to funders, donors, partners and sponsors.”

My Charity Toolkit and New Trustee Induction Guide contains a Code of Conduct which I recommend you put in place if you haven’t already.

14. How Can We Help You?
The list of our support services gets ever longer:

All Aspects of Accounts including Yearend and Bookkeeping
Migration to Xero and QuickBooks Online
Legacies
Mentoring
VAT Advice
Outsourcing (Book-keeping, Virtual FD, Gift Aid etc.)
Data Protection (GDPR) Compliance
HR Support
Legal Advice
Trading Issues (including Charity Shops)
Community Halls
Fundraising: Reviewing, Advising, Mentoring, Bid Writing
Training, Including Online Learning
General Advice and Consultancy
Extensive Library of Briefings and Policy Templates

Contact us if you need help in any of these areas.

15. And Finally...

With so much going on we need all our wits about us.

A prayer of blessing:

Bless my eyes Lord,
That they may see below the surface; see what's beneath the masks so often worn.
Help me to drink in the beauty of the world, but be mindful of the hunger, suffering, injustice, loneliness and oppression in my world
Help me to know when to open my eyes,
and when to close my eyes.

Bless my ears Lord, That I may hear what's truly being said.
Give me wisdom to accept what is true and reject what is false.
Help me to find oases of silence to calm my soul in a noisy world.

Bless my mind Lord; may it feed and grow on you,
And see all things from heaven's perspective


Thank you for your encouraging messages. We look forward to hearing from you with your questions, your suggestions, your requests for help and advice. Go well and enjoy your summer.

If you find this bulletin helpful, could you take a moment to pass it onto others who might appreciate it.

Daryl Martin