In recent weeks there have been several reports from both the Charity Commission for England and Wales and the Office of the Scottish Charity Regulator (OSCR), about the behaviour of charities and regulatory compliance.

On the one hand:

• Whistleblowing reports to the Charity Commission almost doubled in 2023/24 (up from 301 to 561 - in 2018/19 there were only 185 such reports). OSCR also reported a rise in the number of such reports (albeit only from 8 to 10).

• OSCR says that “dominant behaviour” in charities is on the rise in Scotland, with such concerns being raised more often by trustees, staff and the public.

• The number of official warnings and trustee disqualifications issued by the Charity Commission has tripled (from 11 each last year to 39 and 34 in 2023/24).

• The number of statutory inquiries opened by the Charity Commission also appears to be rising (89 new cases opened in 2023/24 up from 72 in 2022/23).

• There has been a slight rise in serious incident reports received by the Charity Commission (up from 2,969 to 3,106).

On the other hand:

• The Charity Commission used its powers to “promote compliance with charitable law” 2,189 times in 2023/24, compared to 2,401 in 2022/23, albeit its use of powers to prevent and sanction wrongdoing increased.

• OSCR reported a fall in serious incident reports from 638 in 2022/23 to 527 in 2023/24.

• The Charity Commission recently reported that public trust and confidence in charities in England and Wales is at a 10 year high.

Alongside all this, the number of new charity applications in England and Wales rose from 8,583, to 9,008, with only 54% being approved (up from 48% the previous year).

So what does all this tell us?

In our view, after a closer look at the statistics, informed also by our experience of enquiries about regulatory matters, including new registrations, there are two or three key issues at play here:

1. The complexity (and often counter-intuitive nature) of charity law and regulation may be leading to a growing number of inadvertent breaches. It is clear that many (if not most) small charity trustees and staff don’t understand the nuances (and sometimes the fundamentals) of the regulatory environment in which they operate.

2. There appears to be a rise in the number of complaints from the public or disgruntled former staff/trustees, sometimes with good reason, which is increasing the risk of issues coming to the attention of the regulators. This is partly about increased awareness of how to make a complaint and partly because of internal conflicts arising in charities (e.g. over hot topic global issues such as the war in Gaza, about which the regulators are particularly sensitive).

3. There may also be a bit of an up-tick in the number of people seeking charity registration for, what might be thought to be, the “wrong reasons”, (e.g. to avoid/evade tax, to enrich themselves or to finance activities that. while worthy, are not charitable, or sometimes worse than that). Around half of the enquiries we receive about new registrations appear to us to be in this territory and, after some probing questions from us we never hear from the enquirer again.

What all this points to, in our opinion, is the need for anyone running, or considering setting up, a charity to: read the relevant guidance (and refresh their memory from time to time); get expert advice; and work hard to maintain public/stakeholder trust and confidence in their work. This will minimise the risk of regulatory concerns being raised in the first place and the risk of wrongdoing being discovered if there is an enquiry

To find out more about the governance support and training we offer, please contact us at julian@almondtreeconsulting.co.uk to arrange free initial telephone discussion.