charitytimesSeptember_2016[1]

See page 45 for charity suppliers directory
Plus:
www.charitytimes.com
CHARITY TIMES AWARDS View the shortlist inside
Funding: Risk management: Profile: Technology:
Corporate partnerships
How do you make sure you
find the right company for
your organisation?
Insurance
New legislation aims to create
a fairer balance between
insurers and policyholders
Caron Bradshaw
How CFG is placed to face
the future after a major
change programme
Data management
Charities could be sitting on a
potential treasure trove in the
data they hold
Raising the bar
News round-up
Sector and investment columns
Appointments
August/September 2016
What steps have fundraisers taken to adjust practices
and approaches in the wake of a difficult year?

BEING BROAD-MINDED
WIDENS HORIZONS.
WHEN IT COMES TO INVESTMENT,
SEE HOW WE’RE THINKING
BEYOND THE OBVIOUS.
CALL WILLIAM REID
HEAD OF CHARITIES
TEL. +44 (0)20 7150 4000 OR VISIT
WWW.QUILTERCHEVIOT.COM
Belfast Birmingham Bristol Dublin Edinburgh Glasgow Jersey Leicester Liverpool London Manchester North Wales Salisbury
Investors should remember that the value of investments, and the income from them, can go down as well as up.
Quilter Cheviot Limited is registered in England with number 01923571. Quilter Cheviot Limited is a member of the London Stock
Exchange and authorised and regulated by the UK Financial Conduct Authority.

Editorial
Comment
Editor
Matt Ritchie
matthew.ritchie@charitytimes.com
020 7562 2411
Contributing Writers
David Adams, Caron Bradshaw, Craig Inches,
David Kirk, Peter Lewis, Gillian McKay, Richard
Nelson, Lynn Pates, Antony Savvas, Becky Slack,
Antonia Swinson
Design & Production
Matt Mills
matt.mills@perspectivepublishing.com
020 7562 2400
Advertising Manager
Sam Ridley
sam.ridley@charitytimes.com
020 7562 4386
Subscriptions
perspectivesubs@dynamail.co.uk
01635 588 861
Subscription Rates (6 issues pa)
£79pa registered charities
£119pa rest of UK, £127pa EU
£132pa elsewhere
Printed by Buxton Press
All rights reserved. The views expressed
are not necessarily those of the publishers.
ISSN : 1355-4573
Published by
Perspective Publishing
6th Floor, 3 London Wall Buildings
London EC2M 5PD
www.perspectivepublishing.com
Managing Director
John Woods
Publishing Director
Mark Evans
Getting on with it
T
here doesn’t seem to be a meaningful consensus on the regard in which
charities are held by the general public.
The Charity Commission caused a stir in the summer when
publishing research indicating public trust in charities had plumbed depths not
reached since its monitoring began.
Having measured public confidence in the sector since 2005, this year’s
survey found people’s trust in charities had fallen to a score of 5.7 out of 10
this year, from 6.7 last year.
Reactions ranged from ‘the end is nigh’ catastrophising, to head-in-the
-sand denialism. These extreme interpretations of what is a flawed but
nonetheless useful measure of the state of the sector were unhelpful.
It is good that the commission carries out these temperature checks. Indeed,
it is arguably vital to the regulator’s work if it is to discharge its duty to
develop public confidence in the sector.
And it is helpful to know how the public, whose support is the lifeblood of
so many charities, views civil society.
It would be naive bordering on delusional to expect trust not to have taken a
knock after the year the sector had. And it could have been far worse.
As Institute of Fundraising chief executive Peter Lewis points out in his
regular column (p16), people are still supporting charities in huge numbers
despite the troubling picture the commission’s research paints.
Many may be sceptical about their concept of the sector, but by and large
they still trust and treasure the individual charities they know well. Data
suggests that while recruiting new donors has been tougher, and this will have
a range of drivers in addition to issues of trust, charities are holding on to
existing supporters.
Nevertheless it would be unwise to take the ostrich approach. It is not even
an option, after a new regulatory framework for fundraising was introduced
and is now in force.
What is encouraging is the work charities and infrastructure bodies
have done of their own accord to get the sector’s house in order. It is
not surprising, charities are by nature ‘doers’, fixers rather than describers
of problems.
Our cover story this issue (p20) looks in detail at some of the great work
that charities are doing to ensure their reputations, sustainability - and with it
the ongoing health of the sector.
Matt Ritchie, Editor
03www.charitytimes.com
the ongoing health of the sector.
Average net
circulation of
9,426 copies for
July 13 – June 14

In this issue
Contents
August/September 2016
20
18 Caron Bradshaw
Charity Finance Group took on a
lot in its nearly-completed change
programme, and now faces the future
refreshed. CEO Caron Bradshaw
told Matt Ritchie about the charity’s
new approach
20 Raising the bar
Media coverage in 2015 made for
uncomfortable reading for
fundraisers. What steps
has the sector taken to adjust
practices and approaches in the
wake of such an awful year?
06
Interview Fundraising
News & views
Regulars
06 News in brief
10 Appointments
12 Diary
40 Charity chatter
Columns
13 Fraud prevention
by David Kirk
14 Brexit
by Caron Bradshaw
15 Social media
by Gillian McKay
16 Trust
by Peter Lewis
17 Property
by Antonia Swinson
34 Seeking bond-like
returns for cash
by Craig Inches and Richard
Nelson
43 Why use inflation based
targets?
by Lynn Pates
Charity Services
45 Suppliers Directory
04 www.charitytimes.com
18

In this issue
Contents
36
36 Knowledge is power
Charities could be sitting on a
potential treasure trove in the data
they hold on supporters and data
generated by their operations
Data management
31 Taking cover
The new Insurance Act seeks to
create a fairer balance between
insurers and policyholders. Charity
Times covers the changes
Insurance
24
24 The perfect match
Corporate partnerships can offer a
wealth of benefits but how do you
make sure you find the right
company for your organisation?
Corporate
partnerships
31

News
in brief
depression aLLiance and mind
have merged. The two charities
said they have a lot in common,
including their aims to support
everyone with depression, give
people with depression a voice to
raise awareness, and bring people
with experience of depression
together to support each other.
macmiLLan cancer support
maintains its position as the
top charity Brand, new analysis
from YouGov’s mid-year
CharityIndex shows. Every six
months data firm YouGov releases
its Buzz rankings; a study of which
charity brands are generating the
most positive sentiment. Macmillan
Cancer Support has maintained its
top position since YouGov started
looking at the charity sector. Cancer
Research UK is in second place with
Help for Heroes in third. The top
five is completed by the Dogs Trust
and the British Heart Foundation.
The list is rounded off by RNLI, and
Guide Dogs, with Marie Curie, the
National Trust, and the Alzheimer’s
Society in joint eighth place.
CharityIndex measures the public’s
perception of 45 charities on a daily
basis across a range of measures.
YouGov’s 2016 mid-year rankings
were compiled using Buzz scores
from the start of January to the
end of June.
access – the Foundation For
sociaL investment has invested
£4.44m in the Health and Wellbeing
Challenge Fund South West, to be
delivered by Resonance. The South
West Academic Health Science
Network has also invested £400,000.
The fund will offer funding of up to
£150,000 to charities and social
enterprises in the South West of
England working to bring about
positive impact in health and
wellbeing. The new programme is an
initiative of the £45m Growth Fund,
which is designed to increase the
availability of small, affordable,
unsecured loans for charities and
social enterprises. The Growth Fund,
managed by Access, provides a
blend of loans from Big Society
Capital and grants from the Big
Lottery Fund, to social investors
across England.
city Bridge trust has awarded
£312,100 in grants to
organisations heLping
Londoners engage in the
perForming arts. Organisations to
benefit from recent City Bridge Trust
grants include Action Space London
Events, which received £118,300 to
help expand its arts provision for
people with learning disabilities,
and Stratford Circus Arts Centre
which received £93,240 to help fund
and develop its flagship Blue Sky
Actors performing arts group for
adult actors with learning difficulties
and/or disabilities.
the Big Lottery Fund has
awarded a tech For good
organisation 1.12m to improve
charities’ digitaL eFFectiveness.
The Centre for Acceleration of
Social Technology (CAST) will use
the funding for two initiatives over
three years. An intensive product
accelerator programme will work
closely with 12 charities across the
UK to build new digital services.
CAST will also develop a set of
learning tools, templates and
publications delivered on- and off-
line to provide support around digital
development and facilitate knowledge
sharing. CAST will invite
applications for its digital accelerator
later this year, with the first two
charities starting in 2017.
donations paid into charities
aid Foundation’s charitaBLe
accounts reached a record
£524m Last year, according to
CAF’s annual report. It was the first
time donations paid into CAF
exceeded £500m, and £462m was
redistributed to good causes in
2015/16. Announcing its results CAF
said it manages donations on behalf
of wealthy philanthropists, 2,500
businesses and more than 250,000
people. There was a 10 per cent
increase in donations into CAF
Charitable Trust accounts and
legacies in 2015/16, compared to the
previous year. The amount they paid
out to charities also rose - from
£156m to £164m. Regular givers
donated £104m through CAF, up £4m
on the previous year.
“It was the
ﬁrst time donations
paid into CAF exceeded
£500m, and £462m was
redistributed to good
causes”

News
in brief
LLoyds Bank Foundation has
committed £4,122,132 in the
second oF its three annuaL
grant rounds to support local
charities, the grant maker has
announced. Across England and
Wales, 88 small and medium-sized
charities tackling disadvantage will
receive grants up to £75,000 over
three years. The funds will help
charities with an income of £25,000
to £1m as they respond to the
growing needs of those they support
with increasingly limited resources.
One-in-five grants were awarded
to charities supporting those furthest
away from the labour market into
employment. Other top ranking
issues among grants awarded were
homelessness at 15 per cent, mental
health issues 11 at per cent, and
those abused or at risk of abuse at 15
per cent. Grants awarded to 58
charities through the foundation’s
Invest programme will fund charities’
core organisational and programme
delivery costs. Lloyds Bank
Foundation said 30 charities received
funds to develop and grow stronger
through its Enable programme,
with grants funding new areas
of work, pilot programmes or
income diversification initiatives
like social enterprises.
LaBour Leadership candidate
owen smith has said a
government he Leads wouLd
end tax-advantaged charitaBLe
status For private schooLs.
Writing in the Guardian, Smith said
it is “deeply unfair” that fee charging
schools also receive tax breaks due
to their charitable status. “On my
watch, there will be no cautions or
caveats about whether a private
school is charitable or not, this
wealthfare will end,” Smith wrote.
The Labour MP for Pontypridd
said scrapping the tax breaks
would raise “hundreds of millions
of pounds”.
charities and community
groups are Being encouraged
to appLy For peopLe’s postcode
Lottery’s £2.5m dream Fund.
Funding from the scheme will be
offered over two years from 2017.
The Dream Fund encourages charities
and community groups to work
together on a project they have
always wanted to deliver but did not
previously have the opportunity to.
This year’s prize is the biggest ever,
with a top award of £1m and a total
pot of £2.5m. Applications are invited
from projects that fit within one or
more of the charitable purposes,
which include early child
development, helping refugees in the
community, conserving the marine
environment, reconnecting with the
natural world, and engaging people
with arts culture and heritage. The
Dream Fund has invested over £4.8m
in 21 projects to date. Previous
winners include Missing People’s
‘Child Rescue Alert’, Glasgow based
‘Play on Pedals’, and Valley Kids’
‘Building our Dreams’.
peopLe Born around the
miLLennium are the most
receptive age group to direct
maiL From charities, a new study
suggests. Research from direct
marketing service provider
Wilmington Millennium found 6 per
cent of ‘Generation Z’ believe
charities have been irresponsible with
their direct mail targeting, compared
with the mean consensus of 20 per
cent. The survey of 2,000 people
found Generation Z were most likely
to boycott an organisation if it were
to send poorly targeted mail. People
in this age group received the least
amount of direct mail, but the most
non-personally addressed mail.
Half of Generation Z respondents
believed that a piece of personally
addressed direct mail was worth
opening, compared with the average
of 19 per cent.
charity campaign
#givingtuesday has Launched
For 2016, the third year in which the
initiative will run in the UK. Led in
the UK by the Charities Aid
Foundation, #GivingTuesday will
take place on 29 November this year.
The day follows the pre-Christmas
retail sprees of Black Friday and
Cyber Monday, and encourages
people and businesses to contribute
to good causes. Announcing the
launch of the campaign for 2016,
CAF revealed a new logo and
website for #GivingTuesday,
alongside the new tagline ‘Do Good
Stuff’. Last year #GivingTuesday
broke a Guinness World Record for
the most online donations in 24
hours, as people gave away £35m
to good causes globally.
“Smith said it is ‘deeply
unfair’ that fee charging
schools also receive
tax breaks due to their
charitable status”

News
in brief
The ChariTy Commission
widened The ChariTable objeCTs
of a hisToriC almshouse to allow
it to help its beneficiaries on a longer
term basis, the regulator has
announced. A report published today
explains that the commission
accepted St Nicholas Hospital’s
application to widen its objects to
allow it to provide financial
assistance to beneficiaries when they
can no longer live independently in
the almshouses. The commission said
it decided there was a legal case for
widening the charity’s objects. St
Nicholas Hospital’s beneficiaries
were living longer, which combined
with their health needs meant they
had to receive specialist care. St
Nicholas Hospital demonstrated
it had sufficient funds to provide
the support, the regulator said,
and the change being requested
was considered to be within the
spirit of the existing purposes.
allia impaCT finanCe has made
The firsT alloCaTion of This
year’s funding from iTs
ChariTable bond programme
for sCoTland, enabling Lochaber
Housing Association to build 50
affordable homes in the Fort William
area. Allia is working with the
Scottish Government to fund the
development of affordable housing
across Scotland, helping them invest
more than £50m in charitable bonds
over two years. The investment will
support almost 1,000 new homes.
The bonds provide a new source of
finance for housing associations, and
are ethical financial products. No
profit is taken by Allia, who issue the
bonds on the Scottish Government’s
behalf. The interest on the loan to
Lochaber Housing Association, over
half a million pounds, is converted
into a charitable donation, which the
Scottish Government gives to housing
associations for the construction of
new social housing. This latest bond
means the Scottish Government have
now provided development finance
for 581 affordable homes, and
generated over £9m for charities of
which £6.7m will go towards the
construction of new social housing.
small ChariTies will pay less
Towards The CosT of running
The fundraising regulaTor
Than originally proposed, the
new organisation has announced.
Announcing its levy framework the
new regulator also set out its plans
for the Fundraising Preference
Service which will allow people to
opt out of almost all fundraising
communications. Having consulted
on its levy plans, the Fundraising
Regulator has adjusted the allocation
of costs so slightly higher fees are
paid by charities spending more than
£20m on fundraising. Around 2,000
will fall within the scope of the levy,
but smaller charities will be able to
use a registration scheme enabling
them to highlight their support for
and adoption of good practice. A new
consultation on the FPS proposes that
the system will apply to charities
spending £100,000 a year or more on
fundraising. The regulator
recommends limiting the ability to
register a vulnerable third-party
member to those with power of
attorney or equivalent, to ensure
appropriate safeguards are in place
for a legitimate decision to be made.
Views are also sought on how the
FPS is expected to work alongside
the Telephone Preference Service
and the Mail Preference Service,
with charities being offered the
opportunity to contact those persons
that have donated previously,
but are signed up to existing
preference services.
ChariTies need To make beTTer
use of TeChnology To geT The
mosT ouT of The younger
generaTion, according to new
research. A study from YouGov and
the Charities Aid Foundation has
suggested there are opportunities for
charities to increase donations
through better use of mobile apps,
social media, and contactless
payments. The paper, Appetite for
donation, states 32 per cent of young
adults would donate via an app in the
next year if the technology was
available. The survey of 2,000 British
adults found 66 per cent now have
contactless cards, and 34 per cent of
those who use them carry less cash as
a result. One in three young adults
said they would use contactless
payments to give to charity if they
had the option.

News
in brief
finanCial baCking for The
sir sTephen bubb-led ChariTy
fuTures programme is
being provided by the partners
of Woodford Investment
Management. The project is initially
being funded by a contribution of
£400,000 over two years. Bubb has
stepped down as chief executive of
Acevo to carry out the work. It aims
to improve the effectiveness of
charities, including through lifting
standards of leadership and
governance. Woodford Investment
Management is the firm founded in
2014 by Neil Woodford after over 25
years at Invesco Perpetual. Jonathan
Smith, head of corporate social
responsibility at Woodford, spoke at
the Charity Futures Programme’s
launch event at the House of Lords in
July. Attendees at the launch, which
also served as a celebration of Bubb’s
time at the helm of Acevo, heard that
through his role Smith’s dealings
with charities gave him the view that
there needed to be greater focus on
sustainability and how charities are
run. Smith said he approached Bubb
after hearing him on Radio 4’s Today
programme after the collapse of Kids
Company. Bubb was was making
the case for stronger charity
governance and for donors to think
about sustainability and not just the
next project.
The regulaTor is invesTigaTing
a ChariTy that it says does not
appear to have had a bank account
since last February. Deen Team also
appears to have been operating
outside the terms of its governing
document, the regulator said, and
the commission said the charity’s
property is at risk due to poor
governance and inadequate financial
controls. The charity’s objects include
the relief of poverty in the UK,
helping young people via recreational
and leisure activities, and disaster
relief. Announcing the statutory
inquiry, the commission said it
carried out a compliance visit to the
charity in July 2014 as it was newly
registered and operating in Syria, “a
high risk area”. The regulator issued
regulatory guidance and advice, but
upon re-engaging with the charity did
not receive the requested information
and trustees had “partially complied”
with legal orders to provide
information. “The regulator has
concerns regarding the financial
management of the charity by the
trustees, including that the charity
does not appear to have had a bank
account since February 2015 and
it is in default with filing its first
charity’s accounts with the
commission,” the regulator said.
asseT risk ConsulTanTs has
launChed a new porTfolio
analysis serviCe for ChariTy
TrusTees. The offer further develops
the information ARC provides to
the third sector. Charities and their
advisers will be able to assess both
the performance and suitability of
their investments against benchmark,
peer group and other similar charities’
portfolios, review the risk-adjusted
returns generated for the charity
sector and receive cost-effective
independent performance reporting.
Delivered through ARC’s research
portal, www.suggestus.com, the
inaugural ARC Multi-Asset Charity
Fund Review gives an overview
of multi-asset charity investment
funds (CIFs) performance within the
charity sector and is available at no
cost.
The ChariTy Commission has
published updaTed guidanCe To
refleCT The new sTaTuTory
power for ChariTies To make
soCial invesTmenTs. The guidance
provides information about the new
social investment power that was
introduced as the first phase of the
Charities (Protection and Social
Investment) Act 2016 came into
force. The aim is to give confidence
to charities to undertake social
investments. The new interim
guidance supplements the
commission’s existing guidance -
Charities and investment matters
(CC14). The new power was
developed and introduced following a
programme of work and subsequent
Law Commission recommendation
in 2014.
bloCkChain TeChnology Could
make ChariTy adminisTraTion
requiremenTs like annual
reporTing exTinCT, according to a
discussion paper from Charities Aid
Foundation. The paper considers
that almost all functions of charity
regulators could be automated
using the technology. Blockchain
technology, which underpins Bitcoin,
is a decentralised public ledger.
“One in three
young adults said
they would use contactless
payments to give to
charity if they had the
option”

Charity
Appointments
People on the
move...
The latest appointments
from around the charity
sector
Peter Chambré
Peter Chambré has joined the
board of Cancer Research UK.
Chambré chairs a number of
life science and healthcare
companies including Immatics
Biotechnologies, a company
developing new cancer
immunotherapy treatments.
He also chairs Cancer Research
Technology.
Graeme hodGe
Graeme Hodge has joined All We
Can as deputy chief executive.
Hodge brings experience and
knowledge of working and living
overseas, having been involved
in international development
and public engagement
initiatives focused on social
justice, poverty alleviation and
community action.
Sara Naylor-Wild
St Monica Trust has named
Sara Naylor-Wild director of
transformation and development.
She joins from the Accord Group
where she was assistant director
of health, care and support. She
has worked in senior management
positions since being an inspector
for the Commission for Social
Care Inspection.
lyNda WilliamS
National children’s charity bibic has
appointed Lynda Williams as its new
chief executive. Williams was previously
director for Off The Record, and has
spent the past two decades within the
third sector and working with young
people. bibic, headquartered in
Somerset, provides therapy and
support for children with
developmental difficulties.
aliStair burNett
Sightsavers has appointed Alistair
Burnett in the new role of director of
news. Burnett has more than 25 years of
BBC experience including a decade as
editor of The World Tonight on Radio 4
and, before that, as editor of Newshour
on BBC World Service. The role will entail
co-ordinating media outreach and social
media, and supporting Sightsavers’
advocacy work.
If you have any appointments
to announce please contact
matthew.ritchie@charitytimes.com

Charity
Appointments
melaNie WaterS
Melanie Waters is to join Help for
Heroes as chief executive from
November. Waters joins from The
Poppy Factory, where she is chief
executive. Waters is a director
and commissioner of Forces in
Mind Trust, a member of NHS
England’s Armed Forces Clinical
Reference Group, and elected
vice-chair of Cobseo.
SaNdy luk
The Marine Conservation
Society has appointed Sandy Luk
as chief executive. Luk is currently
director of programmes at
leading environmental law NGO
ClientEarth. MCS cares for the
UK’s seas, shores and wildlife. The
charity campaigns for clean seas
and beaches, sustainable fisheries,
and protection of marine life.
JaSoN loo
Jason Loo, a senior associate at
KPMG, has joined CLIC Sargent
after the charity supported him
from his diagnosis through
treatment for cancer. Loo, 26, has
volunteered for the charity and
spoken about his experiences at
events. He is a member of CLIC
Sargent’s Children and Young
People’s Advisory Group.
StePheN rimmer
Barnardo’s has named Stephen
Rimmer as impact and learning
director. He will help ensure
Barnardo’s new 10 year strategy
is delivered effectively. A former
director general of the Home
Office’s Crime and Policing Group,
he was most recently strategic
adviser to the Commissioner of
the Metropolitan Police.
elliot baNCroft
Rathbones has appointed Elliot
Bancroft as an investment director in the
charities team, based in London. Elliot
has over 13 years’experience of advising
and managing charitable assets. He
previously worked at Investec Wealth &
Investment for eight years in a similar
capacity, and as trustee and treasurer of
a young persons’charity he brings with
him an understanding of the sector.
terry riCh
Terry Rich has been appointed chair of
Avenues Group – a group of non-profit
organisations supporting people with
complex needs arising from learning
disabilities, autism, acquired brain injury
or dementia. In a long career in the
health and social care sector of local
government, Rich has worked to lift
standards and introduce integration
across health and social care.

Events
Diary
money age awards
13 October
Millennium Hotel Mayfair
http://moneyage.co.uk/awards/
IFC 2016
18 - 21 October
The Netherlands
http://bit.ly/1VNahLn
soCIal medIa rIsks Forum
17 November
South Place Hotel, London
http://socialmediarisks.co.uk/
Better soCIety awards
11 May 2017
Millennium Hotel London Mayfair
http://bettersociety.net/awards/
CharIty tImes awards 2016
28 September 2016
Park Plaza Westminster Bridge,
London
The Charity Times Awards reaches its
17th year in 2016 and this highly
successful, popular, and growing
annual gala event will be bigger and
better than ever. The Charity Times
Awards continue to be the pre-
eminent celebration of best practice
in the UK charity and not-for-profit
sector, and a key annual event in
recognising and celebrating those
who make a difference. Rewarding
excellence across almost 30
categories, bookings are open now.
charitytimes.com/awards/
CharIty Fraud ConFerenCe
28 October 2016
Royal College of Physicians, 11 St
Andrews Place, London NW1 4LE
The second national charity fraud
conference will bring together senior
figures from the charity and counter-
fraud worlds to discuss the fraud
challenges charities face, highlight risks,
and share best practice in fraud
prevention, detection and response.
Confirmed speakers include
representatives from: Amnesty
International, Big Lottery Fund, Charity
Commission, City of London Police,
Fundraising Regulator, Oxfam GB, and
Weber Shandwick.
www.fraudadvisorypanel.org
nCVo/BwB trustee ConFerenCe
7 November 2016
The Brewery, London
Charities are under the spotlight. It is
crucial to understand your
responsibilities and keep up to date
with the latest developments in
governance. Attend this event to get
essential updates on regulation, to
explore what board leadership
should look like in the current
climate and for a unique opportunity
to meet and learn from peers.
Trustees, chairs, honorary treasurers,
chief executives and anyone who
works with a governance board will
find the day particularly beneficial.
www.ncvo.org.uk
September
2016
Not to miss...

With public trust and confidence in charities strained it is important for
the sector to be more open and honest about fraud
Fraud
Column
A
s the saying goes: prevention is better
than cure, and this applies equally to
sickness and fraud. In the current
economic and political environment never has it
been so important for charities to be aware of
the risks of fraud and to maintain good
housekeeping practices to protect themselves,
their donors and their beneficiaries. There are
three main reasons for this.
the increasing threat
Fraud is now the most common crime in the
United Kingdom. The latest official statistics
show that almost six million fraud and cyber
crimes were committed last year. The average
person is 10 times more likely to be the victim
of fraud than theft.
Although there are no recent figures available
for how often charities are hit by fraud the cost
to the sector could be approaching £2 billion a
year. More generally, about one in every two
UK organisations (regardless of size and sector)
could become a victim of economic crime
within the next two years.
This means that for the vast majority of
charities it is now a question of ‘when will we
be hit’ rather than ‘if’.
the police can’t deal with everything
The sheer volume of fraud means that it is
almost impossible for the police to deal with
every reported case and it is unrealistic to
expect them to.
Over the past few years there have been sharp
cuts to budgets in almost every area of criminal
justice and the picture is bleak: limited police
resources nationwide, few reported frauds
investigated, long drawn-out prosecutions with
unpredictable outcomes, and a poor deal for
many victims.
Although the police and prosecutors may be
more likely to take action against charity
fraudsters because it is in public interest, this is
not inevitable (especially in cases perceived to
be ‘low value’) and in any event it does not
guarantee the return of any monies lost.
public confidence matters immensely in
fighting fraud
With survey data from the Charity Commission
showing public trust and confidence in charities
at a 10-year low, it is important for the sector to
be more open and honest about fraud and
demonstrate that proactive steps are being taken
to prevent it.
Collectively the sector has already made some
good progress in addressing fraud issues: a
national charity fraud conference was held last
year with another one planned for this coming
October, a new Charity Sector Counter Fraud
Group (CSCFG) has been set up by the Charity
Commission to bring charities and professional
bodies together to share information about fraud
risks and good practice. A dedicated microsite is
expected to be launched in the Autumn.
fraud happens. it’s how you manage it that
counts
Fighting fraud is a job for everyone at every
level. It begins with good governance, the right
culture and sound financial management.
Charities need to understand and assess the
risks they face and then take proportionate steps
to manage them. These measures do not need
to be complicated or expensive and they can be
as simple as segregating finance duties,
regularly reviewing bank statements, and
conducting reference checks on new employees
and suppliers.
Although the creation, adoption and
maintenance of anti-fraud measures does cost
money, they can act as a powerful deterrent to
would-be fraudsters. Ultimately it is often
cheaper to prevent fraud from happening in the
first place than it is to deal with the
consequences of inaction later.
The Fraud Advisory Panel and Charity
Commission are hosting the second national
charity fraud conference on Friday 28 October
in London.
For more information visit, https://www.
fraudadvisorypanel.org/events/
tackling-fraud-in-the-charity-sector/
Why fraud prevention matters
david kirk
is chair of
the fraud
advisory panel

CFG
Column
Brexit
Caron Bradshaw
is Chief exeCutive
offiCer of
the Charity
finanCe Group
we need to Break the neGative CyCle and respond positively
to Brexit
E
veryone is talking Brexit. My inbox is
flooded with newsletters – mostly saying
the same thing; we don’t know much yet
and we need to watch this space. At the risk of
adding my two pennies worth to the pile I want
to invite you to consider what your charities
should be doing in response.
Brexit appears likely to have a mainly
negative financial impact on the sector.
Although some charities receiving dollar
dividends from investments might see an
increase in the value of their portfolios whilst
the pound remains weak against the dollar. Our
pension valuations, grant making, loss of EU
funding, and the impact of foreign exchange
on delivering overseas programmes all need
to be considered.
Charities need to examine their income
streams and consider the sensitivities. I would
encourage you to read the CFG, IoF and PWC
Managing in a New Normal series, which charts
the experiences of the sector since the credit
crunch. It isn’t a roadmap for how charities will
or should respond, but offers an indication of
how the sector has previously responded in
financially turbulent times and highlights
income streams that may be affected. We need
to use the time wisely before the final Brexit
deal is made, to reflect and plan ahead.
Charities need to think about the communities
we serve. Many people desire change. There is
disquiet about the hollowing out of our
regionally based industries, anger at the
widening gap between rich and poor, dismay at
the lack of long term infrastructure investment
by successive governments of all colours, and
bemusement at the absence of a non-partisan
solution to the challenges facing our NHS.
Our political system incentivises short term
thinking; pursuing objectives and policies which
play to the populist mindset of the day. Charities
can smooth out the impact of such thinking. We
can offer solutions to the challenges highlighted
by the Brexit vote and could play our most
important role to date.
To do this we need a united and strong sector.
So, we must stop arguing over whether we have
become detached and disconnected from those
we serve and bloated on self-interest. We have
not. It may be that overall our sector reflects a
more ‘remain’ narrative and some will see us as
part of the establishment. But that is not the
whole story. Ask if the community group is
seen as elite. I doubt the answer will be yes.
We have become wrapped up in a narrative
assigned to us and in negative press coverage,
scandal and fear. We need to break the cycle
and respond positively.
The EU referendum is widely seen as a vote
intended to give the establishment a bloody
nose more than a reflection of a fact based
rejection of how the EU operates and what it is.
This disconnect and fear risks infecting and
breaking the very thing that stands a chance of
doing long term good in society – charity.
How do we respond? Charities should speak
up. We must advocate on behalf of the causes
we serve. Not just seeking to influence
politicians and regulators but to influence and
shape what our communities think and feel. We
must not just listen to and understand their
challenges, we must find solutions and press all
MPs to put the needs of our marginalised and
disconnected communities before party politics.
We must lead in what we do and not simply
be the mouth piece for the loudest or more
popular opinions. This is not about patting the
public on the head and telling them we know
best, it is about connecting with and co-creating
the answers to the most difficult social questions
that successive generations and successive
governments have failed to crack.
Although there will be more pressure to be
quiet and less opportunity to speak to those in
power, we must raise our voices not lower them.
Society is crying out for an economy that
deeply and lovingly serves the whole of society,
one that connects us with the world. We have a
chance to deliver positive change but we must
be brave enough to lead in the turbulent times.
To quote the great Mahatma Gandhi, ‘be the
change you wish to see in the world’. ■

the reCent outCry over a Charity employee’s Comments on soCial media
hiGhliGhted some diffiCult issues
ICAEW
Column
I
was recently on leave for a week and, thanks
to a flat battery, was largely disconnected
from the internet. Before I left there had
been some pictures released of Prince George
to celebrate his birthday, when I returned I was
quite unaware of the media storm that had taken
place about them.
Unless you were similarly disconnected I’m
sure you know the story. But for those not in the
loop, an employee of a very large London-
headquartered charity made disparaging remarks
about the Prince on her personal social media
account. The comments were picked up by the
press, sparking outcry among a section of
readers and social media users.
This is not about the rights and wrongs of
what was said, nor what future actions if any
should follow, but I think the event raised a
clear example of further challenges for charities
and individuals as the digital and social media
world continues to develop.
I doubt that the media storm was really driven
by the content. What she said does make me
uncomfortable, but it is far from the worst of
what is out there on the internet. What made
this a press story was the apparent contradiction
between her position and her employer’s, and
the issue of who should or shouldn’t be
supported by the taxpayer.
The issue of taxpayer support raised again
the spectre of charity staff remuneration. Her
salary may or may not be high based on London
charity comparatives but it certainly is in
relation to the national average wage,
highlighting the challenge that charities face
justifying to the tax paying public what they
pay their staff.
Many people on considerably lower wages
than the charity employee in question feel they
are justifiably rankled by the perception of high
wages in charities. Furthermore, there is a large
proportion of the population who support the
royal family and consider the benefits outweigh
the cost. On the other hand, the relationship
between cost and benefit is often not something
they understand about charities.
In addition, the coverage of this raises for all
of us the matter of what is public and private
especially in relation to our employer. Leaving
aside whether you agree or disagree with what
the employee said, she believed she said it in
a private forum, perhaps now she wishes she
had not. However, we all say things outside of
work which we would not be very happy to be
made public.
She is probably not someone who thought her
private comments would ever attract press
attention. This is true of most UK charity staff,
while there may be some in the sector who are
prepared for media attention due to family
connections, past achievements or errors, the
majority are reasonably unnoteworthy and
entirely unprepared for something like this.
Clearly what was said conflicts with the aims
of her employer but we can’t delude ourselves
that everything we say or think in our private
lives would gain the approval of our employer.
Perhaps the challenge for us as individuals is to
reconsider our assumptions about what
constitutes ‘private’ on social media.
Her employer is investigating the incident
under their procedures, the difficulty here I
imagine is associating something done in
private with the obligations to the employer.
Most employment contracts have wording to the
effect that prohibits behaviour which would
bring the employer into disrepute. The issue
here is to how far can that extend? This incident
brought her employer into the public eye not
because she made this public but because
someone else did, how are we going to grapple
with this in future?
I can’t imagine how difficult this is to deal
with but it forces us to notice that more of what
we consider private may be changing. Charities
may find greater complexity in managing the
changing division of the public and personal
lives of their employees. For charities facing the
challenge of gaining public trust and confidence
and continued donor support this presents a
difficult risk to negotiate but one that won’t
go away. ■
Social media
Gillian mCkay
is the head of
Charities and
voluntary
seCtor at
the iCaew

Fundraising
Column
Trust
Peter Lewis is
chief executive
of the institute
of fundraising
charities, and PoLiticians, need to focus on being trustworthy, not on
generaL LeveLs of trust
‘T
rust in charities at lowest level since
monitoring began’ – we have all seen
the headlines in recent months, and
Charity Commission data on trust in charities
shows it has fallen 10 percentage points in the
past four years. But what does it really mean
when we hear that ‘trust’ has fallen in our
organisations, and what should or can we as
charity leaders do about it?
I believe leaders in the sector need to focus
not on generic levels of trust, but on our
organisations being trustworthy. I would urge
everyone thinking about the future of the charity
sector to listen to the erudite exposition on trust
Baroness Onora O’Neil, Professor of
Philosophy at Cambridge University and cross
bench member of the House of Lords delivered
at TEDxHousesofParliament1
.
Baroness O’Neil’s basic proposition is that
focussing on polling or survey data of generic
levels of trust is wrongheaded, and that aiming
to raise generic levels of trust is not in itself a
good objective. We should be aiming for higher
levels of trust in people or institutions that are
indeed trustworthy, but not in ones that are not.
We should trust charities who do what they say,
but not ones who don’t.
The lessons for leaders in the charity sector
are clear – our organisations need to focus on
being trustworthy, and proving our
trustworthiness to the general public and
supporters. To take the example of fundraising,
the closer your relationship with your
supporters, the easier it is to prove to them you
are trustworthy. When someone has given
money towards the cause you take forward, you
demonstrate what you have achieved with their
contribution, showing that you are trustworthy.
In this context it is interesting to note that
over the past year, data from the Managing
in the New Normal report and from Rapidata
shows that current donors are continuing to
give to the causes they support. To me, this
is evidence that people are continuing to trust
the charities they already support, despite
the negative headlines.
I argue that Baroness O’Neil’s analysis is a
positive one for UK charities. I believe the vast
majority of charities are trustworthy. In the case
of fundraising many have clearly demonstrated
that trustworthiness over the past year by
listening to donor and public feedback and
improving their practices as a result. Perhaps the
final stage is for those charities to provide even
more evidence of these changes and improved
practices, while talking about the positive
change it is making in the world.
My concern is that all this may not be enough
to raise generic survey data of levels of trust in
the short term, as these include the opinions of
people who are further away from charities, less
likely to have seen both the impact and the
changes that charities are making.
The most relevant questions we should be
asking are, ‘do you trust the charities you
donate to?’ or ‘do you trust the charities you
volunteer for’ or ‘do you trust any charity from
whom you receive services?’ where the answer
is more likely to be informed and differentiated,
showing people making judgements based on
their actual experiences rather than on an
abstract idea of trust.
And a final thought: we are not alone! Trust
in institutions is falling in many walks of life.
Trust in politicians is notoriously low, but trust
in an individual’s own MP is typically much
higher. The EU Referendum provided another
example. The vast weight of evidence from
‘recognised’ experts and institutions seemed to
rest with the Remain campaign. But they, or the
politicians putting their case, were clearly not
seen as trustworthy by many members of the
public who still chose to vote to leave.
As charity leaders we need to focus efforts on
ensuring that our charities act in a trustworthy
way, and demonstrate this to the public. It might
not be enough to shift generic levels of trust
in the short-term, but it will show to those
who donate to us and benefit from our work
that they are right to put their faith in our
organisations, and over time should also
change wider public perceptions. ■
1
https://
www.youtube.com/
watch?v=1PNX6M_
dVsk

thoughts from a former Life
Property
Column
E
leven years ago, after an enjoyable career
as a business journalist writing for
London and Scottish national papers, I
decided the time had come to grow up and get a
proper job. However as a non-profit CEO I soon
learned the hard way just what an easy billet I’d
had all those years, reporting on markets and
writing up commercial property deals, compared
to writing grant applications and dealing with
trustee politics! Here I offer a few transferable
thoughts from my former life.
1 - There are people everywhere hell bent
on making your property their property
As a business journalist one develops a nose for
trouble and fly behaviour. Charity folk tend to
be far more interested in their cause which
makes them vulnerable to wolves in sheep’s
clothing, keen to help out by taking the
organisation’s property off their hands. Judge
people by what they do, not what they say.
Property is not just bricks and mortar,
remember. Bankable assets can include
intellectual properties, government contracts,
even reputation. And once these assets are gone
they’re gone. I could fill pages with the sorry
tales of unworldly charities which lost assets
because of entryism onto weak and unwary
boards of trustees.
Spare a thought for CEOs and FDs who can
only watch as trustees are picked off so that
Chummy and his/her acolytes can get their
grubby hands on the assets. People can be
surprisingly cheap. So what’s your price?
Hopefully it is above rubies, and if you have to
walk, make sure you hire the scariest lawyer
you can afford.
2 - There is no special cuddly set of
property rules for charities
One of the reasons why charity folk are
vulnerable in commercial property negotiations
is that they think charities can play by different
rules from the business world. No business
makes this mistake. Thinking that you are all on
the same side is about as realistic as arriving at
your dream holiday destination and expecting
there to be no crime.
Last week a nice chair who sought advice
about taking on a property from a charity, asked
me if there was a special charity-to-charity lease
– ‘nicer’ than a normal lease. Sadly a lease is a
lease is a lease. In my experience there are good
hearted, honourable people in every sector and
if you’re lucky you’ll do business with them.
But if you are in a renting situation, the old
feudal relationship between landlord and tenant
remains stuck in the Norman Conquest era. We
have a long way to go before landlords start
seeing tenants as clients.
3 - Disconnections bring opportunities
As a journalist I was lucky to interview leading
disrupter business people across every sector in
the ’90s and the Zeros. Besides incredible self-
belief they all shared the same attitude to
disconnections, gaps in the market and
recessions. They saw them as opportunities and
worked around the dinosaurs who thought they
had the world taped. Charities too can benefit
when they are lean and can spot and offer the
value others can’t.
Way back in 1990, sellers were so desperate
to offload London properties they would go
from pub to pub selling raffle tickets. This was
an early story of mine as a rookie writer. When
I describe this to people who have only known
rising property prices they look at me in
disbelief. Yet property fortunes were made
back then, even with 15% interest rates, and
charities also bought cheap and created
fantastic social benefit.
So after 11 years as a business journalist-
turned-CEO, I have learned that despite
differences in governance and funding cycles,
charities are no different from any other
business: they fail and thrive for exactly the
same reasons and crucially their attitudes
toward property and assets play a major part.
I’ve also learned that even on the stressful days,
it so much more fun running an organisation
than writing about it! ■
Property
antonia
swinson is
chief executive
of the ethicaL
ProPerty
foundation
and author
of‘root of
aLL eviL?’

Profile
Interview
I
t’s not the Charity Finance Directors’ Group
any more.
Rebrands can often be little more than
expensive ways of making an organisation’s
website unfamiliar, but the change programme
Charity Finance Group has pursued over the
past six years has been no mere facelift.
Chief executive Caron Bradshaw, named
Charity Principal of the Year at the 2015 Charity
Times Awards, has driven the overhaul of the
CFG from the very beginning to now where all
the major components are at or near completion.
Joining CFG in 2010 and in her first chief
executive role, Bradshaw was immediately
asked to review the organisation’s new three-
year strategy to determine whether it was fit
for purpose.
An opportunity she characterises alternately
as “daunting” and “brilliant”, getting down to
brass tacks started a journey that has represented
one of the most significant changes to the
organisation in its 29-year history.
“The journey started the minute I walked in
the door with the invitation to go away and
think about where we go next as an
organisation,” Bradshaw says. “It was a very
explicit ‘we want you to take us to the next
level’. My sense was the next level was around
changing the way we think about finance and
the way we talk about it.”
Overall the refocus has been about relating
finance and financial management back to the
cause. Not just excellent financial management,
but how this serves beneficiaries.
“You don’t take on a role in finance in a
charity so you can wave SORP compliant
accounts in front of your friends at dinner
parties. You do it because you’re passionate
about the cause, you just happen to express it
through a skillset that is rooted in finance.”
This applies to CFG as well. Bradshaw says
the organisation is focused on its part in how the
sector delivers change.
“Ultimately we’re not here to prop up
charities. We’re here to deliver social change
for beneficiaries.”
CFG
Established as a support and knowledge sharing
network for charity finance professionals in
1987, since its early days CFG has steadily built
up a diverse and widely-used suite of training
and support resources across a variety of
channels.
The charity also offers a range of events
at a regional and national level, and has
developed a meaningful voice in its policy
and advocacy work.
Now counting almost 1,400 charities among
its members, the group has widened its focus
to take in a greater wedge of the sector than
strictly finance professionals.
“I think we’ve now started to change the
Big bang theory
Charity FinanCe Group took on a
lot in its nearly-Completed ChanGe
proGramme, and now FaCes the
Future reFreshed. Ceo Caron
bradshaw told matt ritChie about
the Charity’s new approaCh
Profile: Caron Bradshaw

Profile
Interview
conversation. I wouldn’t say that we’re there yet
it but I certainly hear us talking much more
about finance as an enabler, about financial
leadership, about people and people skills rather
than pure technical knowledge,” Bradshaw says.
“CFG’s moved from being a really good solid
organisation that did great financial skills stuff,
to one that is talking much more about the way
in which finance can change and make the
sector more effective.”
But the change programme has required
significant energy and resource, and hasn’t
always been easy.
Change
CFG’s change project saw the organisation
restructure its executive team, carry out a
governance review, change its name and
branding, shift office and update its systems.
Unsurprisingly given how comprehensive
the project was, it wasn’t universally popular.
Personnel changes in particular saw the
organisation come in for criticism and Bradshaw
admits it was a “really challenging” part of
the process.
Cost was also a factor, with the change
project contributing to CFG’s free reserves
falling from £249,096 in 2012/13 to £61,586
in 2013/14.
However, this situation was reversed in less
than 12 months with reserves back in the black
at £184,271 at the end of 2014/15.
CFG’s annual results also revealed an increase
in income and a reversal in the trend of
declining membership.
Asked whether taking a more gradual
approach to change may have resulted in a
smoother process, Bradshaw points out that in
the absence of a control scenario there’s no
telling whether taking more time would have
made a positive difference.
“That big bang approach meant we had to
tighten our belts and deal with quite a lot of
problems at once, but if we’d have just done a
little bit here and there would we have had the
profound change in approach we’ve got?
Although it’s taken us a lot of work and effort
we were able to return our reserves to within
our range within a single year. If we’d have
done it a bit more ‘drip drip’ maybe we
wouldn’t have achieved that so quickly.”
the future
CFG has now completed the thorniest parts of
the programme and Bradshaw says she can’t see
any further major restructuring projects on the
immediate horizon.
“But I think there is still huge change for us
as an organisation because the sector in which
we’re operating is massively changing,” she
says. “We have to do a lot of thinking around
how we help the sector position itself so it can
square off the notion of it being a voluntary
amateur sector, with the reality - particularly on
the end we engage with and service - of being
highly professionalised, dynamic, and strategic.”
But a glance at CFG’s list of member charities
does not tell the whole story about the service
the organisation provides to the sector.
“In the early days I said to the trustees that
the dichotomy is that if you’re going to raise
financial standards the people that need you
most are the ones that can least afford you,
probably don’t know you exist and so won’t
be in membership. So how do you square
that circle? We couldn’t possibly provide
services to 165,000 charities. But we can
provide support, resources, information, and
a way to reach them.”
Bradshaw points to CFG’s lobbying on the
Gift Aid Small Donations Scheme as an
example of how its advocacy work extends
beyond the needs of its members. Members
support the group’s focus on the health of the
sector, Bradshaw says, and a new project is
about to take the principle further still.
Thanks to a “sizeable” grant from the Esmée
Fairbairn Foundation, Charity Finance Group
is piloting a small charities programme to help
support those organisations that need it most
but are least likely to be able to access help.
“That excites me, particularly given the
absence of any support for financial capability
over successive governments and successive
initiatives,” Bradshaw says. “I hope the
project is going to be something fabulous
that changes the way charities are supported
across the sector.” ■
“ultimately we’re
not here to prop
up Charities.
we’re here to
deliver soCial
ChanGe For
beneFiCiaries”
www.cfg.org.uk

T
he charity sector’s response to
the annus horribilis that was
2015 has in many ways
reflected the seven stages of grief.
At first there was shock and denial,
then pain, quickly followed by
anger, blame and in many cases,
depression and reflection. While
there are some fundraisers who are
still nursing their wounds and
feeling quite demoralised by the
whole state of affairs, others have
been able to move on to the
reconstruction phase and are
beginning to take some real and
practical steps towards improved
fundraising practice.
First, some context. For those at
the centre of the scandals, it was
hugely difficult. Agencies went into
administration, hundreds of people
lost their jobs and dealing with such
public criticism was more than a
little difficult. Donor recruitment
also suffered – according to the
Managing in the New Normal report
from the IoF, CFG and PwC,
acquisition rates were down from 37
per cent to 27 per cent, while
organisations such as the RSPCA
have reported that finding new
donors has been harder than usual.
Public trust and confidence has also
been found to be in decline.
However, it wasn’t all bad.
Attrition rates (the number of donors
that charities keep each year) were
positive with only a 5 per cent fall
being reported compared to 17 per
cent the previous year. This finding
was reflected in Rapidata’s direct
debit tracking report, which found
that although there were some
marked differences in cancellation
trends, overall there was no
detrimental long-term impact on
regular giving – all of which
indicates that those people who
already support charities are happy
to continue doing so, regardless
of what the British tabloid media
may say.
That aside, what the coverage did
do was highlight some fundamental
inadequacies within fundraising
practice, which if left unaddressed,
did have the potential to have long
and lasting damage on income.
Among these was the realisation that
many charities did not embed their
organisational values within their
fundraising; that many of the
techniques used were in drastic need
of modernising; that trustees were
woefully uninformed of fundraising
practice; and that fundraisers’
relationships with their boards, their
agencies, their comms teams and
even their supporters had been
seriously neglected.
Change
We have heard much about sector-
wide changes, such as the enhanced
Code of Practice from the Institute
of Fundraising (IoF), the launch of
the new Fundraising Regulator, and
the merger of the IoF and the PFRA.
But how have individual charities
reacted to the scandals and what
changes are they making as a result?
One of the initial responses from
those implicated in the coverage,
either directly or indirectly, was to
contact supporters to explain how
and why they fundraise, and to invite
feedback about the level of
communications they receive.
“Asking supporters how they
wanted to be contacted helped make
them more loyal.” says Peter Lewis,
chief executive of the Institute of
Fundraising. “In a way, making
yourself vulnerable by opening
yourself up to feedback and the
possibility that people may say
they don’t want to hear from you,
contributes towards making
yourself trustworthy”
Other charities quickly launched
reassuring statements and initiatives,
such as Save the Children and its
Supporter Promise, in which it
presented new safeguards to ensure
its supporters have greater control
over how they give and are
contacted. Among its list of promises
was the commitment to never
contact people if they ask the charity
not to and a change to the opt-in and
opt-out messages on its online form.
The impact of this was swift –
leading to a rise in the proportion of
supporters opting out of
communications from less than 5 per
cent to 60 per cent.
Since then, other charities,
including RNLI, Barnardos and
Cancer Research UK, have gone on
to introduce ‘opt-in only’ policies
Fundraising
Standards
Raising the bar
F U N D R A I S I N G
Media coverage in 2015 made for uncomfortable reading for fundraisers. What steps
has the sector taken to adjust practices and approaches in the wake of such an awful year?
WRITTEN BY BECKY SLACK, A FREELANCE JOURNALIST

– often at great risk to short-term
fundraising income. The RNLI for
example predicts that the policy will
lose the charity £36m in income
over the next five years (equating to
around 19 per cent of its 2014 total),
while Cancer Research UK (CRUK)
also anticipates losing millions as a
result of the change.
However, as Ed Aspel, executive
director of fundraising and
marketing at CRUK, explains, the
short-term pain should be off-set by
long-term gain.
“There is no doubt that when you
move to opt-in there are fewer
people to contact so it does have an
impact. However, we believe that the
greater level of trust and
commitment we will receive will
serve us well into the future,” he
says, before confirming that already
the charity is enjoying greater
engagement from its face-to-face
relationships.
“What this tells us is that if we
can start to invest more time and
effort into local activities and those
personal connections, then there is
real value for us,” he says.
New approaches
It is high time that charities
developed some new tools and
techniques by which to reach
supporters. As Joe Jenkins, director
of fundraising and supporter
engagement at the Children’s
Society, noted in a recent blog for
the fundraising think tank, Rogare,
“…every time any charity creates a
new approach, its concept is
immediately imitated, replicated at
scale, and oversaturated. Time and
again, what initially feels fresh and
remarkable quickly become stale,
laughable and irritating. Like a
rampant virus, every success quickly
spreads across our sector – and
suffocates its host.”
Grant Leboff, founder at Sticky
Marketing and a commissioner on
the newly formed Commission on
the Donor Experience builds on this
theme: “Charities are struggling, as
are many commercial brands, to
come to terms with a digital world.
Customers identify with brands in a
very different way to years ago.
What this means is that as traditional
interruption marketing has become
less effective, charities’ response has
been to do more, rather than change
what they do.”
In his view, charities have got to
stop interrupting people and start
being more interesting. “We’re
living in an experience economy,
where marketing isn’t something
that is done to you but with you.
Click and share, we want to be
part of it. That means you have
to be much better at narrative
and storytelling. It’s about
providing value, not just about
shouting at people.”
Since the Olive Cooke tragedy,
this message has well and truly been
brought home and many charities of
all shapes and sizes are looking at
how to provide a better experience.
World Vision, for example, recently
launched a pop-up “Story Shop” in
London’s Westfield shopping malls,
which offers shoppers the
opportunity to interact with around
100 individual stories about World
Vision’s work around the world.
Cancer Research UK too is
looking at how to improve the
supporter experience, having
recruited new team members to
focus on precisely this issue. It is
also in the midst of developing new,
yet-to-be-announced fundraising
products and platforms that put the
supporter more in control of how
and when they want to offer support.
One of the many criticisms
levelled at fundraisers was around
the way in which they managed
supporter data, and again charities
have been busy adapting and
amending their policies. Take the
RSPCA, for example. It no longer
shares supporter data with any third
party, has improved its statements
around its use of data, and has
Fundraising
Standards
www.charitytimes.com 21www.charitytimes.com

made it much easier for donors to
change their preferences at any time.
“There is far more oversight,
quality assurance and monitoring
of the agencies that work on our
behalf,” explains Julian Holmes
Taylor, RSPCA’s assistant director of
income generation. “We also apply
the same enhanced rigor internally
around the use of
data, consent and managing
outbound communications with
our supporters.”
For the IoF’s Lewis, these changes
are welcome. However, in his view
there is something more fundamental
that is needed than just altering
statements and developing new
products, and that is that charities
absolutely have to put their core
values at the heart of all their
fundraising.
“The big lesson for me has been
about the need to embed a charity’s
values in its fundraising. Some
charities had perhaps not focused on
delivering their values through their
fundraising in the same way they
would do through their services and
through their campaigns, and at a
strategic level this realisation has
been a big wake-up call,” he says.
“This means not just looking at
fundraising from a legal perspective
but from a values perspective as
well. To a certain extent this is
because trustees and CEOs have
been more interested in delivering
the charity’s work than they have in
fundraising,” he adds.
Governance
Indeed, the lack of fundraising
oversight afforded by trustees was
another area that was singled out for
criticism, and just as charities are
now looking for ways to enhance
the supporter experience, so too
are they looking to strengthen the
relationships between their boards
and their fundraisers. Again, the
RSPCA offers a case in point – it
has put in place an Income
Generation Committee, attended by
trustees, to enable the board to have
“closer oversight and understanding
of our fundraising activity”.
However, there are some in the
sector who feel that these
relationships will not be as easy to
build as one would hope. A review
of relationship fundraising by
Rogare, for example, found that
most participants felt their boards
would not back them in delivering
long-term fundraising goals but
would instead force them to focus on
short-term targets. Only time will
tell whether trustees have listened to
what is needed from them.
Trustees are not the only groups of
individuals with whom fundraisers
are trying to build better
relationships with. Perhaps not
surprisingly, PR teams are another,
with many fundraisers working more
closely with their communications
peers to identify both potential risks
and storytelling opportunities –
activity that is supported both
directly and indirectly by the likes
of the Understanding Charities
group and the Commission on the
Donor Experience.
Agencies
Quite rightly, relationships with
fundraising agencies have not
escaped internal scrutiny either. In
the wake of the negative coverage,
charities have reviewed the way in
which they work with commercial
Fundraising
Standards

suppliers. In addition, the Institute of
Fundraising has recently issued new
guidance, Successful Partnerships
for Sustainable Fundraising: a
practical guide for charities, aimed
at improving the way in which the
two sectors work together.
Outlining the “fundamental
building blocks and key
considerations that charities and
agencies should be thinking about
when agreeing and undertaking
fundraising with the public”, it
covers everything from planning and
preparation through to monitoring
and evaluation.
Importantly, it acknowledges how
both agencies and charities are
susceptible to changes in the
fundraising and wider political and
media environment, and advises that
agreements should include provision
for unexpected issues, such as
needing to suspend or withdraw a
campaign.
“Be mindful of the impact for both
the charity and the agency (in some
cases redundancy, or even closure),”
it states.
“It is really, really important
for charities to have strong
relationships with their agencies,”
emphasises Lewis.
“The current level of scrutiny is
not going to go away. We want a
high standard of fundraising
delivered at all times. Close
relationships should help deliver
those high standards,” he says,
adding: “Agencies need to be clear
that if they can’t deliver the required
standards and they don’t like what
the charity is offering [in terms of
fees and targets] then they shouldn’t
take on the contract.”
It could not be said that
fundraisers have not worked hard
to address the issues raised by the
media last year. But their work is
far from over. The launch of the
Fundraising Preference Service is
looming on the horizon, as too are
new EU regulations around
unambiguous consent. Meanwhile,
fundraisers are still waiting to learn
more about the new commissioner
at the Information Commissioner’s
Office and any changes that this
individual may be keen to see.
Likewise, there is a general
consensus that the pressure and
scrutiny placed on fundraisers is
unlikely to go away, and that
continual learning and improvement
will be essential.
“As long as charities continue to
improve and keep focus they will do
well,” says CRUK’s Aspel, a view
that is reiterated by RSPCA’s
Holmes-Taylor: “It is so easy to give
regularly without having a proper
relationship with a charity. I think
this may be the next change in the
sector whereby charities will focus
more on the inspiration of why
people give.”
Just as the final stage in the grief
process focuses on acceptance and
hope, Lewis believes that it is vital
the charity sector takes a more
positive attitude to its fundraising.
“To their credit fundraisers have
done an amazing job over the last
18 months continuing to bring
vital money to make the world a
better place. But many people still
feel bruised, so building morale
is important.
“My message to fundraisers
is simple. Keep caring about the
cause you are fundraising for,
do it in accordance with your
organisation’s values and keep
enjoying the changes you are
making to the world.” ■
Fundraising
Standards
23www.charitytimes.comwww.charitytimes.com

I
magine there were a partnership
between, let’s say, a large
supermarket and a mental health
charity. The deal is that in exchange
for staff and customer fundraising,
the charity would help the retailer
develop an effective internal mental
health policy and would deliver fun
but educational sessions on
maintaining a healthy mind for staff
and customers. The charity raises
money while meeting its mission;
the supermarket has a stronger team
and enhances its offering for
customers; shoppers are healthier
and happier. It’s a win-win-win.
This could be the future of charity/
corporate relationships. Indeed, in
some quarters it already is. These
days corporate fundraising is not just
about getting a business to hand over
a cheque. Instead the focus is on
high-value strategic partnerships.
Strategic partnerships
As the 2015 Corporate NGO
Partnerships Barometer from the
consultancy C & E Advisory shows,
over the last six years there has been
a “significant overall shift towards
strategic partnerships” – 55 per cent
of cross-sector partnerships are
identified as “strategic” as opposed
to transactional or tactical.
“The days of pure philanthropy
are long gone”, explains chief
executive, Manny Amadi. “The
perfect partnership is one that is
mission-led on the charity side, and
purpose-led on the corporate side.
It is strategic, long-term and both
partners are focused on solving
a problem”.
Oxfam’s head of corporate
partnerships, Alex Lankester, agrees:
“We only really want to work with
companies that take seriously the
issues we are working on,” she says.
However, while many charities
understand the value of these
strategic partners, it would appear
others need to catch up. While 71
per cent of corporate respondents to
C&E Advisory’s Barometer classify
their partnerships as “strategic”,
only 40 per cent of NGO
respondents do the same. “The
findings seem to indicate that the
corporate sector remains ahead of
NGOs in understanding the strategic
importance and overall position of
partnerships in yielding value for
stakeholders,” says the report.
Currently, just 2 per cent of the
sector’s total income comes from
business, according to 2015 research
by the Institute of Fundraising and
the consultancy Good Values. With
more than 3.5 million active
registered companies in the UK, and
only 7 per cent of respondents to the
Good Values report believing their
corporate fundraising to be “fully
developed”, there is a lot of potential
for growth.
Corporate
Partnerships
The perfect match
f u n d r a i s i n g
Corporate partnerships can offer a wealth of
benefits but how do you make sure you find the
right company for your organisation?
WRITTEN BY BECKY SLACK, A FREELANCE JOURNALIST

Perfect partners
Jeremy Gould is chair of the
Institute of Fundraising’s corporate
fundraising special interest group
and interim head of fundraising at
World Child Cancer. He suggests
that rather than think primarily about
income, fundraisers should take a
step back and think about which
corporate would be the perfect
partner to help achieve the
organisation’s mission. “For
example, here at World Child
Cancer, our key challenge is a lack
of awareness in the UK so for us our
perfect partner would be someone
that could help us reach a mass
market.” He refers to how a previous
appeal with the Financial Times not
only raised a lot of money at the
time but gave the charity access to
high-net-worth individuals with
whom they have been able to
develop on-going relationships.
Joe Saxton, driver of ideas at
nfpSynergy, also believes there is a
wealth of opportunities out there for
the taking – particularly if
fundraisers apply a little creative
thought to the way in which they
work. In his report, In good
company – Taking corporate
partnerships into new dimensions,
he identifies a number of models
for corporate partnerships, ranging
from those which focus on corporate
customers through to ones which
involve paying to volunteer. His
favourite, however, is “New
products for new audiences”.
Saxton writes: “There are huge
opportunities in the financial
services marketplace for new
products that benefit charities and
provide differentiation amid a
crowded range of hard to distinguish
products… Given the level of
pensions, life insurance, mortgages,
savings, ISAs, and other products
that middle class baby boomers buy,
the potential is huge.”
Saxton identifies that there are
formidable obstacles to developing
these products – conforming to
regulation chief among them.
Indeed, given that Age UK found
itself at the centre of some very
negative coverage about its
partnership with EON which offered
a fixed energy tariff to its supporters
and beneficiaries, Charity Times
readers would do well to question
whether this is a sensible kind of
partnership to pursue.
Offer
The answer to that depends very
much on the deal on offer. Oxfam,
for example, has a charity credit card
deal with the Co-Op, which sees 25p
being donated for every £100 that is
spent on the card or transferred to it.
“You need to be totally
transparent about the agreement to
supporters. We make a real point of
being very explicit about the
commercial offerings we have
available to supporters,” says
Oxfam’s Lankester.
Whether a charity is looking to
develop a new financial product or
simply looking for a charity-of-the-
year partnership, scrutinising the
offering is of paramount importance.
Corporate
Partnerships

There are a number of factors that
should be considered before any
deal is signed, including ethics;
regulatory requirements; and
expectations on both sides.
Let’s take ethics first. Sensible
charities will have guidelines in
place that outline the types of
corporates they will and won’t work
with. Any company whose business
activities are detrimental to the
charity’s cause should be ruled out
immediately.
“More often than not these
decisions are easy to make,” says
James Hails, head of corporate
partnerships at the British Heart
Foundation. “Naturally, you are not
going to see us raising funds through
the tobacco industry, through the
sale of alcohol or the promotion of
unhealthy foods. But food and soft
drinks do remain a focus. We have
a stringent process in place for
assessing the suitability of partners,
including a BHF nutritionist
carefully looking at the ingredients
of every product.”
The Charity Commission
stipulates that a process of due
diligence must be carried out before
engaging in any partnership,
something BHF’s Hails agrees
with the value of. Investing time
and energy into due diligence
“mitigates any potential risk
later in the relationship”, he says.
This risk could come from outside
(would the partnership pass the
Daily Mail test, for example?) or
even internally – many charity
workers abhor the idea of working
with corporates no matter what value
they may offer. Having a defined set
of guidelines from the beginning,
ideally ones that are made publicly
available, can help soothe the
concerns of fellow workers and
supporters, and quash the interest of
journalists who are trying to sniff
out a story.
Tax is another area for
consideration. Sponsorship deals that
involve the use of a corporate’s logo
or which involve the provision of
entertainment and hospitality, could
mean that VAT is payable. Care
should be taken to ensure VAT
and other tax consequences are taken
into account otherwise the charity
could find itself out of pocket. The
Charity Commission offers more
advice on this area, along with
details of the all the rules and
regulations that must be followed in
relation to corporate fundraising.
Delivery
Assuming all legal and tax matters
are complied with, success is then
determined by the way in which
the partnership is delivered.
Challenges should be expected,
no matter how well the two
partners “fit”.
“These might be operational
challenges where one party isn’t
delivering, to issues with the power
dynamic,” says Amadi.
He believes that being clear about
the rules of engagement, and setting
out values and principles at the
beginning can help avoid issues, but
advises: “Even the best partnerships
in the world can experience
problems. It is how you address
these together that is important.”
Another key challenge is around
delivering precisely what the
corporate expects in terms of KPIs.
“They need to see a return on their
investment so want top-line numbers
that will fit their reporting
requirements, such as number of
beneficiaries reached and difference
made,” says Lankester. “However, it
is not always possible to fit a
programme that is addressing
complicated issues into a simplistic
KPI framework. To overcome this,
you need a lot of trust and
understanding. Taking the corporate
to visit the work in action can also
be transformative as it helps them
understand the complexity of what
you are trying to do.”
All that said and done, while
charities should be realistic about
what they can achieve, they
shouldn’t limit their aims or
creativity. “Be bold,” says Gould.
“Corporates can offer some of the
most exciting and impactful
partnerships, and bring great value
in terms of both income raised and
mission achieved.” ■
Corporate
Partnerships

VIEW THE SHORTLIST
28 September 2016
Park Plaza Westminster Bridge, London
Celebrating best practice in the UK charity and not-for-profit sector
In association with Charity Partner
www.charitytimes.com/awards

The 17th Annual Charity Times Awards
Follow us @CharityTAwards #CharityTimesAwards
Over six hundred guests are attending the highly anticipated Charity Times Awards 2016 where the winners will be announced!
Hosted by Mark Watson, this year’s event will be bigger and better than ever, with new surprises in store for guests. Consisting of
a champagne reception, fantastic three course dinner, glamorous awards ceremony and lively after show party, the Charity Times
Awards 2016 will be a night to remember.
SHORTLIST ANNOUNCED
Congratulations to the finalists
Charity of the Year: with an income
of less than £1 million
• The ClementJames Centre
• Create
• The Encephalitis Society
• Maria Cristina Foundation
• Shared Interest Foundation
• Tyne Gateway Trust
of £1 million - £10 million
• Bowel Cancer UK
• Family Lives
• Greenhouse Sports
• Jamie’s Farm
• Money Advice Trust
• Nordoff Robbins
• SignHealth
• The Silver Line
of more than £10 million
• Battersea Dogs and Cats Home
• The Brain Tumour Charity
• The Challenge Network
• Langley House Trust
• Refuge
• YHA (England & Wales)
Best New Charity
• GO! Great Opportunities Together
• Safe Families for Children
• South East London Vision SELVis
• Spark Inside
• Tempus Novo
• Tinder Foundation
• The Tutor Trust
Change Project of the Year
• Barts Charity
• Breast Cancer Now
• Brook
• National Animal Welfare Trust
• Parkinson’s UK
• The Prince’s Trust
• Trinity Hospice Blackpool
Rising CEO Star
• Sophie Andrews, The Silver Line
• Emma Atkins, Dame Kelly
Holmes Trust
• Paul Bott, Vista
• Alex Feis-Bryce, National Ugly Mugs
• Doug Harper, Engineers Without
Borders UK
• Ruth Hunt, Stonewall
• Anna Smee, UK Youth
Fundraising Team of the Year:
with an income under £5 million
• Ashgate Hospicecare
• Community Foundation
for Calderdale
• Everton in the Community
• Penny Brohn UK
• RedR UK
Fundraising Team of the Year: with an
income over £5 million
• Cancer Research UK
• Disasters Emergency Committee
• The Grand Appeal
• Great Ormond Street Hospital
Children’s Charity
• London’s Air Ambulance
• Refuge
• War Child
Charity Principal of the Year
• Jeanette Allen, The Horse Trust
• Sue Farrington Smith,
Brain Tumour Research
• Hilda Hayo, Dementia UK
• Dr Beverley Jacobson, Kisharon
• Sue Threader, The Rochester
Bridge Trust

28 September 2016, London
Find out more: www.charitytimes.com/awards
Campaigning Team of the Year
• Bowel Cancer UK
• Breast Cancer Now
• Diabetes UK
• Shelter
• Sustain: the Alliance for
Better Food and Farming
• World Animal Protection UK
Best Use of the Web
• Career Ready
• Citizens Advice
• Royal Air Force Benevolent Fund
• Shelter
PR Team of the Year: with an income
under £10 million
• Alcohol Concern
• Asthma UK
• Elephant Family & Quintessentially
Foundation
• LIving Streets
• Muscular Dystrophy UK
• Naomi House & Jacksplace
PR Team of the Year: with an income
over £10 million
• Battersea Dogs and Cats Home
• British Red Cross
• Dogs Trust
• The National Autistic Society
• Royal Academy of Dance
• St Joseph’s Hospice
Financial Management Award
• British Council
• Career Connect
• Engineers Without Borders
International Charity
• BRAC
• Hospices of Hope
• Send a Cow
• Shivia
• United World Schools
• Vision for a Nation Foundation
• Y Care International
HR Management Award
• Engineers Without Borders UK
• Royal Town Planning Institute
• St Cuthbert’s Hospice
Social Investment Initiative
• Bridges Ventures and Ways
to Wellness
• Social Business Trust
• The Social Investment Business
Foundation
Community Award
• FoodCycle
• For Jimmy
• GO! Great Opportunities Together
• Newham All Star Sports Academy
• The Scout Associaton
• Volunteering Matters
Excellence in Internal
Communications
• Anchor
• MRC Technology
• Quarriers
• Royal Hospital for Neuro-
Disability
• Twycross Zoo East Midland
Zoological Society
Corporate Community Local Involvement
• AMAR International Charitable
Foundation & Rumaila Operating
Organisation
• Cargill & Henshaws
• The Challenge & Starbucks
• The Clare Foundation,
Buckinghamshire New University & John
Lewis High Wycombe
• Community Links & BNY Mellon
• East End Community Foundation &
20 Fenchurch Street Limited Partnership
• Tower Hamlets Education Business
Partnership & Barclays
Corporate National Partnership Champion
• Action Against Hunger & Carluccio’s
• Comic Relief & British Airways
• Missing People & Outsmart
• Scope & Virgin Media
• Shelter & CBRE
• SHINE, Capita SIMS & TES
• The Stroke Association & Royal Mail
Group
Corporate National Partnership of the
Year with a Retailer
• Cancer Research UK Kids & Teens
& TK Maxx
• CHECT & Vision Express
• CLIC Sargent & Lidl
• Macmillan Cancer Support & Marks
& Spencer
• Oxfam & Waterstones
• Rays of Sunshine Children’s Charity &
The Fragrance Shop
• Refuge & Benefit
• Save the Children, HarperCollins
& Sainsburys

Congratulations to the finalists
Corporate National Partnership of
the Year with a Financial Institution
• BBC Children in Need & Lloyds
Banking Group
• Cancer Research UK, BNY Mellon &
Newton Investment Management
• Earthwatch & HSBC
• Place2Be & Bank of America
Merrill Lynch
• The Prince’s Trust & Natwest
• RedR UK & Lloyd’s Charities Trust
• Refuge & Co-operative Bank
• Sparks, World Child Cancer and
Deutsche Bank
Cross-sector Partnership of the Year
• Brathay Apprentice Challenge - The
Brathay Trust, National Apprenticeship
Service & Campaign Collective
• Children & Young People’s Mental
Health Coalition & Zurich
Community Trust
• Coram & Club Peloton
• Dame Kelly Holmes Trust & AQA
• Epilepsy Scotland, NHS Dumfries
and Galloway, UCB Pharma,
GlaxoSmithKline & Eisai
• National Literacy Trust Hub in
Middlesbrough, Middlesbrough
Council’s Public Health Department
& Bliss
• The Scout Association, Canal &
River Trust, Alzheimer’s Society,
Leonard Cheshire Disability, Guide
Dogs, Mind & Water Aid
• UK Youth & Global Goodness
Corporate Social Responsibility
Project of the Year
• Berkeley Foundation & The Berkeley
Group
• One Foundation & British Airways
• Plan International & CBRE
• Samaritans, Network Rail, British
Transport Police & Rail Industry
Suicide Stakeholder Group
• Small Charities Coalition & IBM
Best Use of Technology
• ActionAid
• Autism East Midlands
• In Kind Direct
• Reason Digital and Gone for Good
• Royal Mail Group
Investment Management
• Cazenove Charities
• Investec Wealth & Investment
• Newton Investment Management
• Quilter Cheviot Investment
Management
• Rathbone Investment Management
Boutique Investment Management
• Church House Investment
Management
• Davy
• James Hambro & Partners LLP
• Mayfair Capital Investment
Management
• Rothschild Wealth Management
• Savills Investment Management
• Standard Life Wealth
• Waverton Investment Management
Advisory Provider of the Year
• Alterline
• Bates Wells Braithwaite
• IFC
• Price Bailey
• Sayer Vincent LLP
Fundraising Technology Award
• Cancer Research UK
• Givergy
• Gone for Good & Reason Digital
• The Grand Appeal
• JustGiving
Outstanding Individual
Achievement
Awarded on the night, to a person
who has demonstrated an outstanding
commitment to the sector.
Book your table: www.charitytimes.com/awards

O
n August 12th 2016 the
Insurance Act 2015 came
into effect: a major piece of
legislation affecting all non-
consumer insurance contracts.
Previously, insurance law was based
largely on the 1906 Marine
Insurance Act, which gave insurers a
lot of leeway to refuse claims. The
primary purpose of the new Act is to
create a fairer balance between
insurers and non-consumer
policyholders, through imposing
new obligations on both parties.
The Act introduces a ‘duty of fair
presentation’ of risks for
policyholders. They must disclose
every relevant material circumstance
of which they have knowledge, or
ought to have knowledge, in a
manner “which would be reasonably
clear and accessible to a prudent
underwriter” – that is, not hidden in
a mass of irrelevant information. All
of the information provided to the
insurer before the point at which a
contract is entered into is seen as
part of this presentation. There is an
assumption that the information will
be provided by senior managers,
who may need to consult colleagues
in order to disclose all the relevant
information.
“[The Act] recognises that the
financial director or whoever
purchases the policy will not have
all the answers and expects them to
consult with those that do before
sending information to the insurer,”
says David Britton, niche director,
charity, at Ecclesiastical Insurance.
“For example they might need to
consult their IT manager about the
purchase of cyber insurance, or their
fundraising manager about events
they may be running.”
Refusing claims
The Act also introduces
Taking cover
f i n a n c e
The new Insurance Act seeks to create a fairer
balance between insurers and policyholders.
Charity Times covers the changes
WRITTEN BY DAVID ADAMS, A FREELANCE JOURNALIST
Insurance
Law

if the duty of fair presentation has
been breached, making it harder for
insurers to void contracts and refuse
claims on unreasonable grounds.
Insurers can still void a contract,
refuse claims and refuse to return a
premium, but only if a breach can
be shown to have been deliberate
or reckless. In cases where the
breach is deemed to be the result
of an innocent mistake, the
following proportionate remedies are
now available.
First, if the insurer can say it
would not have entered into the
contract if it had known all the facts,
it can void the contract but must
return the premium.
Second, if the insurer would have
entered into the contract, but only
under different terms, the contract
can be treated as if those terms
had been applied, even if the
policyholder would not have bought
the policy under those terms.
And finally, if an insurer
would have entered into the contract
but only after charging a higher
premium, it can reduce
proportionately the amount paid to
settle a claim.
The Act also stipulates that any
fraud means the policyholder forfeits
the entire claim, but that this would
not apply to all policyholders of a
group insurance policy if one
policyholder commits fraud.
Warranties
The new legislation also introduces
changes in relation to warranties –
conditions for cover – applied within
policies. Under the previous law, a
breach of a warranty meant the
insurer would be freed from liability
for a claim, even if the breach was
unrelated to the type of loss suffered
by the policyholder. Under the new
Act, in the event of a warranty
breach cover is suspended only up to
the point at which the breach is
remedied by the policyholder.
“Prior to the [2015] Act insurers
may have added warranties to a
policy to require that a customer
must do or must not do a certain
thing,” says Britton. “For example,
if you had a warranty applying in
relation to removal of waste from a
building at regular intervals, non-
compliance could have affected any
claim, whether the breach is relevant
or not.
“These conditions are now being
replaced with conditions precedent.
While charities need to ensure that
any such conditions on their policies
are complied with, the insurer can
only apply them if the breach of the
condition is relevant to the loss. For
example, if the policy specifies that
sprinklers must be installed and
operational and the charity fails to
do this, it may affect any claim for
fire. However, lack of sprinklers
could not be used to invalidate a
claim for theft or flood.”
Insurers are also now no longer
allowed to use ‘basis of contract’
clauses, as these were regarded as
turning information provided by
policyholders into warranties.
“The Act has been brought in to
make policy wordings fairer and
clearer – not to catch customers
out,” insists Britton. “It is designed
to help customers understand the
information they need to provide
when purchasing insurance. An
insurer should be asking more
specific questions to ensure that the
Insurance
Law

correct information is presented by
the insured.”
Insurers specialising in providing
cover to charities and voluntary
organisations argue this is why
sector-specific knowledge is crucial.
“Charities are incredibly diverse,”
says Mark Ingram, director and not
for profit/social enterprise general
insurance and risk management
specialist at CaSE Insurance. “It’s
about understanding that risk.”
Britton agrees. “Charities are
complex and varied organisations
and some general insurers may have
been treating them like small
businesses and applying a standard
policy and conditions,” he suggests.
“Specialist insurers have deep
knowledge and experience of the
risks associated with insuring
charities. Some providers may
decide that they don’t have enough
knowledge about the sector to ask
the right questions and may adjust
their risk appetite to reflect this.”
Implementation
Amy Brettell, head of the charity
segment at Zurich Insurance, says
Zurich is fully committed to all the
reforms outlined in the Act, but
will apply an ‘additional premium’
approach in cases where an
unintentional breach of fair
presentation reveals facts that
would have meant a higher premium
if known.
Under the Act, the insurer has the
right to reduce proportionately the
amount to be paid on any claim
against the premium that would have
been charged. “Zurich has opted out
of this right and is taking a different
approach which we believe will be a
real benefit to all our customers
including charitable bodies,” says
Brettell. “We have instead decided to
charge the additional premium that
we would have charged if we had
known the relevant material facts
and to pay any claims in full. This
should give our charity customers
real confidence that claims will be
paid in full.
“Zurich recognises that for many
voluntary sector organisations, the
individual responsible for arranging
insurance may do this as an adjunct
to their day job ... [and that] charities
can be disparate entities. These
factors can make collating
information challenging.”
Cost
Ingram does not expect the Act to
have any direct impact on the cost of
insurance for organisations in this
sector, or in the level of cover
available. However, he continues, it
is impossible to be sure of the effects
of new legislation until it has been
tested in court.
Britton thinks prices could be
affected once the Act begins to
impact settlement of claims, but that
this “is likely to be as a result of
insurers having a more detailed
understanding of the risks associated
with insuring charities. If you are
dealing with a specialist insurer, they
will already be pricing based on
their knowledge and experience of
the sector.”
Whatever happens, says Brettell,
the sector will continue to be served
by a competitive insurance market.
“The key aspect to remember is to
be as transparent as possible when
arranging insurances,” she says.
So although the new legislation
will help, there is still plenty that
charities and voluntary organisations
can do to ensure that the right
insurance cover protects the
organisation properly. Find the right
insurer, find out the facts, get the
right cover in place and don’t try to
hide anything that could invalidate
or reduce the value of a claim. And
– even if the insurer is as reputable
as they come – always read the
small print. ■
Insurance
Law
“The ACT hAs been
bRoughT In To mAke
polICy WoRdIngs
fAIReR And CleAReR”

Craig Inches: Government bond
markets have experienced a huge
deterioration in yields in the last
year due to a combination of low
inflation, quantitative easing, weaker
global growth and now Brexit.
Richard Nelson: As rates tumble,
bonds are increasingly susceptible to
interest rate risk. The duration risk
on 10-year gilts is now over 8
years*, meaning investors
purchasing 10-year gilts could see
harsh losses if yields reverse
direction. This is increasing demand
for shorter duration assets, which are
more insulated from yield increases
CI: The problem for investors
holding shorter duration assets is the
very low yield they pay.
Traditionally, investors could protect
against this duration risk and still
make an attractive return by holding
cash. However, with UK base rates
at record lows, cash deposit returns
are minimal, while tighter banking
regulations have forced many
lenders who provided competitive
rates out of the sector, while credit
ratings cuts mean that many no
longer qualify for inclusion in
institutional investment products.
With government bonds facing a
threat from duration, and fewer
options for cash solutions, achieving
an attractive return above Libor has
become increasingly difficult for
institutions with large amounts of
cash. The Royal London Enhanced
Cash Plus Fund aims to help with
this problem. This is one of three
options alongside our Short Term
Money Market Fund and our Cash
Plus Fund, and is designed for
investors who will be holding cash
for more than a year.
RN: Our fund uses RLAM’s
existing cash philosophy by being
straightforward, transparent and
highly liquid. The majority of the
fund is invested in a combination of
covered bonds, corporate bonds and
asset-backed securities. This
approach helps us achieve a yield
comparable to 10-year gilts without
taking on duration risk. Indeed, our
duration is just 0.6 years
currently***. There is also a 25%
position to cash and cash
instruments. Diversification is
central to our approach, with more
than 100 different issuers within the
portfolio, compared with the small
number of lenders in the cash
solutions market. Protection is also
paramount. Harnessing our
experience in covered bonds and
asset-backed securities, almost 50%
of the fund’s assets have some form
of asset backing, with strong
covenants underpinning the
securities***. This is not about
achieving return by buying risky
bonds – indeed over 60% of the fund
is AA-rated or better in terms of
credit quality***. Our safety first
approach has been recognised by
Fitch, with the fund awarded an AA
rating and a low volatility score***.
CI: The fund also benefits from
our ability to actively manage the
portfolio and target the most
attractive opportunities. Using our
bottom-up investment approach, we
have been able to take advantage of
several market moves so far this
year. For example, we increased our
credit exposure in February after
global growth concerns weakened
risk assets. This allowed us to
lock-in yields above 10-year (and
even 30-year) gilts for instruments
which, at the time, were only 9
months long. We will continue to
look for opportunities in markets
with our goal to deliver an attractive
yield versus cash and short-duration
bonds at the heart of the process. It
has become tougher for institutions
to find attractive ‘safe havens’, but
by utilising a flexible mandate which
can hold not just cash or gilts, but
also deposits, floating rate notes and
other debt market securities, it can
be achieved. ■
Asset
Management
Seeking bond-like
returns for cash
The managers of Royal
London Asset Management’s
Enhanced Cash Plus Fund
review the portfolio’s first year
WRITTEN BY CRAIG INCHES
AND RICHARD NELSON
i n v e s t m e n t
In association with
*Source: Thomson Reuters 16 June 2016. **Source: FT June 2016. ***Source: RLAM as at 31.05.2016. For professional clients only. Past
performance is not a guide to future performance. The value of investments and the income from them is not guaranteed and may go
down as well as up and investors may not get back the amount originally invested. Derivatives may alter the economic exposure of a fund
over time, causing it to deviate from the performance of the broader market. For more information concerning the risks of investing, please
refer to the Prospectus and Key Investor Information Document (KIID). Our Ref: 867-PRO-06/2016-JW.

charitytimesSeptember_2016[1]

Recomendados

Recomendados

Más contenido relacionado

Destacado

Destacado (20)

Similar a charitytimesSeptember_2016[1]

Similar a charitytimesSeptember_2016[1] (20)

charitytimesSeptember_2016[1]