About the CFDG
Current Issues
The Government plan of support for the Third Sector
The Government has announced that it will be providing a further package of support for charites in the new year. The Office of the Third Sector have now asked for comments and suggestions on what that support should include, and you can find CFDG's proposals for the action plan below.
Office of the Third Sector
Summary of the sector conference on the economic crisis
Pre-budget Report
The Chancellor presented the pre-budget report on Monday 24th November. The major announcement was the temporoary reduction of the standard rate of VAT to 15%. This comes into force on 1st December 2008, and runs until 31st December 2009. You can find below a guide from HMRC on preparing for the change in the VAT standard rate, and a briefing on the PBR for charities from CFDG.
CFDG, Briefing on the PBR
HMRC, VAT - a change in the standard rate
Saffery Champness, VAT briefing
Chantrey Vellacott DFK briefing on the VAT fall
Icelandic banking crisis
Statement on the current situation
3rd November
Over the last four weeks CFDG in collaboration with other sector bodies has been campaigning for charities to get full compensation for their losses in the Icelandic banking crisis. Research by CFDG, NCVO, Acevo, the Charities Aid Foundation and the Charity Commission has revealed that 48 charities are affected and they have lost £86.6m. However, there still may be more charities that have not come forward and we would urge those charities to do so we can understand the full loss to the sector. We believe from the KSF website that it may be as much as to £230m (the KSF indicated on 30th June 2008 that they had 99 charity clients investing £230 million - but we cannot be sure these are all british charities.)
We are currently in discussions with the government to set up a loan gurantee scheme that would be provided on an interest free basis until charities could recover their lost funds from the administrators. We will continue to lobby on your behalf on this issue and will keep you informed of any progress.
Further information:
Letter to the Chancellor
Call for members to contact CFDG if they are exposed to the Icelandic bank freeze
Joint statement from the Office of the Third Sector and sector leaders on the Icelandic banking crisis
Latest new story: Charities lost up to £200m in Icelandic banks
Pyramid selling schemes
CFDG has become aware of a spate of pyramid selling schemes in the South West and Wales from which part of the funds generated are donated to charities. The schemes work in something close to the following way: Each entrant pays a fee of £3,000 and recruits 2 other members. These two repeat the exercise and so on until a total of £24,000 has been raised (the “game” continues for all but the first member). The original entrant then claims their prize of £23,000 at a ceremony where they have to answer 3 questions, £600 goes to their nominated charity, £300 is used for miscellaneous prizes at the ceremony and £100 is for the buffet. Presumably the organiser also gets a return as well.
These schemes ultimately always fail leaving a number of participants out of pocket. They are also possibly in contravention of the gaming act and the charities act. Whilst it is perfectly reasonable to accept the donation, charities should be aware of the reputational risk to the charity, and of course to the sector, should the scheme become public.
The Charity Commission has provided us with the following advice:
'Charity trustees have a duty to act in the best interests of their charities. This will include on occasions refusing or returning a donation which has come from a source that could create reputational risk for the charity if it was accepted. Recently some charities have been offered or received donations from pyramid gifting schemes, schemes that the Office of Fair Trading describes as offering "false promises about quick and easy money". Such schemes always collapse leaving many members out of pocket and creating ill will towards those that have benefited. Trustees may consider that the negative publicity that will be associated with such a scheme would damage their charity and so refuse or return any donation from such a source.
In very extreme or complex cases, where trustees consider that their decision to refuse or return a donation may be challenged as not being in the interests of the charity, they can ask the Charity Commission for advice.'
Please be on the lookout for donations of this type and consider seriously whether you should accept them or return them to the donor. Also please advise the Charity Commission and give them as much detail as you can should you receive such a donation - you can do this by calling 0845 3000 218 or emailing enquiries@charitycommission.gsi.gov.uk