Helping you prosper
With Rishi Sunak launching the countdown to the General Election with a surprise announcement in the pouring rain outside No. 10 last week, many charities will be focusing on how they can use this period to best promote their causes.
This is of course an important – though not uncontentious – aspect of the work carried out by many in the charity and not-for-profit sector.
“Campaigning and political activity can be legitimate and valuable activities for charities to undertake”, asserts the Charity Commission in its guidance for charities. This was reiterated by Commission Chair, Orlando Fraser, in a Guardian interview last autumn where he stated that he would “robustly defend charities’ right to campaign lawfully, even where such campaigning covers sensitive or politically divisive ground.”
The issue of charities and their involvement in politics has of course been brought into focus by the numerous recent high-profile attacks made by politicians and sections of the media, and the accusations levelled at various charities (including the National Trust, RNLI, Care4Calais and Barnardo’s to name just a few) as having strayed too far from their charitable objects to promote a particular political or cultural agenda.
Orlando Fraser pre-empted the PM’s announcement, with a well-timed blog published on 20 May: Campaigning and political activity – what do charities need to consider ahead of a general election?
The blog above sets out the Commission’s position and reminding charities of their responsibilities with links to its detailed published guidance, including specific supplementary information for use by charities during an election period.
This blog is well worth a read and is particularly relevant for those involved in charities with a campaigning focus or who have social, environmental or economic objects which may cross over into politics.
In essence though, it again restates that charities are fully entitled to engage in politics - with a small ‘p’ - to the extent that it supports the delivery of its charitable purposes for the public benefit. A charity therefore may give support to the specific policies of a political party if these would help it to support its charitable purposes, or campaign for such policies to be adopted. However, it must remain independent, and not provide support or funding to a political party or politician. Trustees must protect the charity’s reputation and will need to consider the possible benefits of campaigning and political activity as an effective way of further the charity’s purposes, against the potential costs and risks.
Political activity and the year end audit
As auditors of charities, we are required to obtain reasonable assurance that the financial statements are free from material misstatement arising from non-compliance with laws and regulations (and related potential impact on going concern relating to non-compliance).
So, for charities that engage in significant campaigning and political activity, we would need to obtain an understanding of how the organisation and its Trustees ensure compliance with the Charity law and Commission guidance, and appropriately mitigate related risks. This is likely to include discussions with management and review of board minutes and the risk register.
The next step
If you would like to discuss the Charity Commission guidance on campaigning and political activity, or find out more about the services we offer for charities and NFPs, please contact Gareth Burrow on g.burrow@uhy-calvertsmith.com, or you usual UHY adviser.
