January is typically a time for reflection and resolutions, with many considering the year gone by and looking to the year ahead.
This blog, the first in a series from our charities team, brings you some of our reflections on the year gone by, along with some of our suggestions for possible resolutions for Scottish charities for 2024. The series will explore themes and issues we think charities should have on their radar, each of which will be discussed further at our charities conference taking place on Thursday 7th March in our Edinburgh office. We hope the blog series is useful food for thought, and that you can make it along to the conference. Keep an eye out for our upcoming invitation, which will be shared in the next blog post.
Charities (Regulation and Administration) (Scotland) Act 2023
2023 was an important year for Scottish charity law, with long awaited updates to the Charities and Trustee Investment (Scotland) Act 2005 (the “2005 Act”). The updates include changes to the information publicly available about a charity, an extension to the powers of the Office of the Scottish Charity Regulator (OSCR) in certain situations, and an update to the criteria that would make an individual ineligible to become a charity trustee. Although the new legislation, Charities (Regulation and Administration) (Scotland) Act 2023 (the “2023 Act”), was passed last year, the 2023 Act has largely not come into force. It is anticipated that the changes will be phased in over a period of two years, with ‘simpler’ changes taking effect in spring 2024. In light of this, we recommend that now is the perfect time for charity trustees and senior management teams to familiarise themselves with the new legislation to ensure continued compliance and a seamless transition when the changes are brought in.
Review of governing documents
We would always suggest taking the time to regularly review your organisation’s governing documents. Reflecting on the last year, were there any difficulties caused by the contents of your governing documents? For example, is your constitution still reflective of the most appropriate structure for your organisation? Are there any procedures which have evolved but which have not been taken into account within your constitution? Would your board composition benefit from a refresh? Over and above your constitution, it’s important to take stock of your full suite of governance documents to ensure that all relevant processes and procedures have been covered. In 2023 we saw many clients expanding or varying their services, and consequently it is important to take the time to ensure that your governance documents are current and fit for the organisation’s present purpose and remit.
New ways of working
The impact of the cost-of-living crisis has been well documented in all parts of society, and 2023 saw challenges for many. Charities certainly were no exception to the impact of the crisis, and we found ourselves regularly being called upon to advise charities who were faced with difficult decisions. Taking the last year as an indicator of what is to come, we believe that the theme of resilience in the charities sector will continue and that charities will need to continue to adapt and develop new ways of working. This may be through collaboration with other charities (whether by way of formal merger or on a more informal basis) or maybe through diversification of income streams by trading or setting up group structure arrangements.
Cyber ready
Unfortunately, a theme of 2023 was the rise of the cyber attack. As cyber criminals become more knowledgeable and sophisticated, it is harder and harder to spot the signs of something “phishy”. An attack could have varying consequences depending on your organisation’s remit – it could be the loss of access to technical equipment, financial loss, or regulatory involvement (depending on the nature of data which you hold). We are certain that cyber attacks will continue in 2024 and we recommend taking steps to consider the risks and prepare an action plan for the eventuality that your organisation might be impacted.
Written by
Emma Manson
Senior Solicitor
Third Sector & Charity
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