The Informed Trustee – one year on

Julie HutchisonIt’s difficult to believe that it’s been a whole year since the launch of The Informed Trustee, STEP’s innovative course designed to equip current and aspiring trustees with the knowledge needed to be successful charity board members, reflects editor in chief Julie Hutchison TEP.

As we hoped at the outset, the course has supported a greater proportion of women and younger people to take on a trustee role. Our figures* show that 59 per cent of The Informed Trustee intake are women, and the students over the last year had an average age of 49-50. Both of these figures show a significant difference to those in the 2017 Taken on Trust report, published by the Charity Commission and others, which records trustees as 64 per cent male, with an average age of 60-62. This shows the course is supporting positive change in charity boardrooms. As well as individual registrations, a number of charities seeking to support groups of trustees have made enquiries for block bookings . One year on, and almost 100 students later, it’s good to see this happening.

The move to greater inclusivity is significant. Board diversity is not just a box-ticking exercise. The goal is to improve the nature and quality of charity board decision-making. A diverse board is better able to minimise ‘group think,’ and a range of voices is more likely to challenge established norms.

Another factor that marks out the course from others is the multi-jurisdiction choice. This is not just a course for those from one part of the United Kingdom. We have a writing team of 17 charity specialists from Scotland, Northern Ireland, England and Wales, so that charity trustees, and those aspiring to be trustees, can find relevant course content wherever they’re based. It also reflects the cross-border reality of life in the UK, something I personally experience as a Scot who is on the finance committee of a charity in the north of England. Students can choose content based on their chosen jurisdiction; or view all for a complete picture across the jurisdictions if they prefer. The multiple-choice test at the end only shows questions from the jurisdiction selected.

With chapters covering communications and data, and a personal development pathway for trustees, the course offers a modern take on information needed by trustees in the 21st century, as well as core components on trustee responsibilities, accounts, risk management and fundraising rules, among others.

The decision to run the course online is also very significant. Students are free to dip in and out, or view course content on different devices, within the 12 month access period.

We have received some positive feedback from students. One wrote:

‘I feel it’s a valuable course for new trustees to gain knowledge, and for more experienced trustees as a refresh to ensure they are up-to-date. I would also say it is helpful for charity CEOs to access the course, so they too have an understanding of charity governance.’

Menai Owen-Jones, Trustee of ACEVO and CEO of The Pituitary Foundation.

On a personal note, launching The Informed Trustee has marked the moment in my working life when I moved from five to four days with Aberdeen Standard Capital, whose flexibility has been an enormous help as I created time for my ‘Friday life’ with The Informed Trustee and other projects. I’d also like to thank the writers from the various firms involved, for their support in creating the course content: BDO, Brodies, Chiene & Tait, Crowe, Edwards & Co, Finegan Gibson, Geldards, Hewitsons, Lindsays, Mills & Reeve, Moore Stephens, Shepherd + Wedderburn, Turcan Connell and Wrigleys.

Looking ahead, the course content is about to go through its 2019 refresh and update.  Public expectations of charities remain high; those trustees with The Informed Trustee under their belt will be better prepared for what lies ahead.

*Statistics taken from 88 per cent of students in year one of the course, who made a disclosure.

Julie Hutchison TEP is Founding Editor, The Informed Trustee

The Informed Trustee: three months on

Julie HutchisonIt’s now three months since the launch of The Informed Trustee, STEP’s online course for charity trustees in England and Wales, Scotland and Northern Ireland. With Trustees’ Week being marked across the UK, it seems like a good moment to reflect on the story so far.

The Informed Trustee course was created as a practical response to two areas of concern. A series of reported events in charities brought the judgement and/or knowledge of charity trustees into question. The lack of diversity on charity boards also became evident. While the average age of a charity trustee is 61, figures show that 8,000 boards in England and Wales had an average age as high as 75. There’s also a gender imbalance of 64:36, with male trustees predominating.

Why online?

We chose an online training programme to remove a number of barriers limiting participation. Individuals anywhere can access course content, on whatever device is convenient for them, at whatever time of day. As the course is on-demand, attendees can dip in and out, approaching the course modules in whatever order they wish, over a 12-month period. We’re confident that this will broaden participation in trusteeship, by enabling trustees to fit their study around work and family commitments.

UK-wide

To ensure a truly UK-wide course, we sourced expert practitioners in charity law and finance from Scotland, Wales, Northern Ireland and England, to ensure both quality and equality of provision for candidates across the jurisdictions.

We’re delighted to see that over 50 individuals are taking the online course, and that 64 per cent are women, a reversal of the usual figures in England and Wales as detailed in the 2017 Taken on Trust report (PDF). In addition, several candidates are in their 30s.

We’ve also seen group enquiries from charities that are considering The Informed Trustee course for their whole board, or for new trustees as part of their induction. I look forward seeing how take-up continues to expand over its first year, contributing to the development of charity trustees, which in turn will support charities in continuing to deliver confidently for their beneficiaries.

Julie Hutchison TEP, Founding Editor, The Informed Trustee

The Gift Aid tax gap

Emily Deane TEPSTEP is working with HMRC on a Gift Aid working group set up to explore options to maximise the amount of Gift Aid that charities can claim on donations, together with ways of increasing customer understanding of the system and how it works. HMRC is also investigating opportunities to improve the way that Higher Rate Relief is claimed; and whether it works as intended, is future-proof and provides the relief in the best way possible.

HMRC began the process by instructing an external research company to look into charitable giving and the use of Gift Aid. Its specific objectives were to estimate the value of the Gift Aid tax gap and unclaimed Gift Aid, and develop an understanding of correct and incorrect behaviours among donors.

The report has found that 25 per cent of the value of donations made in the 12 months prior to interview did not have Gift Aid added to them where the donor was eligible, contributing up to GBP560 million to the value of unclaimed Gift Aid. This represents potential missed income for charities and is generated by eligible donors who only sometimes (30 per cent), or never (18 per cent), add Gift Aid to their donations. It is mostly driven by a lack of opportunity for donors to add Gift Aid, and to a lesser degree, by failing to understand what Gift Aid is, or where they are eligible to add it.

The report also finds that 8 per cent of the value of donations had Gift Aid incorrectly added to them by ineligible donors, generating a Gift Aid tax gap of up to GBP180 million. This is caused by ineligible donors who always (5 per cent) or sometimes (10 per cent) add Gift Aid, partly where they do not understand the relief, and partly where they misunderstand what it means to be a taxpayer. This has resulted in donors who are not taxpayers attempting to add Gift Aid, where they are not eligible to do so.

Better understanding of these issues would lead to a drop in Gift Aid claims among ineligible donors, and a rise in claims among eligible donors. It was recommended to provide information about (1) Gift Aid eligibility criteria (ie clarifying what it means to be a UK taxpayer, and that the donor must be one to add Gift Aid to their donation) at every opportunity, and (2) the benefits of Gift Aid at the point of donation; to help effect the change.

The report, Charitable giving and Gift Aid research, is published today, accompanied by a press release issued by HM Treasury and HMRC.

If you have any questions or suggestions please email STEP’s Technical Counsel – Emily.Deane@step.org.

Emily Deane TEP is STEP Technical Counsel

The UK Budget and donor benefit rules for charities

Emily Deane TEPThree years ago, the UK government’s Autumn Statement 2014 announced a review of the Gift Aid donor benefit rules with the intention of simplifying them. Following a call for evidence, it launched a consultation on 18 February 2016 setting out a range of options.

The responses helped develop specific proposals for reform, which were set out in a second consultation that ended on 3 February 2017. We have been informed that a summary of responses to the second consultation will be published on 1 December 2017.

This week the government announced that it would replace the current three-tier thresholds with two tiers. Under this reform, donors will be no worse off in terms of the value of benefits that charities can offer them, as the new limits will be, for every eligible donation, at least as generous as the current limit.

Current system

The current donor benefit limits (the relevant value test) is a set of monetary thresholds that determines the value of benefits that charities may give to donors as a consequence of a donation and still claim Gift Aid on that donation. These are:

• For donations up to £100, the value of the benefit can equate to a total of 25% of the donation.
• For donations between £100 and £1,000, the value of benefits is capped at £25.
• For donations over £1,000, the value of the benefit can equate to a total of 5% of the donation, up to a maximum annual benefit value of £2,500.

New system to be introduced

Under the new limits, the benefit threshold for the first £100 of the donation will remain at 25% of the amount of the donation. For larger donations, charities can offer an additional benefit to donors, up to 5% of the amount of the donation that exceeds £100. Some examples are provided in the table below. The total value of the benefit that a donor can receive remains at £2,500.

Extra statutory concessions

The government also announced that it will bring into legislation the four extra statutory concessions that currently operate in relation to the donor benefit rules.

Time-frame

Legislation to make all the changes will be introduced in Finance Bill 2018-2019 and will come into effect from 6 April 2019. Draft legislation will be published in 2018.

Examples of how the new benefit thresholds will work:

Size of donation (£) Existing relevant value test  – size of donation
determines level of benefit (£)
Planned relevant value test from April 2019 (£)
70 17.50 17.50
100 25 25
400 25 40 (25% of 100 (25) plus 5% of 400-100(15))
1,000 25 70 (25% of 100 (25) plus 5% of 1,000-100(45))
1,500 75 95 (25% of 100 (25) plus 5% of 1,500-100 (70))

STEP will continue to liaise with HMRC’s Charities Tax Team in this connection.

Emily Deane TEP is STEP Technical Counsel