The Charity Commission has updated its guidance on AGMs during Covid-19 and is continuing to allow late delivery of annual reports
The guidance states that if charities are unable to hold virtual meetings or socially distanced face-to-face meetings then the commission understands that AGMs and other important meetings may have to be cancelled or postponed.
The Charity Commission states that if the decision to postpone or cancel has to be made then the charity must record the reasons for the decision to maintain and demonstrate ‘good governance’.
The Commission states that charities taking this decision must check their charities’ governing documents which would say whether virtual meetings are allowed. This is important as the Corporate Insolvency and Governance Act 2020, which permitted charitable companies and Charitable Incorporated Organisations (CIOs) to hold AGMs and other members’ meetings online regardless of their governing documents, ended on 30 March 2021.
The Commission references that the decision to cancel AGMs and other important meetings may lead to difficulty in finalising end of year documents such as annual reports and accounts. In 2020, the Commission allowed annual reports to be delivered late, although they urge that the completion of the documents should aim to be delivered on time, their stance of late reporting is still being honoured in April 2021.
Paul Latham, Director of Communications and Policy at the Charity Commission, said: ‘It is clear that charities, and voluntary action more widely, have been a key component of the nation’s response to the crisis. It’s also clear that charities’ work and finances have been heavily impacted by this pandemic.’
‘Over the past year, our focus has remained constant: to protect the public interest by supporting charities to navigate the challenges brought about by the pandemic, giving them the tools, advice and guidance they need to operate effectively and respond in these difficult times. We have also continued to take robust action where wrongdoing has occurred. We will continue this approach in the period ahead, helping charities to operate effectively and to ensure there can be public trust and confidence in the way they go about their work.’
The voluntary sector has been hit hard with the impact of Covid-19. This is highlighted in the March 2021 report, Respond, Recover, Reset: The Voluntary Sector and Covid-19 project, prepared by Nottingham Trent University, the National Council for Voluntary Organisations NCVO and Sheffield Hallam University.
In the survey of 590 organisations 47% reported a fall in income since March 2020 and 33% reported a deterioration of finances in the last month, 30% expect their finances to fall further in the next month. Further declines were projected for service delivery contracts -7%, public donations -8%, investments -10%, other income sources -13% and trading activity -17%.
Overall grants income is expected to decline only slightly, average percentage change of -3%, despite concerns of voluntary organisations approaching a financial cliff edge as emergency grants expire at the end of this year.
Alex Farrow, head of networks and influencing at NCVO, said: ‘The voluntary sector is huge, complex and diverse. This report outlines that covid-19’s impact has been, and will continue to be, uneven and unpredictable across a sector already facing higher demands on its services.
While many organisations have been able to build up reserves, half of organisations are using them to cover day to day costs. The expected downturn in income - even for those organisations seeing only marginal declines - is worrying not just for the charities and groups involved, but for the lives and communities that they serve.’