As published in Horse Scene Magazine, January 2015
Equine welfare charities and organisations play a vital role in providing rescue and rehoming facilities for horses and ponies. A recent inquiry report produced by the Charity Commission regarding the conduct of a particular equine welfare charity has highlighted the importance of trustees’ duties and responsibilities and a charity’s obligations.
This article considers the current implications for equine charities and their trustees.
The current horse crisis
In 2012 and 2013, the major equine welfare organisations released two reports detailing the challenges they faced and highlighted recommendations to help mitigate the number of horses at risk in England and Wales.
A number of factors have contributed to this crisis. One is overbreeding, where the equine market has become saturated due to dealers still buying, breeding and importing horses and ponies thereby driving down the market price of these animals to as little at £5.
Contrary to this, the rising cost of food, veterinary bills and livery, including severe bouts of poor weather, has led to owners being unable to look after their horse. As a result, the welfare of these horses is being put at risk because their owners cannot afford to provide proper care for them and horses are even being illegally fly grazed on public and private land. This has become a significant problem for landowners, farmers and local authorities and even the public, meaning that a substantial number of horses are left to fend for themselves, which has caused increased welfare problems with the equine industry.
Over the past few months, the news has shown disturbing trends of neglect affecting equines more than any other animal. It is, therefore, no wonder that equine welfare charities are experiencing an enormous strain on their resources with so many horses and ponies being abandoned and requiring help. Space at these welfare charities is limited though and donations are crucial to increase the availability of an organisation’s resources.
Charities’ obligations and trustees’ responsibilities
When experiencing a strain on resources, a charity’s efforts are often solely focused on achieving its charitable purposes for the public benefit and fundraising.
However, all registered charities have obligations to the regulator, the Charity Commission, to which they must adhere. For example, all registered charities are required by law to provide annual returns and accounts to the Charity Commission and to keep their information on the public register up to date. These requirements apply to all registered charities whose gross income exceeds £25,000 per year.
Trustees of charities are responsible for ensuring their charity adheres to such obligations. A trustee’s duties and responsibilities include, but are not limited to, the following:
- To act in the best interests of the charity.
- To act reasonably and responsibly in all matters relating to their charity.
- Only to use their charity’s income and property for purposes set out in the charity’s governing document.
- To make decisions in line with good practice and the rules set by the charity’s governing document.
In particular, trustees are required to keep adequate records about the finances of the charity and put robust financial management and conflicts of interest processes in place as well as comply with their legal requirements to prepare and, where appropriate, file annual accounts with the Commission.
However, such responsibilities can be neglected by trustees, particularly if the charity is experiencing a strain on resources and/or the charity does not have enough assistance in order to meet such responsibilities adequately.
In September 2014, the Charity Commission published its inquiry report in relation to the conduct of an equine welfare charity. The Charity Commission had engaged with the charity on a number of occasions in order to resolve concerns about possible unauthorised trustee benefits, how conflicts of interest were being managed between the trustees and the charity’s financial controls and record-keeping. The charity had also failed on several occasions to comply with their annual reporting obligations to the Commission.
These issues revealed mismanagement and misconduct in the administration of the charity and a breach of their legal duties. At the closure of the Commission’s inquiry, the charity had acted on the Commission’s findings and was up to date with its filing obligations. The Commission’s report highlights that the trustees took steps following its report to manage conflicts of interest more robustly.
Meeting all legal requirements and acting with good practice
However, even the appearance of a conflict of interest can damage the public’s trust and confidence in a charity, which could have a negative impact on financial support provided by the public and, thereby, the work that the charity carries out.
Although equine welfare charities are struggling with the strain that has been placed on them due to the horse crisis, it is still essential for such charities to ensure any conflicts of interest are actively managed and that they have appropriate policies and procedures in place to allow them to identify and manage them. Failure to do so could trigger an inquiry from the Charity Commission, which is likely have a detrimental effect on the reputation of the relevant charity.
Help for trustees
The role of a trustee can be daunting, particularly given the legal requirements to which a charity must adhere. Where trustees feel that they do not have sufficient expertise or knowledge in respect of their charity’s obligations or their own duties and responsibilities, it is recommended that they should consider seeking appropriate professional advice.
With a dedicated charity department, DWF can advise on all aspects of charity law and regulation, in particular, governance, constitutional issues and advising charity trustees on their duties and responsibilities.This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.