On 1 October 2024, we had the pleasure of hosting an event on the topic of Navigating the future: Charity regulator reflections and insights with Aarti Thakor.
Chris Willis Pickup, Head of Mishcon de Reya’s Charities and Social Ventures practice, hosted a conversation with Aarti Thakor, the former Director of Legal and Accountancy Services at the Charity Commission and, since June 2024, a Partner in the Mishcon team.
The aim of the discussion was for Aarti and Chris to share and reflect on their experiences in the Charity Commission, to provide an insightful view of the regulatory landscape, and to equip attendees with a deeper understanding of the complexities and responsibilities inherent in the charity sector in the UK and further afield.
This is the first of a series of events from the Mishcon Charities and Social Ventures team, to convene charities, trustees and philanthropists to explore the charity regulatory landscape in the UK and internationally. Please contact one of the team if you would like to be invited to future events.
Below is a summary of highlights from the discussion:
- History and evolution of the Charity Commission
Aarti and Chris discussed the history of the Charity Commission, commenting on its evolution over time from its initial purpose of registering charities to the increasing investigations and litigation, with the introduction of the Charity Tribunal in 2009. The introduction of the tribunal prompted Aarti's move to the Commission in 2008, where she initially focussed on advocacy work. Chris and Aarti spoke positively on their roles and time at the Commission, where Chris worked as Head of Litigation while Aarti took on multiple roles, from Head of Legal Compliance to Director of Legal and Accountancy Services.
Aarti commented that following 9/11 and an increase in international financial transactions in the charity sector, the Commission had to shift towards compliance and investigations, developing further policies and frameworks for investigations, and a robust model on assessing risk.
The new focus on a principles and risk-based regulatory approach in part prompted the introduction of the 2016 Charities Act, in which Aarti was heavily involved. The Act marked a move towards regulating more diverse and difficult to quantify areas of charity operations, such as behaviours, standards, data, safeguarding and counterterrorism.
- Challenges at the Charity Commission
As with any organisation, the Charity Commission faces a variety of challenges. Aarti spoke of some of these, including:
- regulating and catering to a large and diverse sector, most of which have no access to legal expertise;
- the increasing volume of work and resourcing; statutory investigations rose from just 8 in 2008, to almost 300 in 2018, and 120,000 enquiries were received last year alone;
- political pressures: despite the Commission being accountable to parliament directly, the uniqueness of the charity regulated space can be difficult for some to understand and there is a burden on the Commission to communicate its policies and work to Ministers and (other) civil servants; and
- the increasing range and complexity of the statutory duties the Commission must consider before making certain decisions.
- Looking Forward
Aarti noted the arrival of the Charity Commission's new CEO, David Holdsworth, with whom she and Chris had worked during his earlier role as the Commission's Deputy CEO. Aarti anticipated that David's leadership will drive a renewed focus on operational rigour. Aarti and Chris provided some broad advice to charities, specifically:
- being mindful of appropriate use of a charity's resources, especially where it concerns broader matters not directly related to a charity's work;
- being proactive in identifying, mitigating and addressing disputes and complaints;
- reviewing any regulatory advice or commentary circulated by the Commission and considering whether this should prompt a review or change to operation, which can be found on their website, LinkedIn and email updates; and
- ensuring the operational framework, including trustee responsibility, reporting lines and decision making is clear and fully understood to mitigate the otherwise significant liability issues.
- Balancing responsibilities
Aarti noted that a charity's reputation can be impacted in a number of different ways and that the privileges charities are awarded, for example in relation to tax, come with certain responsibilities. It is important not to take these privileges for granted.
The event concluded with remarks from both Chris and Aarti, encouraging charities to be more proactive in problem solving, sharing networks and combining experience to make more change in the world. Convening groups like this where key practical issues can be discussed are important, and the Mishcon Charities and Social Ventures team plan to run these more often in order to generate progressive conversations and changes within the sector.
If you have any questions, please reach out to one of the team.