Scotland's Redress Scheme: scheme contributor information

18. Considerations for Charities

120. Where the potential contributing body is a charity registered with the Scottish Charity Regulator it is important to note that its charity trustees are still required to comply with the charity trustee duties as set out in the Charities and Trustee Investment (Scotland) Act 2005

121. Similarly, where the potential contributing organisation is a charity registered with the Charity Commission for England and Wales, the trustees of the charity still need to comply with the general trustee duties when making a decision about whether to contribute to the Scheme or not. The Charity Commission for England and Wales has further guidance available which may be of assistance.

122. In particular charity trustees must be able to demonstrate that they have acted in the best interests of the charity and with due care and diligence in deciding whether to contribute to the Scheme. Trustees are also under a duty to manage their charity’s resources responsibly. This includes taking advice where they need to, and avoiding exposing the charity’s assets, beneficiaries or reputation to undue risk. Trustees must make balanced and adequately informed decisions, thinking about the long term as well as the short term.

123. In coming to the decision charity trustees should take into account:

• What is the charity’s current and long-term financial situation?
  • Have you considered any limitations, contractual or otherwise on how the charity’s funds may be spent? (e.g. are any of the funds restricted^[3]?)
  • Are the available unrestricted^[4] funds sufficient to allow you to make a contribution?
  • If you decide to make a contribution to the scheme by instalment payments over a number of years, have you assessed whether these payments would be achievable now and in future years?

• How would your charity’s current and future beneficiaries and services be affected if you made a contribution?
  • How will the contribution impact on the charity’s cashflow; will the charity still be able to manage this effectively?
  • Would it still be possible to pay staff and other costs?
  • Would there need to be cuts to services now or in the future?
  • Would the contributions impact on any agreements with funders or lenders?
• What are the reputational implications for the charity if it does (or does not) contribute?

124. Charity trustees will have to consider the advantages and disadvantages of participating in the Scheme, taking appropriate professional advice where necessary. They will then be in a position to decide whether it is in the charity’s best interests to contribute to the Scheme. This decision should be documented and detail the charity trustees considerations.

125. If charity trustees, acting with care and due diligence, decide that it is int eh interests of their charity to contribute to the Scheme, section 17 of the Act provides that any contributions made to the scheme from charitable funds will be treated in the manner as describe at paragraphs 67 (for those registered in Scotland) and 71 (for those registered in England and Wales above.