Our 2019 Guide: Conflict as a catalyst for change within your charity
Thursday, 31 January 2019
Welcome to 2019 and our new publication, ‘Using conflict as a catalyst for change: a guide for embracing, managing and mitigating conflict within your charity’.
We think it’s an excellent document, and I hope you find it a useful tool to benchmark current practice and identify actions.
It’s essential to understand that conflicts affect all charities, large or small, simple or complex. Trustees have a legal duty to act in their charity’s best interests; they’re expected to understand what conflict is, how it affects their organisation and to deal with any issue appropriately.
Each month we’re focusing on a different area of potential conflict. This month we look at conflict with your trading subsidiary.
Conflict with your trading subsidiary
Trading subsidiaries are usually established to protect the charity from risk, and/or to generate income for the charity from activities outside of the charity’s purpose.
A charity trustee’s main consideration should always be: ‘What’s in the best interests of the charity?’ This may create conflict because the best interests of a charity are not always the same as those of its trading subsidiary.
The document explores the relationship, looking at areas such as governance, funding and resource sharing, and what to consider when a trading subsidiary is in financial difficulty. A good understanding of the possible conflicts that may arise, and how to approach these from the outset is the best way of making sure trustees meet their responsibilities, and both organisations benefit from a positive relationship.
You may also be aware that, back in February 2018, the Charity Commission consulted on new guidance on the relationship between charities and non-charitable organisations, focusing on maintaining the charity’s separation and independence. The draft guidance received quite a bit of criticism, including that, in parts, it was impractical to implement for charities with trading subsidiaries. It was expected that final guidance would be published later in 2018. That didn’t happen, and we understand that the Charity Commission is still reflecting and the publication date is unknown. When this document is finally published, all charities will need to consider it.
Read the full publication now: Using conflict as a catalyst for change
Next month we’ll be focusing on conflicting roles.
If you have any questions or if you’d like to discuss this with us in more detail, please speak to your usual MHA Larking Gowen contact or call 0330 024 0888 or email firstname.lastname@example.org