As the voice of our sector, we regularly respond to government consultations and liaises with influential audiences. Most recently, we have made our position very clear to the Charity Commission with regards to their review of charities who partner with non-charitable organisations.
In draft guidance, published earlier this year, the Charity Commission published draft guidance to cover any such relationships, with the aim to “help trustees understand the risks and challenges that such relationships can bring and by setting out what we expect trustees to do to deal with them.”
Unfortunately, this guidance categorises charity shops who run some of the operation through a trading subsidiary as one such example of a close relationship.
We believe that a charity running some trading operations through a wholly owned subsidiary, is simply not in the same category as other commercial relationships. The subsidiary is completely owned by the charity and has no other business except to raise as much money as possible for its parent charity. It therefore will inevitably embody the principles and cause of this parent charity.
We have therefore responded to the Charity Commission with a recommendation that: “the draft guidance is amended to make it clear that it does not apply to wholly-owned trading subsidiaries operating in the charity retail sector”.
Robin Osterley, Chief Executive of the Charity Retail Association, said: “Charity shoppers, donors and volunteers who are keen to contribute to a cause close to their heart, are completely uninterested in the particular model adopted. As long as every penny of profit generated goes to the cause displayed above the door these people can know they have made an important contribution. This reassurance is clearly delivered by the trading subsidiary model. Therefore, the draft guidance is inappropriate for the trading subsidiary model.”