Below are some examples of the opportunities and challenges we respond to on behalf of institutions that advise or support wealth owners and their families.
A substantial charity established by a family held an interest in the family business. This led to potential risks and conflicts, as trustees need to act independently, and consider the need to diversify the charity’s investments.
We advised on conflicts of interest, and set up a procedure for them to take independent investment-advice on key commercial decisions, particularly those relating to the charity’s shareholding in the family business.
We advised a substantial university college on setting up an expendable endowment trust – one that must invest its capital to produce income.
The trust is governed by fellows of the college. The trust governance had to manage not only the grant-making process, but also the potential conflicts of interest for the fellows, given their dual role as employees of the college and trustees of the trust.
We see a surprisingly large number of Charity Commission queries about governance issues in family charities, particularly around conflicts of interest and private benefit. It’s worth having your house in order.Caroline Belam, Senior Associate - Private Client
We advised a large international corporate on how to structure its corporate and social responsibility (CSR) scheme.
We set up a scheme that included a charity of the year, sponsorship agreements with leading UK charities, and employee and volunteer fundraising. We also drafted a policy to deal with potential conflicts with client, or staff interests.
A leading fashion house’s corporate foundation wanted to set up a programme to help young people from disadvantaged backgrounds get jobs in creative industries.
We advised on charity-law and tax issues, and contracts with third parties who would help them achieve their aim.
The rules on fundraising by corporates are tricky. Not considering the issues carefully could mean charities end up paying tax unnecessarily.Simon Phelps, Partner - Private Client
A large charitable faith school was under investigation by the Charity Commission and Ofsted. The issue was potential conflicts-of-interest around how the charity ran the school, and managed the property the school used.
We advised on the investigation, then helped put in place new arm’s-length contracts and conflicts policies to manage future conflicts.
The Charity Commission has been given more powers and has sharper teeth. It is taking investigatory work more seriously.Tracey Neuman, Associate Director - Private Client
We advised the trustees of a charity that manages the largest single-site care home in the UK on their merger with another charity.
This was a complex project with significant regulatory issues: we completed it inside nine months. We advised on extensive due diligence and complex structuring that included the creation of a Community Benefit Society and a company limited by guarantee. The newly merged charity was more efficient and more effective.
Our client, the trustees of a prominent Jewish community centre, planned to merge with another well-respected Jewish cultural organisation.
We put together a team of specialist lawyers who dealt with every aspect of the merger from charity law and company law, to real estate and intellectual property issues. The merger has enabled the combined charity to have a far greater impact.
Mergers and collaborative working are extremely important to charities; they can help increase synergies, reduce costs and assist with fundraising.Simon Phelps, Partner - Private Client
Our client, a major UK grant maker sought our advice on several significant long-term project-funding grants. These included grants to London galleries to refurbish or upgrade some of their buildings, and grants to medical and charitable projects in Israel.
Each grant-making agreement made sure that the donated funds were protected for the purpose, and that whoever received the grant used the funds for the intended purpose.
We helped our client, a US charity, receive a large legacy that was stuck in a benefactor’s estate. The benefactor’s Will stipulated that the charity should use the legacy for a purpose that was no longer its key aim. The executor of the estate would not release the legacy
We applied to the court for permission to alter the charity’s purposes so that it could receive the legacy. The court agreed and the executor released the funds
When UK charities make overseas grants, they have to be sure the funds are applied for qualifying charitable purposes. A grant agreement may help, along with trusted representatives on the ground to monitor implementation.Tracey Neuman, Associate Director - Private Client
A grant-making charity funding a large project needs to craft the documents carefully both to make sure the project furthers the required charitable purpose, and to protect the grant-making charity’s name and reputation.Simon Phelps, Partner - Private Client
Our client was a charity that runs a community center and arts venue in north London.
We advised on a restructuring that allowed it to find a tax-efficient and practical way to manage its many projects – from a residential property development, to trading and charitable activities on its 35,000 square foot site.
We advised our client, a charity that owns a well-known piece of UK foreshore, on a precedent-setting restructuring.
The new structure introduced the role of a protector, who would monitor possible conflicts of interest between the local council and the charity. The new structure was the first to use a protector role in a Charity Commission scheme.
Charities need to think carefully about how they carry out trading activities and what the tax implications will be. Establishing an efficient structure at the outset will save time and money.Simon Phelps, Partner - Private Client
“We see a surprisingly large number of Charity Commission queries about governance issues in family charities, particularly around conflicts of interest and private benefit. It’s worth having your house in order.”Simon Phelps, Partner - Private Client