There is currently much concern in the charity sector following the global uncertainty in the financial markets and particularly the banking sector.  Nevertheless, the situation may not be as bad as it first seems.
 
Many charity trustees are concerned about the security of their charity's deposits and their personal responsibilities in the event of loss.  The Charity Commission has issued helpful guidance on this.
 
Broadly speaking, incorporated charities which fall as "small" or "medium-sized" and small unincorporated charities will have the same protection as individuals, that is up to £50,000 which will be protected automatically.  Trustees who can demonstrate that they have behaved sensibly and not negligently will not be liable for any losses incurred.
 
The Charity Commission guidance can be found at:
 
http://www.charity-commission.gov.uk/news/fincomp.asp
 
In addition, some charities have invested money with one of the failed Icelandic banks.  There is no general protection for charities in the same way as there is for individuals but the Treasury has announced that measures have been put in place to ensure that all retail depositors in the charity sector will receive their money in full.  The Charity Commission and Treasury have issued guidance which can be found via the following links:
 
http://www.charity-commission.gov.uk/news/ice.asp
 
http://62.164.176.164/press_103_08.htm
 
Whilst the situation continues to evolve, trustees should of course always bear in mind the need to properly manage the charity's investments and cash deposits.  If you need any further guidance on this, do let us know and we can help point you in the right direction. Many local banks have indicated to us that they are willing to talk to any charities about their current positions.
 
 
For further information, please contact Alan Jordan at ajordan@menzies.co.uk, or Richard Snelling at rsnelling@menzies.co.uk