Debbie McIlwraith outlines some of the issues Scottish charities should be considering in the run up to the independence referendum vote in September.
Following the publication of the Scottish Government White Paper on independence, the question now posed to Scotland’s charities, social enterprises and not for profits is “what’s next?”
The white paper marked a significant milestone in the Scottish constitutional debate on the road to the referendum on 18th September 2014. As a third section organisation, what should you be doing or considering during the next few months?
The third sector team at Tods Murray has come up with a series issues that boards may wish to discuss and raise within the organisation as a whole and with service users as necessary.
The first point is: have you started discussing the referendum and its possible consequences? Many organisations were awaiting the release of the white paper to use as the starting block for discussion. It may simply be the case that the result of the referendum will not have any real impact on your organisation and no further action is required; however you will not reach that conclusion until the matter is discussed.
No matter what side you take, personally or as an organisation, the best position to be in is an informed one
What does your constitutional document say? Does it contain geographical restrictions regarding membership or scope of charitable activity? Does your constitution need to be updated? It is generally agreed that this is a good opportunity to review and update your constitution anyway. Do you know how to change your constitution? Are you aware of Office of the Scottish Charity Regulator (OSCR) time limits?
Is the referendum on your risk register, or equivalent document? As the debate progresses, things may change and your organisation must be responsive to this. It is good governance to continually assess potential risks and outcomes. Does your organisation have an agreed stance on the independence debate if asked by third parties, has this statement been issued to staff and volunteers?
What are your funding arrangements? Are you working to a short or longer term funding plan? Where does the majority of your funding come from, and could this change depending on the outcome of the independence vote? Speak to your funders if appropriate.
Should your organisation participate and take a stance with either the Better Together or Yes Scotland campaigns? OSCR has already advised that charities are free to do so, so long as they act within the law. When deliberating on this point, not only should you consider whether participating is in line with your charitable purposes, but also whether an active standpoint could be viewed unfavourably by funders/donors. You must also be aware of relevant electoral law so look out for guidance from the Electoral Commission being issued in July regarding the Lobbying Act.
If your organisation is UK-wide, you will need to consider additional matters in the event of a yes vote. This include whether you will split the charity into two separate organisations on either side of the border and the impact on structure, control, division of assets/liabilities. You will want to consider pension pots and deficits and separate regulation by OSCR and the Charity Commission, to name but a few.
Whichever campaign is successful in September, any changes to the third sector will not be immediate. It is likely that no substantial changes will be effected until after the next election. The above questions will still be relevant after the vote; you should ask yourself/your organisation all the questions again to ensure that your position hasn’t changed post-referendum.
No matter what side you take, personally or as an organisation, the best position to be in is an informed one. As the debate reaches its climax, more and more guidance is becoming available. If you are unsure then get in touch with any member of the Tods Murray Third Sector Team.
Debbie McIlwraith is a Solicitor in the Tods Murray solicitors third sector team.