The haysmacintyre Annual Charity Conference

1. The haysmacintyre AnnualCharity Conference Tuesday 6 June 2006

2. Welcome Richard Weaver Partner, haysmacintyre

3. Overview – The Sector • 190,000 charities • Public trust and reputation • 88% of people surveyed said the main factor in their trust of charities was an inherent belief that they were well managed and spending their money well

4. Overview – The Sector, cont… • 84% said they were more likely to trust a charity if they'd heard of them - so a charity's profile affects their trust rating • 44% of people trust big charities more than smaller ones

5. Overview - Regulation • Regulation and accountability • Changes at the Commission • Filing of accounts • SORP 2005 • SIR • Guidestar UK • Increased public scrutiny

6. Overview – Commerciality • The fight for funding, especially core funding • Charity fundraising • Maximising investment returns • Service delivery = downside risk • Charities must make a profit…..sorry surplus!

7. The future • Charities future role in society • Financial constraints – full cost recovery • The need to look forward strategically and identify new opportunities • Obligations on trustees to be more active

8. The days events • Regulation – Charity Commission • Legal update – Farrer & Co. • Investments and the economy – Rensburg Sheppards • Fighting for your cause – Diana Garnham

9. The days events • New ideas and regulation in fundraising – Institute of Fundraising • Effective leadership – ACEVO • Compliance – Reporting and VAT • Panel to answer your questions.

10. Developments at the Charity Commission and in charity regulation Andrew Hind Chief Executive

11. Some context - the sector • 190,000 registered charities • Annual income £38 billion • 78% of income accounted for by 3% of charities • 600,000 paid staff • 900,000 trustees • 27% of population volunteer once a month

12. A time of great opportunities • New Office of the Third Sector • New Minister for the Voluntary and Community Sector • Joint Cabinet Office/HM Treasury review of the third sector • CSR 2007 • A new Charities Act (?) • A rejuvenated Charity Commission

13. A new vision and mission

14. Promoting best practice • We are putting more emphasis on encouraging charities to improve their performance • Creation of Charity Effectiveness Division to capture knowledge from our casework • New priority to building partnerships to encourage innovation and collaborative working across the sector • Sharing our brand is now firmly on the agenda

15. Recent developments in charity regulation • Improving standards of governance • Maintaining independence • Promoting public trust and confidence • The Charities Bill

16. Trustees are the key to good governance – some facts • 900,000 trustees • 76% are over 45; 42% are over 60 • Only 0.5% are under 24 • 55% are male; but 70% for large charities • 4.8% are from a black or minority ethnic community • Average board size is 10; 19 for large charities Sources: Charity Commission (2005) and Chris Cornforth/NCVO (2001)

17. Recent developments - 1 • Improving standards of governance • The new code for the VCS • Clarity about strategic direction • Value leadership at all levels • Ensure trustees are effectively recruited, supported, developed • Understand complementary nature of executive and non-executive roles

18. Recent developments - 2 • Maintaining independence • Executives and trustees must ensure that their charity remains independent • 37% of sector’s income is from government • Most charities are small, with no public service delivery role • The ‘Wigan and Trafford’ decision

19. Recent developments - 3 • Promoting public trust and confidence • Promoting accountability and transparency with stakeholders and public • Role of the SORP and SIR is critical • Performance of the leading charities on filing times needs to improve • Never lose your passion for achieving change and delivering results on behalf of beneficiaries

20. Recent developments - 4 • Charities Bill • Public benefit test • Charity Tribunal • Charitable Incorporated Organisation • Measures to facilitate fundraising regulations • Increases to thresholds, new group accounts provisions • New objectives and powers for Charity Commission

21. Developments at the Charity Commission and in charity regulation Andrew Hind Chief Executive

22. Legal updatebyJames CarletonPartner, Charity & Community team haysmacintyre Charities Conference 2006

23. In this session • Where are we now with the Charities Bill • Self Regulation of Fundraising • Charities and Trustee Investment (Scotland) Act 2005 • Employment • Other legal developments

24. Charities Bill – where are we now • Strategy Unit recommendations • Draft Bill, First Bill, Second Bill … more amendments made and to come • Completed its passage through the House of Lords • What will happen in the Commons?

25. Charities Bill • New Heads of Charity • Trading • Charity Commission & Charities Tribunal • Fundraising

26. Charities Bill Other charity law reforms • Mergers • Exempt & excepted charities • Small charities

27. New & developing legal structures • CIOs - Charitable Incorporated Organisations • CICs - Community Interest Companies • Industrial & Provident Societies

28. Regulation of Fundraising Scheme (RFS) Administration • Est. of Fundraising Standards Board (FSB) • Initially to be housed within the Institute of Fundraising • Overseen by Council • Codes of Practice & Donors’ Charter • To become freestanding body

29. Regulation of Fundraising Scheme (RFS) Membership • Members’ obligations • Adhere to Codes and Donors’ Charter • Use logo and provide donors with details of RFS • Run compliant internal complaints scheme • Monitoring and reporting • Pay a membership fee

30. Regulation of Fundraising Scheme (RFS) Complaints • Stage 1: Complaint to the body for whom funds are being raised • Stage 2: Complaint reviewed by FSB • Stage 3: Complaint reviewed by Independent Complaints Reviewer • Stage 4: Council adjudication

31. Employment (1) • TUPE Regulations 2006 • New unfair dismissal and redundancy limits • Age Discrimination Regulations • Work and Families Regulations • Consultation obligations on changes to pension entitlement • The Employment Equality (Sex Discrimination) Regulations 2005 • National Minimum Wage increase

32. Employment (2) Volunteers: South East Sheffield CAB -v- Grayson: • Is there a contract? • Is the Charity obliged to provide work? • If the volunteer fails to work would it be a breach of contract?

33. Employment (3) • Are they unpaid (other than payment of actual, out of pocket expenses)? • Can they withdraw their services without notice? • Can the Charity stop the voluntary work without notice? • Does the Charity deny them the fringe benefits it provides to its employees? If all “yes”, they’re probably a volunteer

34. Employment (4) • Employees and consultants • Contract (need not be in writing) • Legally binding • Consideration • Employee • Consultant

35. Other legislation • Company Law Reform Bill • Charities and Trustee Investment (Scotland) Act 2005 • Finance (No 2) Bill 2006 • - substantial donors • Freedom of Information Act 2000 • - Informational Tribunal

36. James Carleton 020 7917 7405 (T) 020 7917 7408 (F) jhc@farrer.co.uk

37. BREAK

38. Investment Outlook and Strategy June 2006 Presented by John Haynes

39. Agenda • Introduction….setting the scene • The Economic Backdrop • The Outlook for Asset Markets • Our Strategy • Summary & Conclusions

40. The last five years Source Bloomberg & Datastream 30 May 2006 A Bear and a Bull Market in a half decade

41. Agenda • Introduction….Setting the scene • The Economic Backdrop • The Outlook for Asset Markets • Our Strategy • Summary & Conclusions

42. World Growth at a Glance World GDP Growth 04 Share Of GDP 2004 2005 2006E 2007E 8 8 Global $ GDP Global 5.1% 4.5% 4.5% 3.8% 100% Recession Threshold 7 7 Linear (Long-term US 4.2 3.5 3.4 3.1 31.0 6 6 Trend) 5 5 UK 3.1 1.8 2.3 2.6 4.7 4 4 EMU 2.1 1.6 2.3 1.4 20.2 Emerging Europe 6.4 5.7 5.6 5.2 2.5 3 3 Japan 2.3 2.6 3.2 2.3 14.6 2 2 Asia Ex-Japan 8.0 7.6 7.1 6.1 13.5 1 1 China 10.1 9.9 9.5 7.5 4.3 India 7.4 8.0 7.0 6.7 1.3 0 0 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07e Latin America 5.8 4.3 4.4 3.8 6.0 Economic Outlook Source: Morgan Stanley A slow-down in growth, not a collapse

43. Inflation But growth is only half the picture

44. Global Monetary Policy …..there is an increasing risk of a policy mistake

45. Agenda • Introduction….Setting the scene • The Economic Backdrop • The Outlook for Asset Markets • Our Strategy • Summary & Conclusions

46. Valuation 1 At first-blush, stocks look appealing . . .

47. Valuation 2 . . . but objectively stocks and bonds now have similar attractions

48. Earnings Forecasts . . . With moderating inflationary pressures, growing earnings & forecast upgrades, both bonds & equities should deliver positive returns

49. Risks • To Growth- Commodity “taxes” impact worse than expected- Policy error- Disorderly $ damages corporate confidence- (Geo) Political dislocation- Health scare (pandemic)- Financial “event” • To Valuation- Inflation …..Increase with the maturing of the economic cycle

50. Sentiment • Recent evidence of complacency, not of euphoria. • M&A at record levels, but cash component is high Investors do not have unrealistic expectations of likely returns