Policies for Organisations Overview
By implementing comprehensive policies, a charity in Scotland can operate more effectively, safeguard its mission, and serve its community better.
This document provides a set of suggested policies intended as a general guide to support organisations in developing or updating their own policies. However, it is important to note that these recommendations may not address every unique situation, regulatory requirement, or specific operational need an organisation may encounter. Each organisation operates within a distinct legal, regulatory, and cultural framework that may necessitate tailored policies, processes, or procedures to fully address its particular context and risks.
Before implementing any suggested policies, organisations should conduct a thorough assessment to ensure alignment with their unique goals, values, and legal obligations. It is advisable to seek professional legal, regulatory, or compliance counsel to determine the applicability of these recommendations to their specific situation.
Why do Charities Need Policies?
A charity in Scotland must establish and adhere to certain policies to ensure it operates legally, ethically, and effectively. These policies help the charity maintain compliance with regulations set by the Office of the Scottish Charity Regulator (OSCR) and other relevant laws.
Without proper policies, a charity in Scotland risks legal and financial penalties, loss of charitable status, damage to its reputation, and operational inefficiencies. Policies are essential for ensuring compliance with laws, protecting trustees and beneficiaries, maintaining public trust, and achieving the charity’s objectives. Implementing these policies is not only about avoiding risks but also about fostering a healthy, effective, and sustainable organisation.
Charities in Scotland need policies for several key reasons:
- Compliance with Laws and Regulations: Charities must adhere to the Charities and Trustee Investment (Scotland) Act 2005 and other relevant legislation. Policies help ensure compliance with these laws.
- Governance and Accountability: Clear policies establish governance structures and accountability frameworks, ensuring trustees and staff understand their roles and responsibilities.
- Risk Management: Policies help identify and mitigate risks associated with the charity’s activities, including financial, operational, and reputational risks.
- Operational Consistency: Having established policies ensures consistency in decision-making and operations, improving efficiency and effectiveness.
- Safeguarding and Wellbeing: Policies related to safeguarding, health and safety, and welfare are crucial for protecting vulnerable individuals and ensuring a safe environment.
- Transparency and Trust: Well-defined policies enhance transparency, building trust with stakeholders such as donors, beneficiaries, and the public.
- Strategic Direction: Policies guide the charity’s strategic direction, ensuring alignment with its mission and objectives.
- Resource Management: Effective financial and resource management policies help ensure sustainability and accountability in the use of funds.
Key Policies for Charities to Consider
This is not a definitive or exhaustive list. Organisations should consider their needs, setup, and aims when deciding on policies to adopt. Adopting policies without proper customisation and consideration of organisational needs may lead to unintended outcomes or non-compliance with relevant regulations.
- Governance and Compliance Policies
- Governing Document: Defines the charity’s purpose, governance, and trustee powers.
- Code of Conduct for Trustees: Outlines trustee responsibilities and ethical standards.
- Conflicts of Interest Policy: Ensures impartial decision-making by declaring potential conflicts.
- Risk Management Policy: Identifies risks and provides mitigation steps.
- Compliance with OSCR Requirements: Ensures the charity meets OSCR’s filing and transparency standards.
- Financial Policies
- Financial Controls Policy: Details processes for managing funds and financial reporting.
- Fundraising Policy: Ensures compliance with fundraising laws.
- Reserves Policy: Specifies how much money the charity will hold in reserve.
- Gift Acceptance Policy: Guidelines on the types of gifts the charity will accept.
- Investment Policy: Outlines acceptable investment practices and risk levels.
- Expenses Policy: Defines recoverable expenses and the claiming process.
- Operational Policies
- Health and Safety Policy: Ensures compliance with health and safety regulations.
- Data Protection and Privacy Policy: Compliance with GDPR to protect personal data.
- IT and Cybersecurity Policy: Safeguards digital assets and ensures safe online practices.
- Volunteer Policy: Provides guidance on recruiting, managing, and supporting volunteers.
- HR and People Policies
- Equal Opportunities and Diversity Policy: Promotes equality and inclusion.
- Safeguarding Policy: Protects vulnerable individuals from harm or abuse.
- Whistleblowing Policy: Encourages reporting of unethical practices.
- Grievance and Disciplinary Policy: Ensures a fair process for disputes and breaches of conduct.
- Carers Policy: Outlines support for employees balancing work and caregiving.
- Environmental and Social Responsibility Policies
- Environmental Policy: Commits to reducing environmental impact and promoting sustainability.
- Ethical Sourcing Policy: Ensures ethical sourcing of goods and services.
- Communication and Confidentiality Policies
- Communications Policy: Guides communication with stakeholders.
- Media and Social Media Policy: Manages media inquiries and social media presence.
- Confidentiality Policy: Protects sensitive information in compliance with data protection laws.
- Monitoring and Evaluation Policies
- Impact Measurement Policy: Ensures evaluation of activities against charitable objectives.
- Complaints Handling Policy: Provides a clear process for addressing complaints from stakeholders.
Legal Requirements and Best Practices
- Charitable Purposes and Public Benefit: Activities must align with the charity’s purposes and provide public benefit as defined by Scottish law.
- Transparency and Reporting: Annual reports and accounts must be publicly available and comply with OSCR standards.
Templates, Model Policies & Checklists
For further guidance, organisations can access a range of useful templates, model policies, and checklists from SCVO’s archive: SCVO Templates.
Do Smaller Charities Need All the Policies?
Smaller charities in Scotland may not need as many policies or as much detail as larger charities, but they must still address essential areas such as governance, financial controls, legal compliance, and safeguarding (if applicable). While the scope and depth of policies may be scaled down to reflect the size and activities of a smaller charity, certain policies remain necessary to meet legal obligations, protect the charity, and ensure good governance.
The key is adopting a proportional approach: tailoring policies to the size and complexity of the charity’s activities while ensuring compliance with basic regulatory and legal requirements. This approach ensures that even small charities are protected, well-managed, and compliant with Scottish charity law.
How Smaller Charities Can Approach Their Policies:
- Proportional Approach
- Simplified Policies: Smaller charities can adopt shorter, simpler policies that still cover the essential areas but without the formality or detailed provisions required for larger charities.
- Combining Policies: In some cases, smaller charities can merge policies into a single document. For example, a combined governance and financial management policy can address both areas in a concise format.
- Focusing on Core Requirements: Smaller charities should focus on key policies such as financial controls, safeguarding (if relevant), health and safety, and trustee responsibilities. More complex policies may not be necessary unless the charity’s activities require them.
- Essential Policies for All CharitiesRegardless of size, all charities should have the following key policies in place:
- Governing Document: Every charity must have a governing document (e.g., constitution, trust deed, or articles of association) outlining the charity’s purpose and governance. This is a legal requirement.
- Trustee Code of Conduct and Conflicts of Interest: Trustees must adhere to ethical standards. A simple code of conduct and conflicts of interest policy ensures trustees meet their duties.
- Financial Controls Policy: Even small charities need basic financial controls to prevent misuse of funds, ensure transparency, and comply with OSCR regulations.
- Risk Management Policy: A basic risk management policy identifies and mitigates key risks, particularly financial or operational risks.
- Health and Safety Policy: If the charity employs staff or involves volunteers, a health and safety policy is required to comply with the law and protect individuals.
- Data Protection and Privacy: Compliance with GDPR is essential for all organisations, regardless of size. Small charities must have policies for handling personal data, particularly for donors and beneficiaries.
- Policies Based on ActivitiesSome policies depend on the specific activities of the charity. Smaller charities may not require certain policies unless they engage in particular types of work:
- Safeguarding Policy: Essential if the charity works with children, vulnerable adults, or other at-risk groups. If the charity doesn’t engage with these groups, this policy may not be necessary.
- Fundraising Policy: Charities that conduct significant fundraising, even on a small scale, should have a fundraising policy to ensure legal and ethical compliance. For minimal fundraising activities, this policy can be brief.
- Volunteer Policy: If the charity uses volunteers, a basic policy outlining volunteer roles, responsibilities, and rights should be in place. If no volunteers are involved, this policy may not be necessary.
- OSCR ExpectationsOSCR, the charity regulator in Scotland, understands that smaller charities may not need the same level of detailed policies as larger ones. However, they still expect all charities to:
- Operate in line with their charitable purposes as set out in their governing document.
- Ensure sound governance and financial management through appropriate processes.
- Be transparent and accountable, particularly in reporting to OSCR and handling donations or public funds.
OSCR’s guidance encourages proportionality, meaning that smaller charities can scale down the complexity of their policies as long as they meet the fundamental legal requirements.
