How to report serious incidents in charities

If a serious incident occurs in your charity, it’s vital that it’s reported promptly to the Charity Commission. Charity trustees must understand their reporting responsibilities and act promptly.

Our Charities and Not-for-Profit team regularly advises trustees on serious incident reporting, from deciding whether a report is required through to drafting the report itself and handling any follow-up correspondence with the Commission.

The charity’s trustees are responsible for deciding whether an incident is serious enough to report and for ensuring the report is submitted promptly. If a report is not made, or is delayed, the trustees may be held accountable.

For registered charities, the reporting body is the Commission, which acts as their principal regulator.

In practice, this means that charity trustees should report serious incidents directly to the Commission as soon as reasonably possible using the Commission’s online form.

Serious incident reporting guidance

The Commission provides comprehensive guidance on the specific content and format of a serious incident report; this guidance sets out the most comprehensive and authoritative framework for charities to refer to when reporting a serious incident.

The Commission defines a serious incident as an adverse event, whether actual or alleged, which results in, or risks, significant:

• Harm to individuals connected with the charity
• Loss of the charity’s money or assets
• Damage to charity property
• Harm to the charity’s work or reputation.

Whether an incident is ‘significant’ will depend on the particular charity, having regard to its relative size, operations, finances and reputation. Charity trustees are ultimately responsible for deciding whether an incident meets this threshold and requires reporting.

The Commission provides detailed guidance on reporting serious incidents, including an examples table to help trustees decide what may or may not be a serious incident.

Serious incidents should be reported in a prompt, full and frank manner and should include:

• Details of what happened
• The impact on the charity and its connected people
• Whether other regulators have been informed
• Steps taken to manage the incident
• Measures put in place to prevent a similar incident recurring.

If trustees decide not to report a particular incident, they may later be required to justify that decision. Clear, detailed and factual record-keeping is essential, particularly for borderline incidents where the decision is not to report.

It can be challenging for trustees to assess what amounts to ‘significant’ harm. Reportable incidents can be broadly categorised, without limitation, as follows:

• Incidents that have resulted in, or risk, significant harm to beneficiaries and other people who come into contact with the charity through its work
• Financial crimes such as fraud, theft, cyber crime and money laundering
• Large donations from an unknown or unverifiable source, suspicious financial activity using the charity’s funds or other significant financial loss
• Links to terrorism or extremism, including banned organisations, individuals subject to an asset freeze or the kidnapping of staff
• Incidents such as insolvency, forced withdrawal of banking services without an alternative, significant data breaches or losses, or incidents that materially affect the charity.

Depending on the nature of the incident, charity trustees may also be required to make disclosures to other regulators, such as a local authority or the police.

Delegating the power to report

The act of reporting a serious incident may be delegated to, for example, a senior member of staff within the charity. However, ultimate and collective responsibility for reporting rests with the charity trustees, including ensuring reports are accurate and not misleading.

Updating a serious incident report

Once an incident has been reported, trustees can update or provide further information as the situation progresses or circumstances change. The Commission is likely to ask to be kept informed even after the initial serious incident report has been submitted, and it’s common for the Commission to raise follow-up questions or request additional information over subsequent weeks or months.

Handling this ongoing correspondence carefully is just as important as the initial report, since inconsistent or poorly considered responses can raise further concerns for the Commission.

Other important considerations

1. Proactive reporting

Where a charity is also regulated by another body (such as the Care Quality Commission or the Independent Schools Inspectorate, for example), trustees should consider whether a report is also required to that regulator in addition to the Commission. A belt-and-braces approach may be prudent, particularly where an incident has attracted, or risks attracting, adverse media coverage that could affect the reputation of the charity.

It’s almost always preferable for a charity to report a serious incident itself, rather than the Commission becoming aware of it through a third party such as the media. Trustees in that position may be asked to explain not only what occurred, but why it wasn’t reported. Early, proactive reporting places the charity in a far stronger position.

2. Engaging professionals

Charity trustees should consider whether to seek legal support from charity lawyers with particular experience of serious incident reporting. This may be appropriate even where trustees decide not to report, to help confirm and document their decision-making.

Our Charities and Not-for-Profit team regularly assists trustees with assessing whether an incident meets the reporting threshold, preparing and submitting the report itself and, importantly, managing the Commission’s follow-up correspondence once the report has been made.

Where a serious incident occurs, communications are as important as legal compliance. Charities may also wish to instruct PR professionals to help prepare clear, consistent messaging for beneficiaries, staff and stakeholders, as well as the media.

Taking control of the narrative early can demonstrate that the charity is managing the incident responsibly and helps ensure it remains on the front foot with the Commission.

3. Internal steps

External reporting is only one part of the response. Internally, senior charity leaders should work closely with trustees to develop a clear action plan addressing the incident, including communications with staff, beneficiaries and other stakeholders where appropriate.

It’s equally important to ensure lessons are learned. Charities should review how the incident occurred and what steps can be taken to prevent a recurrence. This may include reviewing and updating policies and procedures (including having a specific policy on serious incident reporting), such as safeguarding arrangements.

Depending on the nature and severity of the serious incident, an external governance review may also be appropriate to identify any areas of weakness or exposure.