Case Study on Resilience and Smaller Almshouse Charities

This Case Study explores issues affecting the resilience of smaller almshouse charities, and the role of others that support them. Written primarily for the trustees and residents of smaller charities, we explore what works within their local context to build resilience and meet the challenges they can face.

Most almshouse charities are small: 80% have no more than 20 almshouse dwellings. Many smaller charities have no paid staff, so our focus here is on charities with no staff or very few staff.

The Case Study looks at three questions:

1. What does a smaller almshouse charity need to do?
2. What are the key challenges for smaller charities and what can be learnt from how others have approached these challenges?
3. Where can smaller charities go for help and guidance?

In the discussion below, where quotations are included from our interviewees, we provide a code to show its origin. For example, (Governance 19) indicates the quotation is from our 19^th interviewee amongst senior staff and trustees.

1. What does a smaller almshouse charity need to do?

All almshouse charities need to meet regulatory requirements, because if a charity fails to meet regulatory requirements, this can affect reputation and access to finance and threaten the charity’s survival.

Of the wide range of regulatory requirements, examples include:

• Governance regulations: submitting annual returns to the Charity Commission; time limits for trustees
• Housing regulations: residential status for living/working in the UK; Energy Performance Certificates (EPCs)
• Building regulations: electrical installations, gas safety, asbestos, legionella.

1.1 Governance regulations

All almshouse charities are regulated by the Charity Commission and the Commission has a Code of Governance for small charities. Some almshouse charities are also Registered Providers of Social Housing, because of previous or potential access to social housing grant. Registered Providers are also regulated by the Regulator of Social Housing and the National Housing Federation Code of Governance. For more details on both Codes of Governance (see Additional Information below and Theme Charity Governance. Both Codes were revised and strengthened in 2020 with an emphasis on Equality, Diversity and Inclusion (EDI), managing risk and resident engagement.

The Charity Commission Code of Governance for small charities is currently 28 pages long. A senior manager at a research partner charity went through the Code with trustees of small charities that they manage. The Chair of one small charity explained that some trustees were taken aback “by the number of items that appeared … and the self-questioning paperwork” (Governance 19). The trustees agreed to go through it all thoroughly after the manager explained that “because we’re the managing agent, we’ve got to be seen to do things properly” (Governance 24).

Interviewees were concerned that trustees at small charities may be unaware of regulation and compliance:

I’ve spoken to other almshouse charities who say they’re registered [providers] and don’t realise they have to be members of the Housing Ombudsman [Service]

(Governance 23)

Charities are required to submit annual returns and accounts to the Charity Commission by a date following their accountancy year-end; there are fewer questions on the annual return for small charities with a very low annual income. Late submissions can be the only warning sign of potential problems at a small charity. There may be no other way to know if they need support and guidance, unless they approach the Almshouse Association, their regional peer support person, another almshouse charity or attend a regional meeting, forum or training session. Several interviewees also pointed out the wider risks, because a small charity could file its return on time but have no active trustees, or their almshouses could be in a poor state of repair. There have been cases in the past where the local council had imposed a Closing Order, so that the property could no longer be used for accommodation unless defects were remedied [1].

Small almshouse charities may be at a disadvantage in developing EDI policies and procedures, compared to larger charities with a staff team, such as the partner featured in our Case Study on Diversity and Inclusion. However, the Charity Commission’s Code of Guidance Section 6 on EDI stresses that ‘Boards that commit to equality, diversity and inclusion are more likely to set a positive example and tone for the charity by following an appropriate strategy for delivering its purpose and setting inclusive values and culture’. Interviewees pointed out that this could also help them in other aspects, including finding new trustees and residents, and developing more links with external organisations and local authorities.

1.2 Housing and building safety regulations

Energy Performance Certificates (EPCs) are required for all homes for letting and are valid for five years. They  need to be current before a vacancy is filled: an interviewee emphasised that this matters. If trustees or others managing their almshouses are unaware:

They’ll suddenly wake up one morning and find they’re not legally allowed to re-let their properties because they’re not EPC compliant. ‘Oh, no one told us anything about that.’ ‘Well, the information has been out there for decades, why haven’t you picked it up?’

(Governance 17)

Almshouse charities have obligations to check that new residents have the right to live and work in the UK. One research partner charity was unable to finalise an offer of accommodation to a new resident at a small almshouse until a problem with their status was resolved.

2. What are the key challenges for smaller charities and what can be learnt from how others have approached these challenges?

Some smaller charities have been at risk of failure if unable to overcome challenges which may include:

• Recruitment of trustees
• Financial stability, including budgeting and setting Weekly Maintenance Charges (WMCs) for residents
• Maintenance and upgrading their almshouses
• Finding new residents.

2.1 Recruitment of trustees

All almshouse charities have voluntary unpaid trustees. Successful charities engage in long-term planning for succession, because finding new trustees is essential for the continuation of the charity:

It’s far too late once you’ve got to two 82-year-olds, one of whom is in and out of hospital, suddenly left with everything to do … you need to do it while you’ve still got active trustees, … bring people on as observers, speak to residents, contact other local organisations to see where people could volunteer and be actively trying to recruit replacements … rather than just pretending it’s not a problem until it is.

(Governance 17)

The number of active trustees is important for the charity’s resilience. The charity’s governing document (rules) will refer to the number of trustees, and the minimum number who need to attend each meeting for it to be ‘quorate’ and to have valid proceedings: we found that small charities may have had enough trustees, but sometimes found it difficult to get trustee attendance (see Additional Information below).

If a trustee meeting is not quorate, discussions can still take place, but decisions are not legally valid until confirmed by a later quorate meeting. If there are trustee places for the local vicar or for councillors and they cannot attend regularly, this can be an issue. One very small charity was supposed to have the local vicar, but because of covering so many parishes and churches “they just don’t have the time … So we had to amend the rules a few years back so that we didn’t have to have a vicar because we just couldn’t get one” (Governance 24).

Historically, charities have often sought trustees amongst “the local great and the good” (Governance 12) and amongst professionals and their organisations. Over recent decades, society has changed: as the Chair of one small almshouse charity said: “One of the problems that organisations, like Lions and like Rotary, face … their age profile is advancing … that will have an impact [on finding trustees] for small charities” (Governance 19).

Several interviewees echoed similar concerns and suggested that smaller charities need to think creatively about how to widen their sources for new trustees. They gave ideas and examples of different approaches:

• Potential trustees can be attracted by engaging with the community through events such as open days, and news items and stories for local press and TV.
• There will be people with skills who care about their local community and who want to make a difference: perhaps someone with an interest in older people, in housing for families or younger people, or in local history, who may be interested in a trustee role.
• Serving as a trustee with a small almshouse charity can provide opportunities for professional development, as well as bringing different skills to the charity: perhaps someone working in social housing, in health and social care or in property management/maintenance. Senior staff members at our partner charities have been trustees of other smaller charities for some time; one has recently become a trustee of a local small charity as part of their professional development.
• Some smaller charities have websites or use social media. Larger almshouse charities had used external agencies to help them find new trustees, but this can involve paying fees. There are also organisations providing free advertisements for charity trustees (see Additional Information below).

One very small charity in our research used their website and local advertising in the church and in community centres: “We’ve got two new trustees. We only needed one, but two came forward” (Governance 24). At a recent forum for almshouse charities in one locality, some charities said that potential trustees need to understand that it’s not a job for life, so it’s made clear that they are only expected to serve for a limited time. New trustees are encouraged from the start to think about who will succeed them. Local forums can encourage the exchange of other ideas too: trustees feel that they’re not alone, and they can share information about contractors, vacancies and other contacts.

Residents can be effective trustees and, as one interviewee commented, they know what it’s like to live in the almshouses. We know of only a few almshouse charities with resident trustees. As for any trustee, there is a need for appropriate arrangements about confidentiality and conflicts of interest. A resident trustee explained: “I’ve been a trustee for two years. I’ve been here six years. The lady from here who was a [resident] trustee, she left [to move into a care home] … I’m a great believer in ‘Live your life to the full’” (Governance 21).

2.2 Financial security, budgeting and setting charges for residents

Weekly Maintenance Contributions (WMCs) for almshouse residents are similar to rent but different in law. Almshouse residents are not tenants: they occupy their accommodation under a licence as ‘beneficiaries’ of an almshouse charity and there is no Right to Buy. The legal status of almshouse residents is discussed in the Theme Charity Governance.

Most small almshouse charities do not have significant capital or income from endowments, so their main asset is usually the almshouse land and buildings and their income from WMCs. Interviewees gave examples of small almshouse charities where WMCs had been very low for many years. With charges as low as £30-£40 per week, the trustees were not future-proofing their charities and there was a risk of failure: “If the residents [had been] paying a more realistic weekly maintenance contribution over a period of years, then the charity wouldn’t have the problems it’s got now” (Governance 1).

If charities set their WMCs at a level eligible for Housing Benefit, this should enable them to build up reserves for future repairs and maintenance and the charity will be more resilient to future shocks. Many smaller almshouses were originally founded for ‘the poor’, although some charities have updated the language and now refer to people with ‘modest means’ or ‘low income and savings’. Residents are likely to be entitled to full or partial Housing Benefit towards their WMCs, as well as other welfare benefits. Increasing residents’ income is a win-win for residents and for almshouse charities: access to benefits advice and support may come from links with a specialist agency such as a local Age UK.

One respondent explained the range of methods used when setting budgets and WMCs:

We looked at the Standards of Almshouse Management. Do you allow for an Extraordinary Repair Fund? Do you allow for a Cyclical Maintenance Fund? Some do and some don’t. Some simply say, ‘Well we just add on 5% a year or 3% a year’

(Governance 23)

In its Standards of Almshouse Management, the Almshouse Association recommends including Extraordinary Repair Fund for items such as a new roof or heating system and Cyclical Maintenance Fund for regular cyclical items such as exterior or interior decoration.

At a recent forum for almshouse charities, WMCs was the sole topic: How do you set them, how do you deal with differing rates, how do you deal with people that can’t pay? Some participants said that they set their WMCs just below the council’s Local Housing Allowance (LHA) for benefits; some used the equivalent fair rent which could be different from LHA; others said they needed to balance their budget; some just incremented by a small percentage of the previous year’s WMC.  For more information on different approaches to setting WMCs, and on Housing Benefit and welfare benefits, see Additional Information below.

Interviewees sometimes found that trustees were reluctant to increase their WMCs. However, with recent large increases in costs such as insurance, utilities and maintenance, the charities were not resilient to future shocks, such as unexpected repairs. There were also some examples of arrears because of the pandemic and the cost of living:

A couple of our residents are still of working age … three residents have all got behind with their weekly maintenance contributions because they couldn’t afford to keep paying them. We’ve agreed repayment terms with them … over the next few years.

(Governance 1)

2.3 Maintenance and upgrading

If housing is not well-maintained, this can lead to problems for existing residents, difficulties finding new residents or trustees and reputational risk.  Upgrading may depend on whether the charity has sufficient reserves. The Chair of one small charity explained: “We installed a lift to enable people living on the first floor to be able to reach without having to struggle up the stairs” and, for replacing baths with walk-in showers, “there wasn’t any problem or anxiety on the part of trustees to afford that if that was seen as important” (Governance 19). Other examples included new heating systems and creating new one-bedroom properties from bedsits.

Heating systems

Several small charities needed to change outdated heating systems. In one example, “some residents were struggling with the heat and others would say it was too cold … It’s been a huge expense … [the homes are] not big enough to have [separate] boilers” (Governance 23).  In this listed building, the charity had to keep a shared heating system because the almshouses were so tiny. With the new radiators, residents can turn them off if they want to. In other cases that needed new heating, small charities did not have sufficient reserves because of a history of low WMCs, so there was not enough money yet to upgrade the system.

One small charity with a 1970s block of six flats had underfloor electric heating and a flat roof: both were starting to fail. The charity had sufficient reserves, but after taking on this small charity as corporate trustee, the Chair of one of our research partners explained “The previous trustees had not done anything about it, other than to try to patch it up. We bit the bullet and said ‘Let’s do it properly’” (Governance 1). They replaced the flat roof, installed solar panels, rewired the property and installed night storage heaters. For other small almshouse buildings, it may be more difficult, such as a “beautiful listed building [with] south-facing roof, and the tiles are all done like fish scales [but] who’s going to allow us to put solar panels on the roof? … I just can’t see them allowing us” (Governance 2).

Replacing bedsits

Many almshouses were originally built as bedsits which are no longer suitable, especially for older people with disabilities or long-term health conditions. Unless the properties have been extended or converted to create larger dwellings, they no longer meet modern expectations. If almshouses are hard to let and remain empty, the loss of income from WMCs can also impact the financial stability of the charity.

Several interviewees spoke about the opportunities to consider upgrading bedsits to one-bedroom properties, or to make other improvements, especially when a vacancy is created when a resident moves out. One of our partner charities converted bedsits into one-bedroom bungalows after one resident moved to a care home and other residents were happy to move into the converted properties. The Chair pointed out the increase in the WMCs after providing some funding to pay for the work: “that money has now been repaid through the much higher Local Housing Allowance” (Governance 1). Another respondent had plans to convert bedsits to one-bed flats drawn up and costed, for one of the charities that they manage. They hoped to use the same idea of residents moving into the larger properties on a rolling basis. Unfortunately, with the increase in building costs after the pandemic, the charity could no longer afford it and had to make do with only minor improvements to the bedsits (see also Themes Architecture and Adaptation and Maintenance and Opportunity).

2.4 Finding new residents

Previous research found that almshouse charities were often reluctant to contact their local authority about almshouse vacancies and may not have made much contact with other local organisations [2]. Several interviewees spoke about receiving referrals from local councils or from partners such as the local Age UK, including new residents from Ukraine and people at risk of homelessness: “The housing options team for any of the local councils will respond quite readily to me” (Governance 3). Receiving referrals does not prevent the almshouse charity from going through its normal processes for new applicants and the decision to appoint a new resident still rests with the trustees.

One barrier can be a narrow range of criteria for new residents: one interviewee explained this made it more difficult to work with their local authority: “Because we manage more than one, it’s trying to say, ‘Well this one is for over 55s, this one is for this [criteria], this one… they’ve got to have come from [town]” (Governance 23).

Many almshouse charities were founded to provide almshouses for specific groups; some were for members of a specific Christian denomination.  Such restrictions may make it harder to find residents when a vacancy arises. The governing documents (rules) of some small charities in our research state only that “preference will be given”, so that if there is no applicant from the specific denomination, the charities can then offer the vacancy to an applicant who meets their other criteria (for example age, local connection). Charities can also apply to the Charity Commission if they wish to broaden their criteria, subject to certain conditions (see Additional Information below and Theme Charity Governance for more about the Charity Commission and changing the criteria for residents).

The 2010 Equality Act in England legally protects people from discrimination, harassment or victimisation in the workplace, in the provision of services such as housing and support, and in wider society. The Act lists nine Protected Characteristics: age, disability, gender reassignment, marriage or civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation. The Act also includes a specific exception for charities: ‘The charities’ exception in the Act allows charities to restrict benefits to people with a particular protected characteristic …  if the restriction appears in its governing document.’

3. Where can smaller charities go for help and guidance?

Interviewees had concerns that some smaller charities may not be meeting their full potential and that some may even be at risk of failure. There are many ways that smaller charities can access support and guidance. Sources of support include:

• The Almshouse Association
• Another almshouse charity acting as corporate trustee
• Another almshouse charity acting as managing agent
• A local accountant, surveyor, solicitor or lettings agency
• An agency providing a range of management services to almshouse charities.

The Almshouse Association provides guidance and support to its member charities by telephone, email and post through its staff and volunteer regional peer representatives. It also represents the almshouse movement at local, regional and national level. Standards of Almshouse Management (SAM) is a benchmark guidance manual, supported by the Charity Commission, available to member charities. SAM is available on-line with updates. A new self-assessment health check is also available on-line for member charities: it covers all aspects of running an almshouse charity, with guidance notes and a score system.

Small charities can be helped in different ways. If a larger charity becomes the corporate trustee, the smaller charity will no longer need to have its own trustees, but will benefit from the larger charity’s experience, policies and procedures. With any other option, the charity needs to have its own active trustees.

Smaller charities need to ensure that key roles and responsibilities are covered, including the following:

• Clerk/administrator: trustee meetings’ agendas and minutes; compliance
• Finance: annual budget, advice on setting Weekly Maintenance Contributions (WMCs), monitoring income and expenditure, reporting to trustee meetings, providing information for accountant/ independent examiner, collection of WMCs, arrears management
• Buildings compliance: regulatory requirements including electric, gas, legionella, asbestos; quinquennial (5-yearly) inspection and works needed
• Property maintenance: contractors, reactive and planned repairs, void property refurbishment, upgrading
• Governance compliance: accounts and annual returns to the Charity Commission, compliance with Charity Commission Code of Governance; policies and procedures; Disclosure and Barring Service (DBS) for trustees/staff/volunteers; advertising and recruitment packs for new trustees
• Registered Providers (RPs): additional requirements for almshouse charities that are RPs include membership of the Housing Ombudsman Service; following an appropriate Code of Governance; different rules for maximum charges for residents
• Housing management: seeking and appointing new residents, links with local community, welfare benefits advice and arrears management, neighbour issues, complaints
• Out of hours contact arrangements: for repairs and/or other emergencies, depending on whether there is any monitoring system.

Our research found such roles undertaken by:

• voluntary trustees
• other volunteers, for example an independent examiner for the charity’s accounts
• employing individuals, perhaps a Clerk who may also act as the Clerk to other almshouse charities or the parish council
• contracts with external agencies.

There were some concerns that local agencies may be unaware of the unique identity and legal status of almshouse charities, and of regulatory changes, including the revised Codes of Governance.  There have been problems when a local lettings agency had taken deposits and granted Assured Shorthold Tenancies for almshouse residents, because they did not understand that almshouse charities are different from their usual procedures for private rented housing.

Based on their experience, interviewees suggested that smaller charities may find it helpful to ask the following questions to ensure that everything is  covered, either internally or externally:

• Who is responsible for each role? Is it a trustee, another volunteer or someone external?
• Does the individual or organisation have sufficient understanding and knowledge of the unique identity and different legal status of almshouse charities?
• Does the individual or organisation have sufficient understanding and knowledge of their range of responsibilities?
• Is there an agreement/contract setting out duties and any fees for each role?
• If more than one individual or external organisation is involved, are there any overlaps of responsibilities and costs, and how are these addressed?

The majority of almshouse charities are small. Their resilience is vitally important for the almshouse movement. In this Case Study, the challenges for resilience have been explored, with examples of factors to consider, of the roles of others who can support them, and of where to find help and guidance.  We hope that our exploration of what has worked to build resilience will help smaller charities to meet the challenges they face, so that they not only survive but also thrive.

References

[1] Pannell, J. (2013) Transforming almshouses for the 21^st century, Housing LIN Report

[2] Pannell, J., Pooley, A. &  Francis, S-A. (2020) Almshouses for the 21st century: transformation in progress, Housing LIN Viewpoint 100

Additional Information

Limitations

The Knowledge Hub is not a definitive source for legal or regulatory information.

All references to legal or regulatory requirements relate to English law and regulations. Our data collection was done in England. Different laws and regulations may apply in Wales, Scotland and Northern Ireland.

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Codes of Governance

The Charity Commission Code of Governance for smaller charities

The NHF Code of Governance 2020 for Registered Providers

The National Housing Federation (NHF) is the membership organisation for housing associations. Small charities that are Registered Providers (RPs) can choose whether to sign up to the Charity Commission Code or the NHF Code. The Regulator of Social Housing’s Governance and Financial Viability Standard sets the rules around signing up for a code of governance for RPs. The Standard says that “Registered providers shall adopt and comply with an appropriate code of governance. Governance arrangements should establish and maintain clear roles, responsibilities and accountabilities for the board, chair and chief executive and ensure appropriate probity arrangements are in place. Areas of non-compliance with their chosen code of governance should be explained. Registered providers should assess the effectiveness of their governance arrangements at least once a year.” (Para 2.1).   

Quorums for trustee meetings

The rules around a quorum will depend on the specific governing document of the charity.  See Charity Commission guidelines under “Rules for charity meetings”. Typically the quorum may be a proportion (usually 50%) or a specific number such as 3.

Changes to governing documents

Charity Commission guidance on making changes to governing documents: How to make changes to your charity’s governing document (CC36)

Setting Almshouse Weekly Maintenance Contributions (WMCs)

Almshouse charities set their WMCs each year in different ways. Some smaller charities tended to set their WMCs near to the Local Housing Allowance (LHA) for Housing Benefit.  Smaller charities that are Registered Providers of Social Housing are regulated by the Regulator of Social Housing, which sets rules for maximum ‘rent’: this can vary for sheltered housing and for other housing.

Smaller almshouse charities may set their WMCs using a different method of an ‘equivalent fair rent’ obtained as informal non-statutory advice from the government’s Valuation Office Agency Rent Officers. The ‘equivalent fair rent’ may be lower than the LHA but if so, there is a risk that the charity will not build up the same level of reserves for future repairs and maintenance.

Access to benefits advice internally or externally is very important for resilience and stability, for both the residents and the charity. Most almshouse residents over State Pension Age with low incomes and savings are likely to be eligible to receive Housing Benefit to help pay their WMC and this can include most elements of any additional service charge. Residents with earnings, small occupational pensions or higher savings may not receive full Housing Benefit. Residents under pension age are also eligible for receive Housing Benefit but only if they live in supported or sheltered housing which provides care, support or supervision.

A successful claim for Pension Credit can provide extra money for people over State Pension age because it can be a passport to other entitlements, including reduced Council Tax. Pension Credit comes in two parts (Guarantee Credit and Savings Credit) and with Guarantee Credit, income and savings aren’t taken into account and WMC charges can be fully covered.