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The e-Learning Funding Guide

A guide to Planning and Funding e-Learning in Schools

At Microsoft, we foresee a world where all children will be using mobile, digital devices to enhance the learning process both at home and school: expanding their ability to acquire knowledge as they benefit from an environment of “Anytime Anywhere Learning”.

This vision is already a reality in a growing number of UK schools and, as new models of funding are adopted, we expect all schools will progress to this environment within the next five years.

In a Microsoft Anytime Anywhere Learning (AAL) world, every child will have access to their own laptop computer. They can use it at any time, involve their friends and family and share their newly acquired skills - all the while broadening their own learning environment.

However, achieving this vision has significant cost implications. A fresh approach to funding is needed that shares the burden of technology investments for schools across the wider community. To deliver this new approach we commissioned Arthur Andersen to develop an effective and sustainable funding solution for individual schools, groups of schools or LEAs. Based on a charitable trust, this solution is called the e-Learning Foundation.

The purpose of this guide is to show you how surprisingly straightforward it can be to set up and benefit from an e-Learning Foundation that helps you provide equity of access to ICT provision. Although it supports the principles of the Microsoft Anytime Anywhere Learning (AAL) programme, you are free to use this funding solution in many different ways to support e-Learning within your school.

I hope you find it of value and that you choose to join the growing number of schools reaping the benefits of e-Learning.

Neil Holloway

Managing Director, Microsoft Ltd.

Vice President, Microsoft EMEA.

Page

Chapter One:

The new world of e-Learning 4

Introduction 4

A new approach to funding 5

The e-Learning Foundation 5

The benefits of setting up an e-Learning Foundation 7

Suitability of the e-Learning Foundation across the UK 8

Steps to success 8

Chapter Two:

Evaluate your school’s funding requirements 9

Produce your Implementation Plan 9

Scope your funding approach 10

Chapter Three:

Establishing and managing your e-Learning Foundation 11

Select your trustees 11

Register you e-Learning Foundation 12

Prepare your budget 14

Calculate the cost 14

Secure funding 16

Finance options 18

Use the funds to acquire equipment and services 19

Ensure effective management and financial control 20

Funding for training 21

National or local government funding 21

Chapter Four:

Setting up a multiple school or LEA e-Learning Foundation 22

Multiple school e-Learning Foundations 22

LEA Facilitated e-Learning Foundations 22

Selecting trustees 23

Benefits of setting up the Foundation as a corporate charity 24

Chapter Five:

Tax and VAT information 25

Donations to charities 25

Gift Aid 25

Documentation requirements 29

Reclaiming tax on donations 29

Deed of Covenant 29

Payroll Giving 30

Payroll issues relating to provision of laptops to teachers 30

Taxation of your e-Learning Foundation 32

Value Added Tax (VAT) 32

Appendix 1 34

Examples of letters and forms 34

Appendix 2 40

A. Model gift aid declaration 40

B. Model deeds of covenant – Version ‘A’ 41

C. Model deeds of covenant – Version ‘B’ 42

D. Model deeds of covenant – Version ‘C’ 43

Glossary of terms 44

Summary of contact details 46

Legal Disclaimer 48

The new world of e-Learning

Introduction

e-Learning describes the way new information and communication technologies (ICT) are re-inventing education.

It supports Internet-enabled learning and sets out to create

an environment within which any school can achieve:

■ 1:1 access - a goal of 1:1 access to a portable computer for every teacher and student.

■ Equity - access to innovations in ICT which facilitate teaching and lifelong learning, irrespective of individual and community, financial and social circumstance.

■ Community partnerships - which establish and foster relationships between schools, parents and within the community that access best practice in education.

■ A connected learning community - linking schools, homes, individuals, workplaces and government into a collective commitment to lifelong, anytime anywhere teaching and learning environments.

■ Innovation - commitment to ICT based teaching and learning; offering an exciting range of opportunities for educators, learners and the connected community to use new skills and tools to prosper in an information society.

The e-Learning vision clearly has significant cost implications over and above the level of traditional funding. It is also important to recognise that local authority maintained schools cannot require the parents and carers of their students to make financial contributions, so innovative funding strategies are required.

This sounds idealistic. However, schools involved in the pilot of Microsoft’s Anytime Anywhere Learning (AAL) programme succeeded in finding ways to fund successful laptop schemes. It is by learning from their experiences that we are now able to propose the basis of a sustainable e-Learning funding solution.

A new approach to funding

Our recommended solution is based on a school, a group of schools or an LEA supporting its e-Learning programme by funding channelled through an educational charitable trust - the e-Learning Foundation.

The basic idea is that those parents and other individuals, institutions and companies who choose to help, can make voluntary donations into the Foundation. The Foundation in turn gifts the money raised to the school so it may purchase equipment and services to support its e-Learning programme.

The proposed arrangements include use of the new Gift Aid rules to gain tax relief on income for donations, and the ability to reclaim VAT on purchases made.

Using this approach, the whole community both contributes to and benefits from the increased use of portable technology and the resulting enhancement in community

ICT skills.

The e-Learning Foundation

Your e-Learning Foundation will be registered by the Charity Commission and is approved by the Inland Revenue to apply the funds entrusted to your trustees by parents, carers and others in a variety of situations:

■ A single school setting up its own e-Learning programme

■ A group of schools working together

■ All the schools supported by an LEA.

It allows the Foundation’s trustees to accommodate specific circumstances such as differences in families’ financial resources or varying support from local authorities, businesses and charitable organisations. The structure of the Foundation also enables trustees to allow and plan for the fact that an e-Learning environment in 2005 will be different from today, and that the focus of funding needs will by then have shifted.

However, regardless of circumstances, the basic framework of an e-Learning Foundation’s work is likely to be much the same:

■ The e-Learning Foundation will receive funds from other grant-making bodies, parents, carers, regeneration funds (eg SRB), NGfL, business donations, European funds, benefactors etc

■ The Foundation will provide the school/s or LEA with funds on terms that ensure that the charitable purposes of the Foundation and the expectations of donors are met

■ The school/s or LEA will use these funds against their approved Implementation

Plan for e-Learning.

e-Learning Foundation model

Contributions

Grants from other foundations

LEAs

Government funding eg SRB or NGfl

Parental covenants

Business donations

European Funds

Benefactors

School e-Learning Foundation

Provides funds to schools

School

School leases or purchases ICT equipment

e-Learning Environment

Curriculum Integration - ICT to enhance teaching and learning

Home - Connected teacher, connected student, connected parent

Learning Devices - Laptops

Network Infrastructure - Internet, wireless technology

Note: For assistance in calculating specific costs, please refer to the AAL Funding

Calculator provided on the AAL funding CD which accompanies this document. For a copy of this CD or to discuss funding issues, please contact the Microsoft Contact Centre on 0870 60 70 800 or email: uk-aal@

The benefits of setting up

an e-Learning Foundation

An e-Learning Foundation established as a charitable trust will provide a sustainable route to funding and equity of access to portable learning. Several benefits arise from having funds channeled to a school or schools via the Foundation.

They include:

■ Parents can use the Inland Revenue Gift Aid, and Payroll Giving arrangements when giving funds to the Foundation. This allows the income tax to be

claimed back

■ The Foundation can assist parents applying for specific and additional help, and make decisions on these matters with advice from the school

■ The Foundation may be seen more favourably than a school or LEA by certain grant making charities, businesses and government funding bodies

■ The Foundation may be better suited to raising funds from the local community and will enable tax-effective donations.

It should also be noted that parents and carers who purchase or lease their own equipment for students cannot secure the benefit of a public body VAT refund, and swill bear a VAT cost.

Suitability of the e-Learning

Foundation across the UK

The material outlined in this guide is primarily relevant to schools in the state sector as the constitutional arrangements, management and financial structures of schools outside this arena are too varied to define in a single strategy.

However, there are ways in which private schools and their students can benefit from charitable giving, in much the same ways as those set out in this guide. Representatives from private schools who wish to implement an AAL or e-Learning programme should seek specific tax and legal advice. This advice is available from Arthur Andersen who can be contacted through the AAL Call Centre: 0870 60 70 800.

Information provided is generally applicable for any school in any part of the United Kingdom. However, the arrangements for registration of charities with the Charity Commission do not apply; nor is the draft trust deed included with this guide suitable for use in Scotland or in Northern Ireland. For these areas, specific advice should be sought. Please refer to page 12 of this guide.

Steps to success

The following chapters will take you through the various stages required to establish your own e-Learning Foundation. These stages are relatively straightforward, may occur in parallel, and can be undertaken in a short period of time.

1 Agree an Implementation Plan which defines the objectives, actions and resource requirements associated with creating your e-Learning environment.

2 Define the scope of your Foundation by assessing the benefits of setting

up a Foundation

1.alone 2.with partner schools or 3.via your LEA.

4 Recruit trustees from within and outside your school community.

5 Complete the Trust Deed and other related forms found on the CD which accompanies this guide (see note on page 6) and return your application to the

Charity Commission.

6 Commence the funding process by producing a budget, securing the funding and establishing the criteria to release funds.

The recommendations in this guide are not by any means the only way of carrying forward a school e-Learning initiative. Each community with a school at its heart will approach the various issues in its own way; and professional advice should be taken on any particular issues that give rise to difficulty or concern.

Note: Should you require an additional copy of this guide please contact the AAL Call Centre on 0870 60 70 800.

Evaluate your school’s

funding requirements

The initial step in developing an e-Learning programme for your school is to evaluate your readiness. You need to assess the challenges you face and determine how best to meet them given the structure of your school and relationship you have with parents/carers and the wider community.

Produce your Implementation Plan

The Implementation Plan will form the basis from which your Foundation trustees will manage the funding process and work with the school/s involved. It needs to provide a roadmap for your e-Learning programme and associated funding approach, outlining your:

■ Vision and objectives

■ Deployment tactics, including equipment specifications

■ Funding strategies and acquisition processes

■ Service, support and security facilities

■ Training guidelines.

It also needs to include documented milestones by which progress can be measured objectively. It is only when everyone involved has agreed this Implementation Plan that you can seriously begin the funding process.

If you would like more details on how to develop an Implementation Plan, a template has been created for the Microsoft AAL programme and can be found in Chapter 4 of the AAL Guide to Getting Started - ‘Establishing a Plan, Timeline and Milestones’. The Guide is available by calling the AAL Call Centre on 0870 60 70 800 or can be downloaded online at uk/education/aal

Scope your funding approach

Your Implementation Plan should also detail the scope of your funding approach. Should you form a single school e-Learning Foundation, or broaden it to incorporate other schools? You could, for instance, carry your e-Learning Foundation across all the schools for which one LEA is responsible. Or even across all those schools for which a small number of LEAs are responsible. There are obvious benefits to this partnership approach. These include:

For improved economies of scale

■ Reductions in the administrative cost per item of purchase

■ Continuity of technology and its use throughout all levels of education

■ Reduction in cost of staff training

■ Improved proposition to corporate and commercial sponsors through

increased scale of technology delivery

■ Improved proposition to parents, carers and others.

It is important to note that the model is scalable. A school e-Learning Foundation can grow, in time, to incorporate an extended Implementation Plan over a wider community of schools.

So before setting up your e-Learning Foundation, consider the benefits of developing an e-Learning programme which involves several partners and stakeholders to mutual advantage.

Once you have scoped your approach to funding and developed your Implementation Plan, you will be ready to establish your e-Learning Foundation.

Establishing and managing

your e-Learning Foundation

This chapter will provide detailed information about the steps required to establish your own e-Learning Foundation. You may approach these steps in any order or in parallel, depending upon your circumstances.

Select your trustees

Trustees will have the important responsibility of ensuring that Foundation funds are channelled in accordance with the approved Trust Deed. They will be personally liable for the proper conduct of your e-Learning Foundation and are accountable to the Charity Commission.

Each foundation will require at least three trustees. However, in order to achieve a diversity of skills and viewpoints, we recommend five. Candidates should:

■ Be over the age of 18

■ Be selected for what they can contribute to the charity

■ Have a commitment to the charitable purpose of e-Learning

■ Be able and willing to give time to the efficient administration of the charity

and the fulfillment of its objects.

Where possible it is important to try and recruit trustees with relevant experience and skills. Above all else, trustees need to be able - and willing - to give time and be prepared to take an active part in the running of the charity.

Solicitors, chartered accountants, head teachers, school governors and local business people possess skills that can be valuable. Some of these should have children at the school or schools in question, and there should be a considered balance of the genders represented by the trustees. If the school has a material ethnic minority component in its student body this too should find expression amongst the trustees. It is the diversity and balance of skill sets represented by these people that will ensure the effective operation of your e-Learning Foundation.

Full guidance on the responsibilities of trustees can be found in the Charity Commission’s booklet “Responsibilities of Charity Trustees” (CC3) which can be ordered or viewed from the Charity Commission’s website at

charity-.uk

Register you e-Learning Foundation

Included on the CD which accompanies this guide (see note on page 6) is a model Trust Deed for establishment of an e-Learning Foundation. This is the document that needs to be completed and submitted to the Charity Commission.

This Trust Deed is based upon the standard Charity Commission’s form with the exception of the Objects, which have been specifically tailored for an e-Learning programme to ensure a streamlined process for registration. These Objects are based upon the five important principles of e-Learning mentioned previously.

In signing the Trust Deed the trustees confirm that they will:

■ Safeguard the money they receive for your Foundation and use it only and solely for the charitable purposes or Objects set out in the Deed

■ Commit to managing your trust in accordance with the rules provided in the Trust Deed and in accordance with charity and general law

■ Take at least the same care in looking after the affairs of the

e-Learning Foundation, as they would with their own.

To complete the form correctly you need to provide the

following information:

■ At the top of the Trust Deed enter the date that you are completing the Deed and the name of each trustee.

■ Clause 1 - the name of your e-Learning Foundation. You should not use the same or similar name as that of any existing charity. In practice and in the interest of maintaining future flexibility it is better to name your e-Learning Foundation after your town, district, parish or some other administrative entity rather than your individual school.

■ Clause 2.1 - the area covered by your proposed e-Learning Foundation. We would strongly advise that when noting the area you cover, you make it as wide as possible to give you scope to expand your programme at a later date. Changing the name is a relatively simple process. Changing the area is not. If you have any queries relating to this, please contact the Charity Commission on 0870 3330123.

■ Clause 4.1 - the length of office for trustees. It is wise to ensure that the first trustees are appointed for different lengths of initial periods in office. This will ensure that your Foundation always has trustees of experience.

You may wish to seek independent legal advice before completing your Declaration of Trust form.

In England and Wales, you will need to register your e-Learning Foundation with the Charity Commission by applying for a registration pack from the Commission. You’ll find the telephone numbers listed at the back of this guide. The pack contains a registration form (APP 1) and a trustees’ declaration (DEC 1), both of which should be completed and returned promptly along with the Trust Deed. Provided the Commission has no further and specific questions to ask, it should register the Charity within 15 days.

Upon registration, you will receive written confirmation of your e-Learning Foundation’s unique registration number, and your entry in the register. You will also receive a further pack of useful advisory materials.

Summary of process to register your e-Learning Foundation:

1 Phone the Charity Commission on 0870 3330123 to order a Registration Pack

2 Complete forms AAP 1 and DEC 1 from pack

3 Complete the Trust Deed for your e-Learning Foundation (on CD)

4 Present the Trust Deed to the local Stamp Office to determine whether stamping is required (under “Inland Revenue [Stamp Office]” in telephone directory). It is advisable to telephone the appropriate Stamp Office and ask what the procedure is before sending the Trust Deed

5 Send the completed forms to the closest Charity Commission office (see contact details at the back of this guide)

As noted earlier, the Charity Commission does not have any jurisdiction in Scotland or Northern Ireland, and the arrangements for equivalent registration are necessarily different. There are also differences in the way that Trust Deeds are written. At the time of writing this guide the constitutional and legal arrangements for establishing e-Learning Foundations in both Scotland and Northern Ireland were under review.

Please contact the AAL Call Centre for the latest position. It is important to note that aside from registration requirements, the other information outlined in this guide is applicable in both Northern Ireland and Scotland.

Note: If it is considered appropriate to set up a large e-Learning Foundation to support, for example, all the schools served by one or more LEAs, then establishing the Foundation as a company limited by guarantee (rather than via a Trust Deed) could prove advantageous. Similarly, if a Foundation grows to a considerable size, it may also be worthwhile to convert it into such a company. The prospective or actual trustees should take independent legal advice on this matter if they think that becoming a corporate charity may be beneficial. The issues and merits of corporate charities are outlined in Chapter 4 of this guide.

Prepare your budget

Set out below are some key considerations to be made when planning the finances of your e-Learning Foundation. They are not exhaustive and your trustees should apply their own collective expertise as well as considering advice from external bodies.

The budget needs to be based on your school’s e-Learning Implementation Plan and should:

■ Estimate the costs of all the elements of the plan month by month for the

entire budget period

■ Realistically and objectively estimate income from deeds of covenant, additional donations, governmental and other grants etc. on a month by month basis

■ Balance income with expenditure.

Note: It is very important not to be overly optimistic. Trustees are expected to behave as prudent business people and act responsibly with your Foundation’s funds. The budget must be approved unanimously by your trustees, so several drafts may be required. It should also be reviewed with your school governors and head-teacher in order to be sure that there will be sufficient funding for your school’s Implementation Plan to be achieved.

Circumstances will change, and ongoing budget modifications may be required; so your trustees need to monitor progress carefully, and promptly advise the school, group of schools or LEA of any projected shortfall or surplus.

For contingency purposes you should prepare a second budget that assumes expenditure will exceed estimates by a particular margin and income will similarly fall short of expectations. Any cash flow shortfalls should be considered carefully and your budget adapted to ensure that there is sufficient funding to support your school’s e-Learning Implementation Plan even in this worst case scenario.

Calculate the cost

A number of banks and finance companies are supporting the Microsoft AAL programme and can provide schools with the necessary expertise to make the modelling of different budgets a relatively straightforward exercise.

An AAL Funding Calculator, provided by one of these funding partners, has been included on the CD which accompanies this guide (see note on page 6). The Funding Calculator allows you to enter the unique set of variables that will affect your budget, including the number and cost of laptops, as well as contributions from parents and other sources as outlined in the diagram on page 6. Further details of the AAL funding partners are available from the AAL website at uk/education/aal

The example below shows two scenarios produced by the Funding Calculator. For simplicity the example assumes funding only from parental contributions. The value of the Funding Calculator is fully demonstrated when other sources of funding are introduced to further reduce the cost.

It is important to note this example is for indicative purposes only.

The cost of leases and laptops are, of course, subject to change and will vary according to specification and numbers purchased.

Example: To equip a year group of 180 pupils

■ laptop bundle cost - (including Microsoft Office, bag,

service and support) - £1000 (ex VAT)

■ cost of operating lease per month for 180 laptops - £5,607

Cost without e-Learning Foundation - The cost per laptop works out at £31.15 per month if funded either directly by the school, or by individual parents, without the existence of an e-Learning Foundation.

Cost with e-Learning Foundation - Scenarios 1 and 2 illustrate the reduced cost per month to cover the lease, if funded by voluntary parental covenant to an e-Learning Foundation.

In both cases:

■ The trustees of the e-Learning Foundation reclaim the tax on donations

■ Trustees make the funds from parental covenants available to the school.

Scenario 1

■ 180 parents covenant £25 per month (£6.25 per week)

■ A surplus of £153 per month is produced, above the cost of the lease, and is available to the trustees to provide further support for e-Learning in the school.

Scenario 2

■ 180 parents covenant £24 per month (£6 per week)

■ The school will need to find just £77 in total, per month, from other sources to cover the cost of the lease.

Secure funding

Funding can be obtained from a variety of groups, many of which can benefit from the tax advantages available by donating into your Foundation - see Chapter Five of this guide.

Sources of funds include:

■ Parental covenants

■ Business donations

■ Grants from other foundations

■ Government funding such as SRB or NGfL

■ European funding

■ Benefactors

■ LEAs.

Ensuring continuity of payments

It will be important to ensure that your e-Learning Foundation has a guaranteed flow of income, as opposed to promised “one-off” donations. Within the new Gift Aid arrangements, trustees of your Foundation are able to provide Deeds of Covenant for donors to sign which are legally binding and capable of exceeding three years. Your Foundation would be able to bring proceedings on these documents should the covenanted payments not be made.

Note: A parent who is not a tax payer can enter into a binding Deed of Covenant even though there will be no tax benefit for either the donor or your Foundation.

As explained in Chapter Five, Deeds of Covenant will now not operate as a separate tax efficient giving arrangement but will now form part of, operate in the same way as, and be subject to the same regulations as donations made under the new Gift Aid arrangements. Accordingly, discussions with the Inland Revenue will centre around the term “Gift Aid” rather than “Deed of Covenant”.

Refer to the CD for sample Deeds of Covenants for England and Wales, Scotland and Northern Ireland, and for further information on tax and VAT refer to Chapter Five.

Funding from parents It is necessary to ask for voluntary parental contributions to your e-Learning Foundation. The CD contains a draft letter from the school to parents explaining why voluntary contributions are sought, who should consider making a donation, what that donation might be and information concerning the respective tax positions. A similar letter from the Chair of the Trustees to parents is also featured on the CD. It needs to be made clear to parents that they will be contributing towards your e-Learning Foundation, not directly to the cost of their child’s individual laptop or other device. In order to get tax relief on donations, recover VAT, and avoid complaints that you are making parents pay for their children’s education (which is illegal), it is the school and not the parent that needs to lease or rent the computer. The parent can have no guarantee that their child will have the use of a laptop in return for their donation, although in practice, it ought to be the case.

Parents also need to be advised of the correct use of school laptops at home, and a letter to parents/carers from the school concerning this (subject to advice and direction from your school or your school’s computer lessor’s advisors and insurers) is included on the CD.

Experience with AAL Mentor Schools demonstrates that even in the most disadvantaged areas, parents should, (and are prepared to) make some contribution toward the purchase of laptops for use by children at their schools; and that, in doing so, involvement in their children’s school activities increases dramatically. Parents who contribute are also more likely to make sure their children use and care for their laptops.

Additional funding Aside from parental contributors

You may also need to seek additional funds from existing school fund-raising sources, or from local community and business groups.

Grants from other foundations

It is likely that other foundations may wish to make grants to your

e-Learning Foundation. Funderfinder is a software product, available on subscription that will help you identify those grant making trusts most likely to be of interest to you. A subscription comprising of a one-off charge of between £140 and £200, followed by a yearly update charge starting at £45 is required, however you may find that your local Councils of Voluntary Service (CVS) has a copy that you can look at.

Contact details are:

FunderFinder, 65 Raglan Road, Leeds LS2 9DZ Tel: 0113 243 3008

Details of local charitable trusts and activities can also be supplied by the National Association of Councils for Voluntary Service (NACVS), an umbrella organisation for local (CVS). The information they provide can be extremely valuable, because many trusts operate only for the benefit of specific geographical areas, which means there will be less competition for funds.

Contact details are:

NACVS, 3rd Floor, Arundel Court, 177 Arundel Street, Sheffield S1 2NU Tel: 0114 278 6636

Government Funding

There are many sources of funding from the government including:

The Standards Fund. - The NGfL (the National Grid for Learning) offers funding and purchasing arrangements for hardware (cabling, wireless links etc.) which support the implementation of ICT programmes like the AAL programme.

Note: The work of local e-Learning Foundations, as well as the voluntary contributions from parents/guardians and the local community must be additional and complementary to the work of the NGfL and other H.M.Treasury funded initiatives.

Local Training and Enterprise Councils

(will become Learning and Skills Councils).

Some schools have made successful bids for money to fund e-Learning from the Training and Enterprise Council (TEC) initiatives. The nature of these Councils is changing constantly, and each local Council has its own name. To find out which one is operating in your area contact the Business Link hotline on 0345 567765 and ask specifically for your local TEC.

Single Regeneration Budget.

If your school is in an area that is allocated SRB funding, this may be a useful resource for e-Learning.

Education Action Zones.

This is a Government initiative targeted at areas characterised by underachievement or disadvantage. The DfEE website has further information on this initiative at .uk/

European Funding

Obtaining funds from Europe can be complex, but it is worth pursuing as there is plenty of money available for those areas of the country which are seen as having relative deprivation. For more information on funding contact the European Commission.

Contact details are:

Jean Monnet House, 8 Storey’s Gate, London SW1P 3AT Tel: 020 79731992

Help (especially legal advice) may also be obtained by contacting The National Council for Voluntary Organisations (NCVO) or its Scottish equivalent SCVO. They produce a wide range of publications that you may find useful.

Contact details are:

NCVO - Regents Wharf, 8 All Saints Street, London N1 9RL

Tel: 020 7713 6161

SCVO - 18-19 Claremond Crescent, Edinburgh, EH7 4QD

Tel: 0131 556 3882

Finance options

You will need to explore alternative methods of financing the purchase of laptop computers, training or other requirements;

and bank loans or leasing arrangements should be considered.

Note: In general, governing bodies of schools cannot borrow from commercial sources, and local authorities are very much constrained in their ability to do so. Your e-Learning Foundation will be able to borrow funds provided that statutory and best practice guidelines are followed (which include satisfactory competitive tendering). You should not consider this route without first taking independent

professional advice.

An LEA or governing body of a school may well find the relative costs and benefits of leasing equipment preferable. There are also other potential advantages to leasing laptops, including the bundling of service, insurance, finance and redundant equipment disposal issues into a single competitively tendered contract.

If neither the governing body nor the LEA is prepared to assume the risk for the ongoing lease payments, then it may be necessary for the e-Learning Foundation to release funds only when there is sufficient money in hand to fund either the cash purchase or all the lease payments.

Contact details for finance and leasing partners of the AAL programme are available from the AAL web site at uk/education/aal

Use the funds to acquire equipment and services

Charitable funds must be applied for public benefit; therefore you need to take particular care to ensure you can demonstrate that the funds are held and dispersed in a manner that accords with the best standards of practice in publicly accountable institutions.

For example:

■ Your trustees should meet to approve all spending

■ Two trustees should be deputed to sign cheques

■ All the trustees should regularly supervise all the financial arrangements both on their own and in conjunction with their auditors

■ Any trustee who finds that they have personal or business interests that impinge on the business of your Foundation in any way, should immediately and fully declare their position to all the trustees and arrange matters so that there can be no allegation of any conflict of interest.

It is unlikely that your trustees will themselves be responsible for making purchases of equipment and services, beyond utilising the services of such external advisors as they consider are appropriate to enable them to better undertake their business and obligations.

Trustees should assure themselves that the resources they are making available to schools and LEAs are being wisely spent as directed; and that in particular (and where appropriate) contractors supply equipment and services on the basis of competitive tenders in accordance with local authority procedures. Your trustees should enter into a written agreement with your school governors or local authority to ensure that this is so.

Ensure effective management

and financial control

The trustees of your e-Learning Foundation will need to ensure that they do not donate money to the school except on the basis of a binding agreement from your school that states:

■ The funds will be spent as agreed with the Foundation

■ Relevant purchases will be in accordance with your agreed e-Learning Implementation Plan.

A draft agreement of this nature is included on the CD which accompanies this guide (see note on page 6).

In the case of an LEA, or a school purchasing on behalf of the LEA, there must be a formal competitive tender process that conforms to standard procurement practice. Your trustees will need to be prepared to monitor this to ensure that the best value has been achieved.

Other important issues that should be addressed include:

■ No one person should ever solely be responsible for placing orders, checking performance and making payments

■ Standing orders on procedures for competitive procurement should always be followed

■ All expenditure should be fully recorded and the vouchers retained

■ A full audit trail should be kept as a permanent record for all expenditure and all decision making

■ The advice of an auditor before a transaction is more valuable than an auditor’s subsequent advice on how the transaction should have been undertaken and recorded.

You also should consider the most appropriate ways of collecting a large number of monthly payments under Deeds of Covenant. Direct debits and standing orders from donors’ bank accounts, credit/charge cards and the Payroll Giving Scheme may all provide a solution. It may also be appropriate to accept regular cash payments via the school secretary, and payments direct to the Foundation’s bank account.

Full details on the accounting framework for charities can be found from the Charity Commission’s booklet “Charity Accounts” (CC51) which is available on the website charity-.uk

Note for trustees:

Trustees of your e-Learning Foundation should carefully examine support of any new product development, or experimental products or services that are unproven, as association with them may cause undue risk to the continuity of children’s education.

Funding for training

Staff training is an essential element in a successful e-Learning implementation. It is therefore appropriate that the trustees of your Foundation use part of their charitable funds to help pay for staff training, provided that they are sure all other sources of alternative funding have been exhausted. They should, however, expect to see matched funding from your school or LEA and they need to agree the proposed training plan. This should include a system by which teachers who have been trained share their knowledge with their peers.

For more information on training, refer to Chapter 13 of the AAL Getting Started Guide - ‘Professional Development Training and Integration’.

National or local government funding

Your e-Learning Foundation should not subsidise either national or local government funding. Your trustees should always satisfy themselves that your Foundation’s funds are being used to buy additional provision not available from the exchequer or the ratepayer.

Setting up a multiple school or LEA e-Learning Foundation

Multiple school e-Learning Foundations

This chapter outlines the number of distinct advantages in setting up an e-Learning Foundation for groups of schools or an entire LEA rather than for a single school. The framework for an e-Learning Foundation of this scale will remain the same, with the Foundation seeking and collecting contributions from parents and sponsors. The Foundation then provides funds to each school in the consortium on the basis of a commonly agreed Implementation Plan for the e-Learning programme as a whole, as well as on the basis of individual school plans.

In some communities several or groups of schools may choose to get together and form a multiple school e-Learning Foundation that meets the specific needs of schools in their community. This enables the pooling of ideas and resources along with potential economies of scale across fund-raising, management and procurement of equipment.

LEA Facilitated e-Learning Foundations

There are two potential ways that an LEA can be involved in the creation of

e-Learning Foundations: either 1) through establishment of an LEA-wide Foundation, or 2) through pro-active creation of several community based Foundations

within the LEA.

Establishment of a single e-Learning Foundation across an LEA (or several LEAs) offers particular advantages in areas where there is social and economic deprivation. This is because a larger Foundation may have

more success in:

■ Securing funding from European sources

■ Winning the confidence and financial commitment of local businesses

■ Attracting trustees of the highest calibre who can help the community to get the very best from the project.

A Foundation of this scale may be best established as a company limited by guarantee, and specific professional advice should be obtained on this issue.

An alternative approach might be for the LEA to encourage each locality’s schools to support the establishment of a Foundation focused on the e-Learning needs of their schools alone, for example a secondary school with its feeder primary schools. This may be the best way forward where there are pockets of acute deprivation in certain localities within the wider less disadvantaged community.

In this case an LEA supported collective procurement of leased laptops, will be extremely price competitive as a result of the VAT savings, bulk buying discounts and common use training initiatives. The actual provision of the computers would be timed to meet funding availability. This way it may then be possible to support laptop provision throughout the LEA - even in those localities that cannot offer much financial support of their own. Each local Foundation will also be able to capture local interest and enthusiasm and so maximise the availability of charitable funding

Whether either of these approaches is appropriate or some other method is better suited to your community’s needs and aspirations, the exercise will benefit from external professional input, particularly during the planning and pilot implementation stages. Arthur Andersen - who developed the funding solution outlined in this guide and who are familiar with all the issues - will be happy to be asked to tender for

such work.

Where either a multiple schools or LEA-wide approach is taken, it is still necessary for heads and governors to remain responsible for their own school’s performance. This is made possible by three layers of implementation planning:

■ An Implementation Plan for delivery of the entire e-Learning programme

across the group or LEA

■ Implementation plans for each of the sub-groups of schools

■ Individual Implementation Plans for each of the local schools.

Selecting trustees

For larger e-Learning Foundations, there will usually be a number of candidates for the role of trustee. It is particularly important that applicants are chosen for the skills, knowledge and diversity that they bring rather than for any other reason. Parents and others making donations to the Foundation will want to be certain that the Foundation is independent of the local authority (and any associated political agenda or bureaucracy). Therefore, less than 20 per cent of the trustees should be councilors, officials or associates of any of the local authorities involved in the venture.

Benefits of setting up the Foundation

as a corporate charity

e-Learning Foundations with a remit of all the schools served by one or more LEAs will need to deal with very considerable flows of cash and take important resource allocation decisions. As has already been mentioned, it may be helpful to set up the Foundation as a company limited by guarantee, with the trustees being appointed directors of the company and the schools within the project having a membership role. This will enable each school’s governing body to input into the Foundation’s decision-making process without any one school having an executive or

predominant role.

Benefits of a corporate charity

■ Easier entry into commercial contracts with, for example, an external provider of book-keeping, banking or administration services

■ The business world’s familiarity with the way in which companies are organised and accountable, and the means by which directors’ liabilities are controlled. This often means that there are more parties prepared to donate money and resources to a corporate charity.

Issues involved with a corporate charity

■ Greater administrative costs

■ Increased need for professional advice concerning tax, law and finance

■ The relative formality of the organisation which may intimidate

some people.

A draft Memorandum and Articles of Association - which largely follows a Charity Commission standard draft - is available from Arthur Andersen through the AAL Call Centre on 0870 60 70 800, along with specific information for LEAs.

Tax and VAT information

Donations to charities

This chapter provides general information on the taxation implications of operating an e-Learning Foundation. The comments are based on current law and tax rates at the time of writing. These are subject to change and this guide may not be updated to take account of these changes. Therefore it is advisable to seek additional independent advice

To encourage individuals and corporations to make donations to UK charities, donations made under certain arrangements qualify for tax relief. Up to April 2000, two arrangements qualified for this relief - Gift Aid and Deed of Covenant. However, the March 2000 Budget announced that, as from April 2000, all such qualifying donations were to be grouped under one umbrella: Gift Aid. The new rules applying to Gift Aid (which may be subject to change) are set out in detail in the following sections.

Broadly, donations will qualify donors for tax relief at their marginal rate of tax (the highest rate of tax to which their income is subject). For higher rate taxpayers and companies, this will be achieved by including the amount of the donation in the relevant section of their tax returns. For basic and lower rate taxpayers, tax relief will be gained at the time of donation and no further action is necessary.

In addition to the above arrangements, individual employees may also gain tax relief for donations made under the Payroll Giving arrangements. Details of these arrangements are outlined on page 27.

Gift Aid

Gift Aid is a mechanism to allow parents, individuals, benefactors or companies to obtain tax relief for donations they make to charities.

Gift Aid payments by parents or other individuals

Parents or other individuals willing to contribute to your e-Learning Foundation and wishing to claim tax relief under Gift Aid should make a payment to the Foundation (in cash, cheque, bank transfer or by credit card). There are no limits on the payments that can be made and they can be regular or one-off payments. Parents will need to provide the Foundation with a Gift Aid Declaration.

Tax relief for the parent or other individual

The Inland Revenue treats this donation as if it were an amount from which basic rate income tax has already been deducted. Tax relief is then given by deduction against taxable income and gains made by the individual. To obtain this relief the donor must be liable to pay a total amount of income tax and capital gains for the tax year, at least equal to the tax treated as deducted on the donation.

The tax benefit is delivered by your Foundation being able to claim back the amount of tax deemed to have been ‘deducted’ directly from the Inland Revenue - (see ‘Reclaiming tax on donations’ on page 26). The result is, that for every pound donated by a taxpayer an additional 28 pence can be recovered by your Foundation from the Inland Revenue. So a £10 donation is worth £12.80 to the Foundation and a £50 donation is worth £64.

Donors who pay tax at the higher rate are able to benefit from full higher rate relief and therefore will be able to claim a measure of additional relief as illustrated below.

Example of relief for a lower or basic rate tax payer

A donation of £100 is made to your Foundation under Gift Aid during the fiscal year 2000-2001. This is the net amount paid by the donor but the Inland Revenue will treat it as a gross amount from which basic rate income tax has been deducted. The Foundation can then claim back from the Inland Revenue the basic rate tax treated as ‘deducted’ on the donation. The basic rate of tax is 22% for fiscal year 2000-2001.

Net donation = £100

Tax treated as deducted by the Inland Revenue and recoverable by Foundation = £28 (22% of the gross donation)

Gross donation = £128

Thus, the individual pays £100 but your Foundation receives an additional £28 from the Inland Revenue, meaning that the donation is actually worth £128 to your Foundation.

Donors who pay tax at the lower or basic rate do not have to do anything further as tax relief will have been received at their marginal rate.

The net cost is therefore £100.

Example of relief for a higher rate tax payer

Using the same example, assume that the donor is a higher rate tax payer. The donor will enter the donation made in the year onto their income tax return for that period and will receive relief at the full 40%.

On a £100 donation, basic rate income tax of £28 has already been “deducted” and reclaimed by the charity making the gross donation £128 as detailed above thus effecting relief at basic rate tax. The donor is entitled to relief at 40% ie £51 relief in total (40% of the gross donation of £128).

To obtain this, an additional £23 (£51 - £28) of the gross donation will be reclaimed as additional tax relief in the donor’s tax return. So, for a higher rate taxpayer, a donation of £100 paid to the charity will only really cost the donor £77 (£100 - £23) and will be worth £128 (£100 received from the donor and £28 recovered from the Inland Revenue) to the charity.

Donations by Companies

Companies can obtain tax relief for all donations (including covenanted donations) made on or after 1 April 2000 without the need to physically deduct income tax from Gift Aid donations to the Foundations. This includes donations under a Deed of Covenant, which fall within the new Gift Aid arrangements. Deeds of Covenant explained in more detail in the next section, are donations ‘covenanted’ to a UK charity under a deed signed by the donor. The donor promises to pay over to the charity a specified sum annually for at least three years.

Unlike individuals, companies will not be required to provide your Foundation with a Gift Aid Declaration. They should simply pay over the full donation and claim tax relief when calculating their profits for corporation tax purposes.

Gift Aid Declaration

From April 2000, donors can provide a declaration:

■ In advance of their donation

■ At the time of their donation

■ After their donation (subject to time limits within which the charity can reclaim tax -normally within six years of the date of the donation).

The declaration can be made:

■ To cover a single donation

■ To cover any number of donations

■ In writing (by post, fax or via the Internet)

■ By word of mouth.

A sample Gift Aid declaration, which can be adapted if required, is included on the CD and printed on page 31. There is no requirement for the Inland Revenue to approve declarations.

The Gift Aid declaration must contain the following information:

■ The donor’s name and address

■ Your Foundation’s name or acronym

■ A description of the donations to which the declaration relates

■ A declaration that the donations are to be treated as

Gift Aid donations.

Declarations given in writing must also contain:

■ A note explaining that the donor will pay, or has already paid, an amount of income tax or capital gains tax at least equal to the tax treated as deducted from the donations (see note 2, of the sample declaration supplied on the CD)

■ The date of the declaration

■ The donor’s signature (except where given electronically).

Where your Foundation receives oral declarations from donors,

it must then send the donor a written record of the declaration showing:

■ All details given by the donor in the oral declaration

■ A note explaining that the donor will pay, or has already paid over an amount of income tax or capital gains tax equal to the tax deducted from the donations

■ A note explaining the donor’s entitlement to cancel the

declaration retrospectively

■ The date on which the donor gave the declaration

■ The date on which the written record was sent to the donor.

An oral declaration will only be effective where a written record has been sent

to the donor.

Cancellation of a Declaration

Donors are entitled to cancel their declaration at any time. If a donor cancels an oral declaration within 30 days after the written record has been sent, the cancellation will have retrospective effect.

Where a donor cancels a written declaration or an oral declaration more than 30 days after the written record has been sent, the cancellation will only have effect on donations made on or after the date of notification of cancellation or a later date if specified.

The absence of a Gift Aid Declaration, or the cancellation of a declaration in respect of payments made under a Deed of Covenant, will not affect the donor’s obligation to make the payments due under the Deed, but the beneficial tax treatment will not then apply to the payments.

Documentation requirements

It is essential that your e-Learning Foundation keeps sufficient documentation to identify individual donations and donors, and show that all other conditions for tax relief claimed have been satisfied.

If you are operating as a charitable trust the timescale for retaining these records is the later of:

■ 31 January following the first anniversary of the end of the tax year to which the tax reclaim relates

■ One year after the tax reclaim is made (rounded to the end of the next quarter)

■ The date that the Inland Revenue completes any audit it has commenced.

If your Foundation is a company, records must be kept until six years after the end of the accounting period to which the tax reclaim relates.

Guidance on records requested by the Inland Revenue in the event of an audit are outlined in the Inland Revenue Code of Practice (Code of Practice 5) entitled “Inspection of Charities’ Records” obtainable from the Charity Commission.

Reclaiming tax on donations

For donations under the old Gift Aid or Deed of Covenant schemes, charities should continue to use form R68 to reclaim tax. Further guidance for donors and charities on the old Gift Aid rules can be found in the Inland Revenue leaflet IR113 “Gift Aid”, available from the Financial Intermediaries and Claims Office (FICO) of the Inland Revenue and local Inland Revenue offices. For Gift Aid donations made on or after April 2000, a new form and schedules are being produced and will be available from FICO. These can be ordered from the FICO order line (0151 472 6293/6294). Guidelines for charities on the amendments introduced in the budget can be found on the Inland Revenue website at: .uk/news/budget.htm

under “Getting Britain Giving- Guidance Notes for Charities”.

Deed of Covenant

As of April 2000, donations made by individuals and companies to an e-Learning Foundation will all fall within the Gift Aid arrangements outlined in the previous section. It will still be possible for your Foundation to provide Deeds of Covenant for donors to sign, and as explained below, it will be beneficial for you to do so, but these will now operate as part of Gift Aid and not as a separate tax efficient giving arrangement. Accordingly discussions with the Inland Revenue will centre around the term “Gift Aid” rather than “Deed of Covenant”.

A Deed of Covenant is a legally binding agreement under which the donor covenants to pay over agreed sums of money to a charity over a period of time. The charity is able to sue on the strength of these documents should the covenanted payments not be made. Encouraging donors to enter into a Deed of Covenant will ensure your Foundation has a guaranteed flow of income from donations for a three year period as opposed to promised “one-off” donations made under Gift Aid.

All donations made under Deeds of Covenant after 5 April 2000 also need to be covered by a Gift Aid declaration to retain tax deductibility. You will need to ensure both documents are completed by donors according to the guidelines set out in the examples on the CD.

Payments made under Deeds of Covenant will operate in the same way, and be subject to the same regulations as donations made under Gift Aid outlined above.

Sample Deeds of Covenant for donations made in England, Wales, Scotland and Northern Ireland are included on the CD and printed on page 41.

Payroll Giving

Payroll Giving enables employees to authorise their employers to deduct donations to the e-Learning Foundation from their pay before deducting PAYE income tax. In this way they automatically receive tax relief at their highest rate. There is no upper limit on the amount of donations that can be made under these arrangements.

Donations are deducted from gross pay and paid over to the Payroll Giving agencies by the employer. Some employers themselves will act as agencies. Employees can find out whether their employer offers Payroll Giving from their payroll department.

In addition, the Government will provide a 10% supplement on all donations made under the Payroll Giving arrangements between 6 April 2000 and 5 April 2003. These supplements will be passed on to the charities by Payroll Giving agencies along with the donations.

Further details for both employees and their employers can be found on

the Inland Revenue website:

.uk/payrollgiving/index.htm

Payroll issues relating to provision of laptops to teachers

A fundamental part of the success of your e-Learning programme will be the provision of laptops to class teachers. It is important to realise that this may have PAYE implications in the form of a benefit-in-kind to those teachers involved.

From 6 April 1999 schools are able to provide computers to their teachers or to a member of the teacher’s family or household for private use without a taxable benefit arising, providing that the following conditions are satisfied:

■ The school must retain ownership of the computer equipment

■ The exemption covers the first £500 of the annual benefit to the teacher.

The annual benefit is calculated as 20% of the asset’s market value plus any related expenses which the school meets

■ Therefore, computer equipment with a market value of up to £2,500 (including related expenses) can be made available for the teacher’s private use as the tax charge on the provision would be £2,500 at 20% = £500. Where the school rents the equipment the rental, if higher, will be substituted for the annual 20% annual value charge. Note that where the annual benefit exceeds £500 only the excess will be chargeable.

■ The legislation defines “computer equipment” to include printers, scanners, modems, discs and other peripheral devices designed to be used by being connected to or inserted in a computer. It excludes telephones. In this respect, it appears that the market value of software provided with a computer would be included in the £2,500 limit.

■ The provision of computer equipment must be made available to all staff on the same terms and should not be confined to certain categories of staff. In these circumstances, a benefit would continue to arise.

Where the annual benefit to the teacher exceeds £500 the excess must be reported on the individual’s form P11D at section L in box 1.22. Your employees must also declare these details in box 1.22 on their self-assessment tax return.

Employers must complete form P11D, providing details of benefits received in each tax year ended 5 April, for each director and all employees earning at a rate of £8,500 or more. This form is to be submitted to the Inland Revenue by 6 July following the end of the tax year. The information contained on the form P11D should also be provided to the employee by this date in order for the employee to complete his or her self-assessment tax return.

From 6 April 2000, a Class 1A National Insurance charge (payable by employers only) arises on the provision of computers supplied for private use where the annual value and running expenses exceeds £500. The amount in excess of £500 is liable to Class 1A National Insurance (at 12.2% for 2000/2001) payable by 19 July following the tax year in which a benefit arises.

Taxation of your e-Learning Foundation

Where your e-Learning Foundation is established by Trust Deed as a charitable body, it should be exempt from paying tax on income received on the basis that the funds are being used ‘for charitable purposes’. However the Inland Revenue has set some restrictions on the activities a charity may carry out if it wants to receive this exemption on all its income. For example, profits from a trading activity carried out to raise funds (such as selling Christmas cards) may be subject to tax if they are above a certain limit set down by the Inland Revenue or not exempted by the Inland Revenue.

If your Foundation is likely to engage in any significant trading or fund-raising activities, you should therefore consider carrying these out in a separate trading subsidiary company of the Foundation. In this way, it should be possible to shelter the profits from tax by donating them under Gift Aid to your Foundation. If this may be applicable to you, you should seek professional tax advice.

Similarly, if your Foundation is established as a company limited by guarantee, the tax issues are more complex and you should seek further guidance.

Value Added Tax (VAT)

If your school is funded by a local authority, you will be treated as part and parcel of that authority for VAT purposes and will be able to benefit from a special refund scheme for public bodies. As such the charitable approach to funding set out in this guide enables you to reclaim VAT providing the following conditions are met. Note that for specific details you should refer to your local authority finance team.

It is important that equipment can be seen to be directly supplied to the authority. This is usually demonstrated by making sure that the authority:

■ Places the order

■ Receives the supply

■ Makes payment from its own funds or donated funds

■ Receives a tax invoice addressed to it

■ If invoices are made out in the name of your own school (HM Customs & Excise recognises that this is not unusual) you have agreed with the finance people within your authority to make sure that the arrangements necessary to reclaim the VAT have been made.

HM Customs & Excise also accept that purchases made from funds donated for the purposes of your e-Learning programme fall within the refund scheme, provided that the rules about placing orders, tax invoices and payments set out above are

followed and:

■ Ownership is retained and the equipment is used for the authority’s statutory educational purposes

■ Records are kept to enable both the purchase and its purpose to be

easily identified

■ Donations made by parents do not particularly benefit the donor (such as private use, discount on later purchase etc.) Provided the private use of that equipment is open to any student, regardless of whether or not their parents make a donation, HM Customs & Excise would not regard the donation as consideration for the incidental private use of such equipment.

Reclaiming tax on equipment supplied to teachers

It is envisaged that your local authority would be able to reclaim the VAT incurred on purchasing equipment for teachers. However, should your teachers be required to make some contribution towards the cost of supplying the equipment, it would then be necessary for the LEA to account for VAT on the payments received.

Your own advisors may have proposals other than those set out in this funding guide for securing the best possible outcome for VAT. You may also prefer to seek specific assurance from HM Customs & Excise concerning the details of refund arrangements. In both cases, you should arrange to involve relevant members of your local authority finance team at an early stage.

Schools and colleges that are not local authority maintained cannot easily claim the benefit of the public body refund arrangements. It is likely that they will therefore be unable to reclaim any VAT paid for purchasing the equipment. It may be possible that other arrangements can be made, subject to suitable advice.

Note: Parents and carers who purchase or lease their own equipment for

students cannot secure the benefit of a public body VAT refund and so will

bear a VAT cost.

Appendix 1

All the items printed on the following pages are also contained on the CD with this guide, allowing you to tailor and adjust to your specific circumstances.

Examples of letters and forms

A Letter from school to parents

Dear Parent/Carer

e-Learning

As you will know, our school is committed to giving every [child] [student] the best possible access to the finest in Information and Communications Technology (ICT). There is now an opportunity for us all to work together to enable the school to make available a laptop computer for (every child in the school) (specific group of students). This will enable us all to carry forward our students’ education on a basis that completely integrates information technology into all aspects of what we do together.

Unfortunately, our school’s financial resources are not enough on their own to enable us to meet the goal of one laptop per pupil. As a school, we are not allowed to require any parent to make a financial contribution towards the costs of their children’s education, and nor would we wish to do so. The school can however request contributions towards the cost on the basis that those contributions are completely voluntary. This letter is a request that you help the school in this way.

We propose to carry forward our funding programme very much along the lines of a funding guide prepared in conjunction with Arthur Andersen, and made available as part of Microsoft’s Anytime Anywhere Learning (AAL) programme. It is envisaged that there will be a charity established called the (name) e-Learning Foundation. Parents will be asked to covenant lump sums and regular monthly donations to this charity. The charity will use your commitments to in turn commit its donated funds to the school so that we can (lease) (buy) laptops and other equipment and services.

The school will be buying or leasing the equipment as part of the local education authority and as such will look to claim a refund of the VAT element of the purchase cost. The charity will seek from the Inland Revenue a tax recovery under the terms of the Gift Aid scheme. We believe that what we propose is just about the cheapest way of acquiring laptops for the school on the basis of voluntary contributions from parents and others.

(You may wish to insert a paragraph concerning meeting to discuss proposal).

Our present calculations suggest that if all those parents that can do so, make a monthly contribution of just (£ ) this will be sufficient, together with other funding, to enable the goal of one laptop per pupil. You will, of course, want to be sure that your donations are put to the best possible use in carrying forward the school’s ICT strategy and in helping every student towards the best educational outcome. We have attached to this letter a note, which sets out an outline of our plans.

Yours sincerely

School representative

B. Letter to a parent/carer from the school concerning

the use of school laptops at home

Dear Parent/Carer

Use of school laptops at home

As you may know your child will shortly be asked to do homework using one of the school’s laptops for the first time. This will mean that the school’s laptop will be brought home for this purpose. I am writing to you to ask you to confirm that you have no objection to this and that you are prepared to agree to some simple guidelines and rules about looking after and using the school’s equipment. If you do not feel able to agree then I am sorry but your child will not be able to use the school’s laptops other than on school premises.

Please read carefully the guidelines and rules set out below and, if you are willing to agree to abide by them, please sign and date the copy of this letter and return

it to me.

If any problem arises at any time about this or you wish no longer to be bound by what you have agreed please get in touch with me immediately.

Rules and guidelines: use of school laptops at home

1 Parents and other carers will ensure that the laptop is available for the school’s educational purposes in preference to other uses at all times.

2 Use of the laptop by other family members for other educational purposes is permitted so long as it is accepted that such use is at the parent/carer’s own risk.

3 The school will not set homework using the laptop that requires that a parent or carer incur any cost. Any cost incurred in the use of the laptop will not be met by the school.

4 Any attempt to sell the laptop or the use of it or deprive the school of access to it or make it not fully useful for the school’s purposes will be treated as a very serious matter and in appropriate cases the police will be informed.

5 Parents and carers will do their best to make sure that the laptop is kept safe from malicious damage, harm and loss and will complete a report of any incident of loss or damage promptly.

6 Any parent/carer or other family member wishing to be allowed to use a school laptop to support their lifelong learning towards a formal qualification will first

contact ( ).

I, the parent/carer of .......................... understand and agree to abide by the rules and guidelines set out above. I have no objection to what is proposed in this letter.

Name

Address

Phone number

E-mail

Date

School representative

C. Letter from trustees to parents

Dear Parent/Carer/Friend of ( ) School

Payments under Deed of Covenant to e-Learning Foundation

I am writing to you as Chair of the trustees of the (name) e-Learning Foundation. The Foundation is a charity registered with the Charity Commission number XXXXX and our purpose is to support and further ( ) school’s e-Learning programme. As you know, parents and carers of children attending the school - and others that are interested in supporting the school’s work - are being asked to make voluntary contributions to support the work of our charity. We will seek to ensure these funds are spent on helping the school deliver on its agreed information, communications and learning technology programme, including the provision of laptops for school purposes.

I am writing to ask you to commit to making regular voluntary donations in support of our work. As you know, the school head and governors have suggested that anyone choosing to make a donation should consider a figure of £( ) per month or £( ) per week as a benchmark against which to measure the contribution that they are prepared to make, bearing in mind their relative income.

If you are willing to make voluntary support available, as are many other parents and friends of the school, please complete and return to me the attached Deed of Covenant confirming your commitment. It is important that you should recognise that although entering into a Deed of Covenant in this way is an entirely voluntary matter, signing the Deed commits you to make the payments set out in the Deed. (Please also fill in and return to me the attached direct debit if you would rather make regular payments automatically).

If you pay income tax, then you should also complete and return to me the attached declaration. This declaration will enable the charity to benefit from basic rate tax relief given to you and, if you are a higher rate taxpayer, it will also enable you to obtain additional benefit. If you are a higher rate taxpayer for the tax year ending on 5th April 2001 for example, then for every £100.00 of Gift Aid covenanted donation that you make, you will receive tax relief of £23.00 and we will be able to recover £28.00 from the Inland Revenue. Thus each £100.00 donated by you, will have cost you £77.00 and will benefit the charity to the extent of £128.00. For those paying tax at other than the higher rate, the charity will benefit from a total income of £128.00 for every £100.00 that you donate.

If you have any doubt or difficulty concerning what is being requested of you or you wish to make a single donation or offer funds on some other basis, please do not hesitate to get in touch with (me)( ).

Yours sincerely

Chair of Trustees

D. Letter to agree transfer of funds

Dear Governors and Head of ( ) School

Your School’s e-Learning programme

This letter sets out the terms on which trustees of the (name) e-Learning Foundation (a charity registered with the Charity Commission number xxxx) will make funds available to further our charitable objects and to enable your school’s e-Learning plan.

1 We will pay to you or to your order amounts in respect of the equipment and services set out in the schedule to this letter. On receipt of copies of (VAT invoices)(confirmed orders) for the goods and services which confirm that the purchases (have been)(will be) made by the local education authority or by you as agents of them.

2 We understand that the said equipment and services will be used only to further your school’s e-Learning Implementation Plan in a way that will be a furtherance of our charitable objects and you agree that if they are used for some other purpose, then you will refund to us on demand the relevant payments that we have made.

3 Our commitment to make these payments is conditional upon the trustees having funds within the trust sufficient to meet the payments at the time the trustees receive the request for payment. Trustees will, so far as is possible, reserve funds to meet these commitments and will not use any funds within the assets of the trust for any other purpose except to the extent that such funds exceed the full extent of all our intended payments to you. Nothing in this letter should be taken to mean that the trustees have in any sense guaranteed that funds offered by this letter will certainly be available. Trustees will keep you fully informed of what funds are and will be available to them on a regular basis and will seek to discuss with you how any potential shortfall should best be addressed.

4 Trustees understand that the local authority will be able to procure a refund of the VAT in respect of the relevant invoices and for this reason, the trustees do not propose to make any payments in respect

of VAT. If this gives rise to any particular difficulty, please get in touch

with me so that the trustees can consider the matter further. If you are prepared to agree to what is proposed in this letter please confirm that this is so to me in writing.

Yours sincerely

c.c. ( ) Local Education Authority

Trustees of ( ) e-Learning Foundation

Note: An assumption underlying this letter in this form is that the trustees of the e-Learning Foundation will not want to commit themselves to make any payments at any point before they actually have the money in hand from which to make the payments. It is also assumed that they will wish to have sight of the actual invoice (or possibly order) for purchase before releasing funds in order to be confident that money donated by them is actually being spent as they wish. Trustees should consider taking legal advice concerning their responsibilities and the extent to which they can offer any greater commitment than that set out in this draft letter. School governors and possibly the local education authority will also wish to consider carefully and in the light of binding commitments that the trustees have that donations and other funds will be received by them before committing to significant expenditure in the expectation of financial support from the Foundation.

E. Schools agreement letter

Dear Governors and Head of ( ) School

Your School’s e-Learning programme

This letter sets out the terms on which trustees of the (name) e-Learning Foundation will make funds available to further our charitable objects and to enable your school’s e-Learning Implementation plan.

1 We will pay to you or to your order amounts in respect of the goods and services set out in the schedule to this letter. On receipt of copies of (VAT invoices)(confirmed orders) for the equipment and services, which confirm that, the purchases (have been)(will be) made by the local education authority or by you as agents of them.

2 We understand that the said equipment and services will be used only to further your school’s e-Learning Implementation Plan in a way that will be a furtherance of our charitable objects. If you agree that if they are used for some other purpose, then you will refund to us on demand the relevant payments that we have made.

3 Our commitment to make these payments is conditional upon the trustees having funds within the trust sufficient to meet the payments at the time the trustees receive the request for payment. Trustees will, so far as is possible, reserve funds to meet these commitments and will not, for example, use any funds within the assets of the trust for any other purpose except to the extent that such funds exceed the full extent of all our intended payments to you. Nothing in this letter should be taken to mean that the trustees have in any sense guaranteed that funds offered by this letter will certainly be available. Trustees will keep you fully informed of what funds are and will be available to them on a regular basis and will seek to discuss with you how any potential shortfall should best be addressed.

4 Trustees understand that the local authority will be able to procure a refund of the VAT in respect of the relevant invoices and for this reason, the trustees do not propose to make any payments in respect of VAT. If this gives rise to any particular difficulty, please get in touch with me so that the trustees can consider the matter further.

If you are prepared to agree to what is proposed in this letter please confirm that this is so to me in writing.

Yours sincerely

c.c. ( ) Local Education Authority

Trustees of ( ) e-Learning Foundation

Appendix 2

A. Model gift aid declaration

Gift Aid Declaration

Name of Charity

Details of donor

Title

Forename(s)

Surname

Address

Post Code

I want the charity to treat

■ The enclosed donation of £

■ The donation(s) of £ which I made on

■ All donations I make from the date of this declaration until I notify you otherwise

■ All donations I have made since 6 April 2000, and all donations I make from the date of this declaration until I notify you otherwise

as Gift Aid donations.

Delete as appropriate

Signature

Date

B. Model deeds of covenant – Version ‘A’

Deed of Covenant

(Form of covenant by an individual to a charity for use in England Wales from 31 July 1990)

Notes to the trustees of the e-Learning Foundation “the Charity”

(a charity registered with the Charity Commission no. XXX)

I promise to pay you the Charity for years, or until I die if earlier, such

a sum as after deduction of income tax at the basic rate amounts to 1

£ 2

each (week) (month) (quarter) (year) 3

From (the date shown below) 4

I understand that my promise to make these payments is a binding commitment that I cannot end without the agreement of the Charity. I agree to make a gift aid declaration in favour of the Charity in respect of all the payments under this deed if requested by the Charity to do so and to not cancel the declaration whilst the deed has effect.

Signed and delivered as a deed 5

Date

Full Name

Address

Witnessed by: 6

Signed

Full Name

Address

C. Model deeds of covenant – Version ‘B’

Deed Of Covenant

(Form of covenant by an individual to a charity for use in Scotland)

Notes To the trustees of the e-Learning Foundation “the Charity”.

(a charity registered with the Charity Commission no. XXX) I promise to pay you the Charity for years, or until I die if earlier, such a sum as after deduction of income tax at the basic rate

amounts to

each

(week) 1

(month) 2

(quarter) 3

(year) From (the date shown below) 4

I understand that my promise to make these payments is a binding commitment that I cannot end without the agreement of the Charity. I agree to make a gift aid declaration in favour of the Charity in respect of all the payments under this deed if requested by the Charity to do so and to not cancel the declaration whilst the deed has effect.

Signed 5

Date

Full Name

Address

Witnessed by:

Signed 6

Full Name

Address

D. Model deeds of covenant – Version ‘C’

Deed Of Covenant

(Form of Covenant by an individual to a charity for use in Northern Ireland)

Notes To the trustees of e-Learning Foundation “the Charity”.

(a charity registered with the Charity Commission no. XXX) I promise to pay you the Charity for years, or until I die if earlier, such a sum as after deduction of income tax at the basic rate amounts to

each

(week) 1

(month) 2

(quarter) 3

(year) From (the date shown below) 4

I understand that my promise to make these payments is a binding commitment that I cannot end without the agreement of the Charity. I agree to make a gift aid declaration in favour of the Charity in respect of all the payments under this deed if requested by the Charity to do so and to not cancel the declaration whilst the deed has effect.

Signed, sealed and delivered 5

Date

Full Name

Address

Witnessed by: 6

Signed

Full Name

Address

Glossary of terms

e-Learning

e-Learning is a term like e-Commerce and e-Government that is now becoming part of a new vocabulary brought about through the emergence of the Internet.

e-Learning describes the way new information and communication technologies (ICT) are set to re-invent education and learning in a digital world. In short it means Internet enabled learning: an exciting range of opportunities for educators and learners alike to use new skills and tools to prosper in an information society. Words and phrases like equity of access, wireless connectivity, personal learning tools, innovation by teachers and a culture of lifelong learning are often used in discussions.

Anytime Anywhere Learning (AAL)

Microsoft Anytime Anywhere Learning (AAL) represents a key element of Microsoft’s view of e-Learning. It is a laptop programme that emphasises the principle of 1:1 access and sets out to create the environment within which educators can build the world of the connected teacher, pupil and citizen.

Following the initial success of a pilot programme, AAL is now being introduced by a growing number of schools and several local authorities, who have all recognised it as the way forward. Full details of the AAL programme can be found on the AAL website at uk/education/aal

AAL Mentor Schools

As part of the wider development of Microsoft’s AAL programme in the UK ,12 of the original AAL pilot schools were invited to take on the role of Mentor School and provide practical support and advice to the growing number of participating schools in the UK.

They are the first in a national network of leading edge practitioners that will cover all regions of the UK. Case studies of the Mentor Schools can also be found on the AAL web site at uk/education/aal.

Guide To Getting Started

This guide provides schools with a clear pathway to implementing an AAL programme. It draws extensively on the experience of the AAL Mentor Schools and is a collection of ideas, models, case studies and issues for prospective AAL schools to consider. It is part of the AAL Action Pack that accompanies this Guide and can be ordered by calling the AAL Call Centre on 0870 60 70 800. The Guide to Getting Started can also be downloaded from the AAL website at uk/education/aal.

Arthur Andersen

Arthur Andersen is a professional services organisation. Arthur Andersen’s vision is to be the partner for success in the new economy. The firm helps clients find new ways to create, manage and measure value in the rapidly changing global economy. Arthur Andersen has world-class skills in tax, consulting, business advisory services and corporate finance with more than 77,000 people in over 80 countries. Legal advice is provided through the member firms of Andersen Legal, the global legal services network associated with Andersen worldwide S.C.

Charity Commission

The Charity Commission is the UK government department that exists to give the public confidence in the integrity of charities in England and Wales. The Commission both supports and supervises charities. It does not make grants either to charities or individual people.

The Inland Revenue and Scottish Charities Office, and (in Northern Ireland) the Charities Branch of the Department of Social Development have the same analogous responsibilities to those of the Charity Commission in England and Wales.

Operating Lease

When a school enters into an operating lease, the leasing company pays the supplier or manufacturer of the laptops and becomes the owner. The school agrees to lease (or rent) these from the leasing company for a specific period which is normally three years (although longer periods can be considered). The lease payments can be treated as a revenue expense by a local authority and do not impact on the authority’s capital budget. Ownership of the laptops remains with the leasing company and at the end of the term of the operating lease these will either be replaced by new equipment (on a new operating lease), or can be leased to the school for a further period, or can be sold to third parties that are not connected with the authority (e.g. parents). The advantage of an operating lease for laptops is that the cost of their use can be spread over several years.

Summary of contact details

Microsoft

Microsoft AAL Call Centre

Tel: 0870 60 70 800

Email: askedu@microsoft-contact.co.uk

Website: uk/education/aal

Arthur Andersen and Andersen Legal

Contact can be made through the AAL Call Centre.

Websites:

Charity Commission

There are three offices that are split geographically, all doing the same type of work. The location of a charity (usually found in the correspondent address) determines which office is responsible.

London

Harmsworth House, 13-15 Bouverie Street, London, EC4Y 8DP.

Tel: 0870 333 0123

Fax: 020 7674 2300

Liverpool

20 Kings Parade, Queens Dock, Liverpool, L3 4DQ.

Tel: 0870 333 0123

Fax: 0151 703 1555

Taunton

Woodfield House, Tangier, Taunton, Somerset, TA1 4BL.

Tel: 0870 333 0123

Fax: 01823 345003

Northern Ireland Charities Branch

Department for Social Development, Room C4, 22 Castle Buildings, Stormont Castle, Belfast, BT4 3PP.

Scotland Inland Revenue

FICO Scotland, Trinity Park House, South Trinity Road,

Edinburgh EH5 3SD.

Tel: 0131 551 8127

Inland Revenue

Financial Intermediaries and Claims Office (FICO), St John’s House

Merton Road, Bootle, Merseyside, L69 9BB.

Tel: 0151 472 6000 (General switchboard) 0151 472 6036 (General enquiries - charities) 0151 472 6037 (Deeds of Covenant) 0151 472 6038 (Gift Aid) 0151 472 6043 or 6046 (Charity Trading)

The London Stamp Office

The Controller of Stamps, Central Information Section

South West Wing, Bush House, London, WC2B 4QN.

Tel: 020 7438 7452

The addresses of local stamp offices can be found in your telephone directory.

Legal Disclaimer

The content of this guide, including but not limited to the text and images herein and their arrangements, unless otherwise noted, are Copyright © 2000 Microsoft Corporation. All rights reserved. All trademarks referred to are the property of their respective owners.

Nothing in this guide shall be construed as conferring any licence or right under any copyright, trademark or other property rights of any contributors to the Guide. There is no client, advisory, fiduciary or professional relationship created between the user of this guide and Arthur Andersen or any other person. In preparing this Guide, neither Microsoft nor Arthur Andersen are engaged in providing auditing, accounting, tax, legal, advisory, consulting or other professional services to the users of this guide. This guide is not a substitute for the independent investigations and the technical and business judgement of anyone using this guide and you should consult with a professional advisor familiar with your particular factual situation for advice or service concerning specific matters.

Arthur Andersen (and its member firms and affiliates, including their respective partners, principals, employees, agents and representatives) and Microsoft make no representations as to the accuracy, timeliness, suitability or any other aspect of this guide. Microsoft and Arthur Andersen hereby disclaim all warranties, terms and conditions and obligations with regard to this guide including but not limited to any implied warranties, terms and conditions of satisfactory quality, fitness for a particular purpose, title and non-infringement. Microsoft and Arthur Andersen (its member firms, affiliates, partners, principles, employees, agents and representatives) are not liable for any direct, indirect, incidental, special, exemplary, consequential or other damages, (including but not limited to liability for loss of profits), arising under contract, negligence or other tortuous actions, in connection with this guide.

e-Learning Funding Guide CD

This CD is available from the Microsoft Contact Centre on 0870 60 70 800 or email: uk-aal@

Loading Instructions

This CD-ROM should run automatically. If you have disabled the 'AutoRun' feature or it fails, simply select the 'start' menu on the taskbar and choose 'run'. Type D:\index.html (where 'D' is your CD-ROM drive) and click 'ok'.

This has been optimised for Microsoft® Internet Explorer version 4.0 or later on both PC and Macintosh.

To open and use these documents you will require Microsoft® Office 97/2000 for PC or Word and Excel for Macintosh.

Microsoft and the Microsoft logo are registered trademarks of Microsoft Corporation in the US and/or other countries.

All other trademarks are held by their respective companies.

Part No: E022

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Forward

Contents

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The new world of

e-Learning

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The new world of

e-Learning

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The new world of

e-Learning

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Establishing and managing your e-Learning Foundation

Evaluate your

school’s

funding

requirements

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Establishing and managing your

e-Learning Foundation

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Establishing and managing your

e-Learning Foundation

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Establishing and managing your

e-Learning Foundation

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Establishing and managing your

e-Learning Foundation

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Establishing and managing your e-Learning Foundation

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Establishing and managing your

e-Learning Foundation

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Establishing and managing your

e-Learning Foundation

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Establishing and managing your

e-Learning Foundation

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Establishing and managing your

e-Learning Foundation

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Setting up a

Multiple school

or LEA

e-Learning

Foundation

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Setting up a

Multiple school

or LEA

e-Learning

Foundation

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Establishing and managing your

e-Learning Foundation

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Tax and VAT

information

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Tax and VAT

information

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Tax and VAT

information

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Tax and VAT

information

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Tax and VAT

information

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Tax and VAT

information

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Tax and VAT

information

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Tax and VAT

information

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Contents

Appendix 1

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Appendix 1

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Appendix 1

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Appendix 2

The new world of

e-Learning

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Appendix 1

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Appendix 1

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Appendix 1

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Appendix 2

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Appendix 2

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Glossary

of terms

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Glossary

of terms

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Summary of contact details

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Establishing and managing your

e-Learning Foundation

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The e-Learning Funding Guide

The e-Learning Funding Guide

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