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Charities Bulletin - March 2008Guidance on Public Benefit Further draft guidance from the Charity Commission on public benefit has just been published. More specific guidance for charities on the issue of public benefit has been published in the last few days. One guidance note relates to charities which work to prevent and relieve poverty whilst the other is aimed at charities that advance religion. Previously charities established for either of these purposes were presumed to exist for the public benefit. However, this presumption is removed by the Charities Act 2006 which introduces a requirement for all charities to demonstrate the public benefit which they provide. Both sets of guidance, which are available on the Charity Commission website, are in draft with comments welcomed by the Commission until June 30th. As we outlined in our January e-briefing, the sector specific guidance for fee-charging charities on public benefit is due imminently. Although no firm date has been forthcoming from the Charity Commission, we have been informed that it should be published in the next couple of weeks. This should provide more information on the standards which the Charity Commission is expecting from such charities and the practical steps they are likely to need to take in order to comply with the ‘public benefit test’. This supplementary guidance will also be in draft format, with the finalised version likely to be published later in the year following a period of consultation. Charity Fundraisers The new rules on solicitation statements are due to come into force on 1 April - are you ready?The Cabinet Office has published draft guidance on the rules which, from 1 April 2008, will require professional fundraisers to inform all potential donors of the amount of their donation that will go directly to the charity and the amount that will go towards paying their own wages, and how that is worked out. The rules are far reaching and will affect those that collect door to door, by telephone and through street collections. For example, this means a professional fund-raiser paid an hourly rate collecting money either on the street or by telephone must say “ I am a paid professional fund-raiser working on behalf of charity X and I am being paid an hourly rate of £X per hour. I expect to be paid approximately £X for carrying out this programme of conversations with supporters like yourself throughout the whole of the year.” Commercial participators (in other words shops and businesses unconnected to charities which run promotions promising to donate a certain proportion of the proceeds to charity) will also be caught so that they will need to specifically state the amount which they expect the charity will end up receiving. Failure to comply with the new rules may lead to a fine of up to £5,000. It is hoped that the rules, which come out of the Charities Act 2006, will ensure public confidence and trust levels are high and potential donors are able to make informed decisions about the direction their donations take. The Cabinet Office’s guidance includes a number of template oral and written statements which meet the requirements of the rules and gives a number of examples about how the new laws will work in practice.
Faith and Social Cohesion Unit A £1.4million commitment to a new Faith and Social Cohesion Unit will strengthen the Charity Commission’s ability to support and advise faith based charities. In 2004 the Charity Commission began a project to try and form an understanding of faith based charities. The Commission held a number of consultation events with Christian, Muslim, Hindu, Jewish, Sikh, Buddhist and other faith based charities. The idea was to establish how faith based charities operate and how the Commission could assist them to strengthen their structure and governance. The project identified the need for a centre of expertise on faith charities which could provide tailored advice and as a result a new Faith and Social Cohesion Unit will be established. It is hoped that the new Unit will not only work with faith based charities already registered with the Commission, providing additional training and support, but will also work with faith groups not currently registered with the Commission as charities. Although the Unit’s initial work will be with Muslim groups it is expected they will work with other faith groups in the future. The Commission is also establishing a Faith Advisory Group with representatives from a variety of faiths advising them on the wider aspects of their work.
Community Infrastructure Levy The Community Investment Levy - a levy on land developed by charities? The Planning Bill currently being presented to the House of Commons proposes the introduction of a new Community Infrastructure Levy (CIL). The idea is that developers will be charged the CIL to help the Government finance consequential infrastructure. Despite the CIL being described as similar to a tax, it is not yet clear whether charities will be exempt from making such payments. Justifiably this is of concern to charities developing their land for projects such as community sports facilities, church halls and accommodation for clergy. Although there is to be a minimum threshold, which is of reassurance in cases of minor development, the voluntary sector should be ready to pursue an argument for total exemption to prevent them failing foul of the CIL when undertaking larger developments.
Housing and Regeneration Bill Could the Housing and Regeneration Bill have serious consequences for charities who are Registered Social Landlords (RSLs)? Under the Housing and Regeneration Bill a new regulator, the Office of Social Landlords, would be established. This regulator would have new powers, at the direction of the Secretary of State, including the right to set compulsory standards for all those providing social housing. There is the potential for this to create difficulties for RSLs. This is firstly because the new regulator may require charity RSLs to extend their activities beyond their charitable objects, meaning their purposes are no longer charitable, and charitable status is lost. Further, the new regulator in directing such charities may be considered to be undermining the RSLs independence, which of course is a key element in maintaining public confidence and is central to charitable status. The Charity Commission has voiced these concerns to members of the Bill Committee and it is hoped that the legislation will provide for a new regulator without compromising the some 1400 RSLs currently registered as charities.
Charity Tribunal Administrative reasons lead to a delay in the launch of the Charity Tribunal. The Charity Tribunal was due to open for business on 27 February, however its launch has been put on hold. The Tribunal was established by the Charities Act 2006, primarily in order to provide charities with a means of challenging Charity Commission decisions without having to incur the expense and complexity of going to court. Although, a president of the Tribunal has been appointed, interviews for the 12 membership positions are not going to take place until April. A spokeswoman for the Ministry of Justice said that, although the president can hear cases alone, by the time the Tribunal hears its first case the membership positions will be filled. Once the Tribunal is up and running it will have the power to hear generic points of Charity Law as well as review Charity Commission decisions and hear appeals. It is thought that the Tribunal will hear up to 50 cases a year.
Acevo Guide/Trustee Training Attaining good governance - a guide for the CEOs of Voluntary Organisations. The Association of Chief Executives of Voluntary Organisations (ACEVO) has published a survival guide particularly aimed at charity CEOs to help them strengthen and develop their relationships with board members and chairs and to provide leadership advice. The guide also usefully provides case studies from members of ACEVO to illustrate governance best practice. To help boards function to the best of their ability Foot Anstey can provide training for board members, for example, to help them understand the nature of their duties and responsibilities as charity trustees.
For further information or advice please contact Anna Roderick or James Evans This bulletin is provided for information purposes only. Its contents do not constitute legal advice and should not be regarded as a substitute for specific professional advice. |
