The Charity Commission has published a blog setting out the key changes to charity law that will be brought in by the Charities Bill. The Charity Commission welcomes and supports the proposed changes.
The Charities Bill was announced in the Queen’s speech on 11 May 2021 and was introduced to the House of Lords on 26 May. It is the result of a report published by the Law Commission in 2017 which investigated technical issues in charity law. The report recommended that a number of legislative changes be made to remove complexities in charity law that were unnecessarily costing charities time and money.
The Charities Bill will bring many of these proposals into force. The key changes highlighted by the Commission in its blog are as follows:
- Amending Royal Charters: A new power will be introduced allowing charities created by Royal Charter to amend any provision in their Royal Charter for which there is currently no express power of amendment. Such amendments will be subject to approval by the Privy Council. This will save the time and expense that would be incurred if charities instead have to follow the procedure of adopting a Supplemental Charter.
- Disposal of charity land: The categories of professionals who can provide a charity with advice regarding the disposal of charity land is to be expanded and the content of expert reports on land transactions will be revised. This could save time and money for charities disposing of land.
- Permanent endowment: The definition of permanent endowment will be reformulated to remove inconsistencies and lack of clarity. Trustees will also be allowed to borrow a sum of up to 25% of the value of their permanent endowment without requiring Charity Commission consent.
- Supply of goods: The power currently allowing trustees to be paid for providing services to a charity will be extended to also cover the supply of goods. This power will supplement any existing power already contained in a charity's governing document.
- Failed appeals: When a charity appeal raises too little money, the charity will in future not have to take steps to contact individual donors if the amount of the donations is below a threshold of £120. The administrative burden of contacting donors following a failed appeal is often disproportionate to the size of the donation.
It is hoped that the changes will ease the regulatory pressures on charities in some respects and allow them to carry out uncontroversial operations more efficiently.