23 September 2021 - Article
The Revitalising Trusts programme aims to provide up to £1 million in grant funding to community charities each year by moving assets from inactive or dormant charitable trusts to local community and voluntary organisations. The programme is the result of a partnership between the Charity Commission, the Department for Digital, Culture, Media and Sport and UK Community Foundations (‘UKCF’) as part of the government’s civil society strategy.
The programme is being led by the Charity Commission proactively contacting charities it considers are ineffective, inactive or dormant to encourage trustees to consider how they may best make use of the charity’s assets. ‘Ineffective or inactive’ trusts are defined as those which have spent less than 30% of their income over the past five years, while ‘dormant’ trusts are those which have not spent any income over the past five years.
Charities contacted by the Commission are asked to take action within four weeks to prevent an investigation by the Commission. The options given by the Commission are to transfer the charity assets to another charity, wind up the charity, or seek to change the charity’s objects so that the charity can work more effectively. Charities can seek assistance from UKCF or the Commission to discuss these options. The partnership with the UKCF aims to encourage charities that are considering winding up to transfer their funds to a community foundation.
The Charity Commission acknowledges that there are many different reasons why a charity may become inactive or dormant. For example, the charity’s objects may be out of date or no longer relevant, making it difficult for the trustees to find appropriate beneficiaries to support, or the charity assets may be so small that the income available to distribute is not of a sufficient amount to provide any meaningful impact. In other instances charities may not be able to recruit new trustees or current trustees may find the administrative obligations associated with making grants and running the charity to be overly onerous.
If you are concerned that your charity may be considered ineffective, inactive or dormant, or you have received an email from the Charity Commission, please contact Chris Priestley or another member of the Withers charity team for advice.