Charity Investment

Changing charity law for the better? The Law Commission's Report and the draft Charities Bill

29/09/2017

Elizabeth Jones

Elizabeth Jones

Partner

Farrer & Co

The complex nature of the Law Commission's Report on Technical Issues in Charity Law meant its publication on 14 September was greeted with little fanfare. That should not detract from the wide-ranging changes to charity law that it recommends says Elizabeth Jones, Partner, Farrer & Co.

The Report focuses on a number of technical areas of charity law.  Notably, the draft Charities Bill (the draft Bill) appended to the Report (and designed to give legislative effect to many of the Report's recommendations) makes no change to the law on public benefit or the regulation of fundraising, which probably explains the lack of wider interest in the Report.  That said, the draft Bill contains the most significant legislative changes to charity law since the Charities Act 2006.    

While the draft Bill is unlikely to become law for some time, it is hoped that the parliamentary approval process is not derailed or significantly delayed by the demands placed on parliament by Brexit. 

This briefing provides an overview of key areas of change proposed on: 

  • Amending charitable purposes (of corporate and unincorporated charities)
  • The statutory powers of unincorporated charities set out in the Charities Act 2011 (the Charities Act)
  • Dealing with charity land
  • Permanent endowment
  • The process for charities established by Royal Charter or statute to amend their governing provisions
  • Ex gratia payments
  • Simplifying mergers and incorporations

The above is not an exhaustive list and a round-up of some of the other proposals follows a summary of the key recommendations on these topics.

Amending charitable purposes (of corporate and unincorporated charities)

The statutory powers of unincorporated charities set out in the Charities Act

The process for charities established by Royal Charter or Statute to amend their governing provisions

Dealing with charity land

Permanent endowment

Ex gratia payments

Round-up of other recommendations

Further information

For anyone short on time, the 43 recommendations of the Law Commission are summarised in Chapter 16 of the Report starting on page 355.The mark-up of the Charities Act is also very useful to quickly identify the proposed legislative changes. The Law Commission has also published a Summary of the Report.

It is hoped that the changes can be implemented fairly swiftly, given the benefit to the sector they promise and the considerable savings for charities with the removal of complex legislative requirements, which the Law Commission has deemed to be unnecessary after extensive consultation. 

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

If you require further information on anything covered in this briefing please contact Elizabeth Jones or your usual contact at the firm on 020 3375 7000.

Author

Elizabeth Jones

Elizabeth Jones

Partner

Farrer & Co

Elizabeth is a Partner at Farrer & Co who specialises in advising charities. Elizabeth’s areas of expertise including advising on governance and constitutional issues, re-structuring, fundraising, regulatory issues, grant-making and charitable trading. Elizabeth is a member of the executive committee of the Charity Law Association.

The opinions contained herein are those of the author and do not necessarily represent the house view. This document is intended to be for information purposes only. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Cazenove Capital does not warrant its completeness or accuracy. No responsibility can be accepted for errors of fact or opinion. This does not exclude or restrict any duty or liability that Cazenove Capital has to its customers under the Financial Services and Markets Act 2000 (as amended from time to time) or any other regulatory system. Cazenove Capital is part of the Schroder Group and a trading name of Schroder & Co. Limited 12 Moorgate, London, EC2R 6DA. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. For your security, communications may be taped and monitored. 

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