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

28 Sep 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.

 

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