Five changes to charity law announced

SEVERAL technical – but important – changes have been made to charity law.

The changes have been welcomed as a way to make life simpler for trustees while simultaneously helping them to deliver the benefits that their charity delivers.

The Charity Commission has been working closely with charities and their representative bodies, the Department for Digital, Culture, Media & Sport (DCMS), and the Law Commission, to bring these changes forward.

They were announced in The Charities Bill in the Queen’s Speech earlier this month.

The key proposed changes for charities and their trustees are:

1. Charities and trustees will be able to amend their governing documents or Royal Charters more easily – remaining subject to the Commission and the Privy Council’s approval in certain circumstances.
2. Charities will have access to a much wider pool of professional advisors on land disposal, and to more straightforward rules on what advice they must receive, which could save them time and money when selling land.
3. Charities will have more flexibility to make use of a ‘permanent endowment’ – this is money or property originally meant to be held by a charity forever. This includes a change which will allow trustees to borrow a sum of up to 25% of the value of their permanent endowment funds, without the Commission’s approval.
4. Trustees will be able to be paid for goods provided to a charity in certain circumstances, even if not expressly stated in the charity’s governing document (currently trustees can only be paid for supply of services). From pencils to paint, this will allow charities the flexibility to access goods from trustees when it is in the best interests of the charity (e.g. if cheaper), without needing Commission permission.
5. Charities will be able to take advantage of simpler and more proportionate rules on failed appeals. For example, if a charity appeal raises too little money, the charity will be able to spend donations below £120 on similar charitable purposes without needing to contact individual donors for permission.

Aarti Thakor, Director of Legal Services at the Charity Commission, writes on the commission’s blog: “When enacted, the changes will also ease some of the regulatory pressures on trustees and reduce unnecessary bureaucracy.
“This will enable charities to deliver greater impact for the people and causes they are set up to support.
“Given the additional pressures placed on trustees during the pandemic, this is especially welcome.
“These changes chime directly with a key objective in our 2018-2023 strategy, which is to give trustees the tools they need to succeed.”