Reform to outdated law puts onus on charities to prove public benefit

An overhaul of 400-year-old charity law will mean charities have to
prove their activities have a public benefit in the future.

The draft Charities Bill published last week sets out 12 areas
under which charities can operate but it does not provide a
definition of what is meant by public benefit.

They include the advancement of education, religion, health
citizenship or community development, arts and amateur
sports.

Home Office minister Fiona Mactaggart said the public benefit test
would be the “bedrock” of charitable status, but she added that it
would be left to the Charity Commission to decide on a case-by-case
basis whether an organisation’s activities fitted that
definition.

Under the bill, the Charity Commission will have improved
accountability, and a new independent tribunal will be established
to deal with decisions made by the commission where charities are
unhappy. Geraldine Peacock, a trustee of the National Council for
Voluntary Organisations, was appointed as the new chair of the
Charity Commission last month and will be expected to push forward
its greater regulatory role.

Measures to introduce payments for certain services carried out by
trustees are also included in the draft bill, alongside a power to
allow trustees to apply directly to the commission for relief from
personal liability where they have made honest mistakes.

It is hoped that giving improved guidance and advice to trustees
may help charities recruit the high calibre people needed for the
job.

Describing the UK’s charity laws as in need of “urgent
modernisation”, Mactaggart said: “Charities are a major force for
good in society. They can reach out to some of our most
marginalised and deprived communities and provide a strong voice
for those who need it.”

The National Council for Voluntary Organisations welcomed the move,
agreeing there was “a clear and immediate need to reform charity
law”.

Chief executive Stuart Etherington said: “The current system is
complex, outdated and confusing to the public. We share the
government’s view that legislation is needed but we need to get
this draft right to ensure that we have an effective legal
framework and regulator that will take us forward into the
future.”

l See news analysis, page 16