Reform to outdated law puts onus on charities to prove public benefit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    complex, outdated and confusing to the public.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

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