New Charities Act

The Charities (Protection and Social Investment) Act 2016 (“the Act”) received Royal Assent on 16 March 2016 and all charities should be aware of how the changes will affect them. In brief:

Social investment

Social investment means investing the charity’s money in a way which does not just seek to make a financial return for the charity, but also aims in some way to further the charity’s objects. These new provisions will be particularly helpful for charities wishing to make social investments, or to benefit from social investment by other charities.

Fundraising

There are more controls over the relationship between charities and commercial organisations that raise funds on their behalf. All charities that have relationships with professional fundraisers and/or commercial participators will need to make sure that their fundraising agreements are compliant. Larger charities will be required to include a new statement about their fundraising practices in their annual report. The Act also includes new powers for the Government to support and intervene in the regulation of fundraising.

Disqualification of charity trustees

More people will be automatically disqualified from acting as charity trustees. The Charity Commission will have a new power to disqualify people from serving as trustees. Disqualified trustees will not be permitted to serve in a senior management position in a charity nor to be actively involved in the management of a corporate charity trustee.

Charity Commission powers

The Charity Commission will have more regulatory powers over charities, including a new power to give official warnings to charities. These are potentially relevant to all charities, but in practice will only apply where the Commission has regulatory concerns about a charity.

The changes won’t all come into force at once, so it will be important for charities to understand how and when the changes will apply to them.

Marianne Webb can be contacted at m.webb@gullands.com