Charity law reform

The Charities Act 2022 – More information is now known on when these reforms will take effect, the following changes came into force this autumn:

Paying trustees for providing goods to the charity

At present charities can only pay their trustees for goods provided as part of a related service. Following implementation of the Act this will be extended to all goods.

Fundraising appeals that do not raise enough or raise too much

The complexity surrounding such situations will be reduced, for example introducing a simpler process for obtaining CCEW authority on how to deal with the funds raised, or if less than £1,000 to spend the funds raised on different purposes than what they were raised for without CCEW involvement. The current requirement in some circumstances to wait six months for donors to ask for a refund will also be removed.

Other changes that came into force this autumn include:

• Power to amend Royal Charters in areas that cannot currently be changed, with Privy Council approval.
• A simplified approach for charities changing their governing document by a parliamentary scheme.
• Confirmation that the CCEW’s scheme making powers include schemes for charitable companies.
• Automatic trust corporation status for corporate charities in respect of any charitable trust that corporation is a trustee of.
• Updated provisions related to giving public notice of consents and orders made by CCEW.

Other reforms to how charities sell, lease or transfer land and provide greater flexibility to make use of permanent endowments are expected to come into force next spring, with the last wave of reforms including changes to how charities can amend their governing documents planned to come into effect in the autumn of 2023. Plans to reform the treatment of ex gratia payments are being considered further and it has not yet been announced when these will come into effect.

Guidance: https://bit.ly/3BTKIoB

One implication of these reforms that has recently been highlighted by The Institute of Art & Law is that it should make it easier for museums to return an item in their collection to its country of origin for moral reasons, such as the recent move by Jesus College, Cambridge and the Horniman Museum to return several Benin Bronzes to Nigeria. The reforms to ex gratia payments will enable museums to return lower value items without Charity Commission approval. More significantly though it will allow statutory charities to also return items on moral grounds, where currently they are prevented from doing so by the Act of Parliament that governs their activities. Such restrictions are often cited by the larger national museums as a key reason why they are unable to return items to their source.

Museums considering the restitution and repatriation of items in their collection may find recent guidance issued by the Arts Council England helpful.

Guidance: https://bit.ly/3CnLX0P
https://bit.ly/3UTNiDN