The Charity Commission has published short summaries of the changes to the Charities Act coming into force this autumn. They include changes to how trustees can be paid for providing goods to the charity, what charities need to do when appeals raise too much or too little, and how they can amend Royal Charters.
The Charities Act 2022 received Royal Assent in February this year.
Paying trustees for providing goods to the charity
Charities already have a statutory power that they can use in some circumstances to pay trustees for providing a service to the charity beyond usual trustee duties, or goods connected to that service.
Under the changes to the Charities Act 2022, charities will be able to pay trustees in certain circumstances for just providing goods to the charity.
This will include:
- Services only, for example estate agency or computer consultancy
- Services and associated goods, for example plumbing or painting service and any associated materials such as plumbing parts or paint
- Following implementation of the Act in autumn, goods only, for example supplying stationery to the charity
Fundraising appeals that do not raise enough or raise too much
Under the changes:
- The current requirement in some circumstances for charities to wait six months for donors to ask for a refund will no longer apply
- There will be a simpler process for obtaining our authority; this will replace the need for the Commission to make a scheme
- If the donations that can be spent on new purposes (different to the purposes you raised them for) are less than £1000, trustees can act without the Commission’s involvement if they comply with the new legal requirements
Power to amend Royal Charters
Charities with Royal Charters will be able to use a new statutory power to change sections in it that they cannot currently change – if that change is approved by the Privy Council.
The amended Act will also:
- Confirm that the Commission’s scheme-making powers include making schemes for charitable companies
- Confer trust corporation status automatically to existing and future corporate charities in respect of any charitable trust of which the corporation is (or, in the future, becomes) a trustee
- Update provisions relating to giving public notice to written consents and orders of the Charity Commission under various sections of the Charities Act 2011
- Mean that when a charity changes its governing document by parliamentary scheme, under section 73 of the Charities Act 2011, the scheme will by default always be under a lighter touch parliamentary process (known as the negative parliamentary procedure)
One change originally planned for this autumn that is not currently going ahead is to the laws allowing charities to return items on moral grounds. Last week in the House of Lords, Civil Society Minister Lord Kamall said that these laws would be deferred while the government works to fully understand the implications for museums.
More changes are expected to come into force in spring 2023 and autumn 2023.
- Changes to how charities sell, lease or transfer land (due to come into effect in spring 2023)
- Greater flexibility to make use of ‘permanent endowment’ – this is money or property originally meant to be held by a charity forever (due to come into effect in spring 2023)
- Changes to how charities can amend their governing documents (due to come into effect in autumn 2023)
The implementation plan is available here.