With more changes to the Charity Act coming in next month, the Charity Commission has published short summaries on what’s due to come into effect.
Those coming into effect in June cover charity land, permanent endowment, and charity names.
Changes to the legal requirements on selling, transferring or leasing charity land aim to simplify some of the requirements and include:
- widening the category of designated advisers who can provide charities with advice on certain disposals
- confirming that a trustee, officer or employee can provide advice on a disposal if they meet the relevant requirements
- giving trustees discretion to decide how to advertise a proposed disposal of charity land
- removing the requirement for charities to get Commission authority to grant a residential lease to a charity employee for a short periodic or fixed term tenancy
On permanent endowment –property a charity must keep rather than spend – the Act will introduce new statutory powers to enable:
- charities to spend, in certain circumstances, from a ‘smaller value’ permanent endowment fund of £25,000 or less without Commission authority
- certain charities to borrow up to 25% of the value of their permanent endowment fund without Commission authority
Charities that cannot use the statutory powers will require Charity Commission authority.
There will also be a new statutory power that will enable charities that have opted into a total return approach to investment to use permanent endowment to make social investments with a negative or uncertain financial return, provided any losses are offset by other gains.
With charity names, the Act will enable the Commission to:
- direct a charity to stop using a working name if it is too similar to another charity’s name or is offensive or misleading. A working name is any name used to identify a charity and under which the activities of the charity are carried out. For example, ‘Comic Relief’ is the working name of the charity ‘Charity Projects’
- delay registration of a charity with an unsuitable name or delay entry of a new unsuitable name onto the Register of Charities
- use its powers in relation to exempt charities in consultation with the principal regulator
One other change is coming in next month: the definition of a connected person will be updated to remove outdated language.