Charity Law and Governance e-alert - September 2019
4 September 2019
Welcome to our latest e-alert which summarises some of the current issues affecting the charity sector.
In this edition we look at charity mergers; safeguarding in the charity sector following the revelations concerning Oxfam and Save the Children; a reminder about the Lobbying Act and charities; and finally, what has happened to the new Charities Bill?
We hope you find the information useful. If you have any questions surrounding any of the issues discussed, or would like to speak to a member of the team about anything your charity is facing at the moment, please get in touch.
Charity mergers – what's our view?
It's often claimed that there are too many charities all doing the same thing – and sometimes that there are too many charities full stop. These days, anyone thinking of setting up a new charity will be encouraged by the Charity Commission's online guidance to find out first if any existing charities are already doing what it is proposed their new charity will do. If there are, the guidance suggests, working together with that charity or charities might be more effective than setting up a new charity that does the same thing.
As practitioners, we continue to advise far more frequently on charity formations than we do mergers, so the Commission's message might not be getting through. This is partly because it doesn't have the resources to focus on mergers, however much it might be in favour of them, and so the impetus for one is unlikely to come from the Commission - usually it will come from within one or more of the charities involved. However, given that there are as many arguments in favour of it as there are against, deciding whether or not to merge is not always easy.
Safeguarding – charities in the spotlight
Various revelations and reports in the early part of last year - notably, those concerning Oxfam and Save the Children – have put the charity sector very much into the spotlight when it comes to safeguarding, and that light looks unlikely to be refocused in the near future.
Another general election? A Lobbying Act reminder
If, like Brenda from Bristol, you're thinking "not another one", it might be because your charity undertakes campaigning activity and the inevitability of (yet) another general election has raised the prospect of the charity's registration with the Electoral Commission.
Campaigning and political activity by a charity is perfectly acceptable, provided that it is undertaken as a means of delivering the charity's purposes. For example, a charity can campaign for a change in the law or policy, if that change would support the charity's purposes. Most of the time, there is no limit on the extent to which a charity can engage in political activity, provided that it does not become the only way in which the charity pursues its objects and that it does not become partisan or party political in nature.
However, since the advent of the Lobbying Act (full name: Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act) in 2014, charities have had to be careful about how much they spend on certain campaigning activities in the lead up to an election.
And finally… where's the new Charities Bill?
Following the publication of the Law Commission's paper "Technical issues in Charity Law", published in September 2017, charity lawyers were assured by the Law Commission that new legislation would be in place earlier this year. However, it seems that, because of ministerial changes and pressures on the parliamentary timetable as a result of Brexit the associated Bill is unlikely to resurface any time soon.