With the voluntary sector having experienced one of the most challenging periods in history during the Covid-19 pandemic, last month’s Queen’s Speech brought welcome news in the form of The Charities Bill 2021.
Whilst the timing of the Charities Bill could not be better placed following such a tough phase for all those in the charity, voluntary and not-for-profit sectors, its inception in fact stems back to the recommendations made by the Law Commission in its 2017 report ‘Technical Issues in Charity Law’.
At its heart, the purpose of the Bill is to lessen the burden of bureaucracy that can hamper the day-to-day activities of any charity, whilst continuing to safeguard the public interest to ensure that all charities continue to be managed appropriately. This will be achieved by identifying and either removing or updating inefficient or unduly complex laws that are increasingly hampering the administrative and financial running of charities. But what exactly does this look like in practice?
It’s all to do with simplification with the ultimate goal of enabling charities to promote their causes and use the money they receive more effectively.
Moving forward, charities will be able to amend their governing documents more easily to better reflect their current and future needs – all, of course, with Charity Commission guidance and oversight. They’ll also receive greater flexibility in the use of their permanent endowment, albeit with a natural safeguard in place to protect it over the long-term. And, significantly, legal barriers will be removed that prevent charities merging when a merger is clearly in the best interests of all parties.
Collectively, these shifts will allow charities and their trustees to make the most of the donations that they receive and focus on their post-pandemic recovery and future growth. It’s all about regulatory rebalancing that brings charity law in line with the needs of the sector in the present day so that all charities can work better and more efficiently.
Any Charity Trustee who would like to discuss the implications of the Bill on their own organisation, please contact Stuart Rea on 01743 284159 or firstname.lastname@example.org.