Kenneth Dibble

1

The Charity Commission as Regulator of Charities
inEngland and Wales

• Kenneth Dibble
• Executive Director Legal and Charity Services

2
Scope of charitable Sector in England and Wales

• 190,000 registered charities
• Annual income 32 billion
• 78 of income accounted for by 3 of charities
• 600,000 paid staff
• 900,000 trustees
• 27 of population volunteer once a month

3
Scope of Regulation by Charity Commission

• Established by Statute (1993 Charities Act)
• - Remit charities established in England and
• Wales
• Independent of Government
• Key functions civil regulator
• - Support and intervention

4
Scope of Regulation by Charity Commission

• Promoting charity effectiveness by
• - Maintaining a public register of charities
• - Advice and guidance
• - Conferring regulatory consents
• - Monitoring, investigating and remedying abuse
  and maladministration

5
Maintaining a Public Register of Charities

• Public register
• Requirements of registration
• Exempt and Excepted charities
• Information available
• - name, purposes, governing document,
• trustee names, contact details, submission
• of accounts record
• - copy of register extract
• - copy of governing document and accounts

6
Advice and Guidance and Conferring Regulatory
Consents

• Powers to give general advice
• Powers to give specific advice that trustees are
  acting within their trusts
• Authorising transactions or acts contemplated in
  the administration of a charity

7
Monitoring, Investigating and Remedying Abuse
andMaladministration

• The monitoring infrastructure
• Statutory inquiries
• Temporary and protective powers
• - freezing bank accounts
• - restraining trustees
• - suspending trustees, officers, employees
• - appointing receiver and manager
• Permanent and remedial powers
• - scheme of reorganisation
• - removal of trustees, officers, employees
• - appointing new trustees
• - legal proceedings to recover charity property

8
Commission as RegulatorStrategic Perspective

• Principles of best regulatory practise
• - proportionate, accountable, consistent and
• transparent, targeted
• Support and Intervention
• - securing compliance with charity law
• - enabling charities to work better
• - promoting sound governance and accountability
• Proportionate regulation
• - upfront guidance, support and advice
• - intervention where real and substantial
• - detriment to beneficiaries
• - significant loss or risk to assets
• - damage to public reputation of charity or
  charity in general
• - damage to public confidence in charity
  regulation

9
Commission as RegulatorRegulatory Activity

• 20 million hits on our website
• 60 key publications
• 210,000 calls to our Contact Centre
• 10,000 responses to email requests
• 28,000 pieces of tailored advice
• 6,270 Registrations
• 5,000 Consents or authorities given
• 600 Review visits
• 300 Investigations

10
Charity Commission The FutureA new vision and
mission
11
New Charity Legislation Charities BillBackground

• Strategy Unit review
• Government Proposals for a Charities Bill

• - Reforming the legal framework
• - Building trust and confidence
• Ensuring independent, open and
• proportionate regulation

12
Charity Commission

• Reconstituted Commission as a corporate body
• Five regulatory objectives directed at charities
• increase public confidence
• promote awareness and understanding of public
  benefit
• increase compliance with legal obligations
• encourage effective use of resources
• enhance accountability
• Five general functions
• determining charitable status
• encouraging / facilitating better charity
  administration
• identifying, investigating and remedying abuse
• obtaining, evaluating and disseminating
  information
• giving information, advice, proposals to
  Ministers

13
Charitable statusCharitable purposes

• Purposes
• 12 descriptions of purposes
• minor extensions of common law in respect of
  poverty, sport and community development, animal
  welfare. Further definitions for health
  citizenship and community development amateur
  sport relief in need.
• 12th purpose - residual category and provides for
  
  development of law by analogy.
• Common law interpretation of terms
• Public benefit

14
Public benefit test

• Removal of the presumption
• Common law definition remains
• net benefit, public accessibility, private
  benefit
• incidental
• Commission under duty to provide guidance on
  public benefit subject to consultation
• Future development of the law
• legal basis for development
• current issues
• development of guidance
• poor relations/employees
• fee charging charities
• religious charities

15
Commission approach toremoval of presumption

• Development of public benefit guidance
• At registration
• positive assurance of public benefit
• Public character checks

16
Charitable Incorporated Organisation

• New legal entity, corporate structure, liability
  of members limited, minimum 1 member, minimum 1
  trustee, Commission sole jurisdiction
• CIO becomes incorporated on registration with
  Commission as a charity
• Powers of CIO
• Duties of charity trustees and members
• Relations with third parties
• Conversion procedure for charitable companies and
  IPSs
• Transfer procedure for unincorporated charities
• Amalgamation and transfer procedure for CIOs
• Dissolution

17
Charity Appeal Tribunal (1)

• New appellate court of first instance
• Jurisdiction to consider Commission decisions
  afresh and hear new evidence
• Commission respondent
• AG may intervene at his request or tribunal
  invitation
• Lord Chancellor to make rules governing appeals
• Appeal to court on a point of law

18
Charity Appeal Tribunal (2)

• Constitution
• president, legal and ordinary members
• Appeals
• - all decisions / orders currently subject to
  statutory appeals
• additionally exercise of other powers of the
  Commission

19
Charity Appeal Tribunal (3)

• Class of applicant
• - varies - AG, charity, institution, trustees,
  persons
• controlling and managing, persons affected
• Decision of tribunal
• - varies - dismiss, quash, substitute for
  decision
• another decision Commission could have
  made,
• refer matter back to Commission
• Commission
• - power to refer matter to Tribunal with consent
  of AG

20
Registration

• Not required if
• - income lt 5000 excepted by Commission
• or SoS if income lt 100,000
• Voluntary registration
• Position of Exempt Charities
• concept of principal regulator
• Regulatory intervention by Commission at request
  of principal regulator

21
Enhanced Commission powers

• To give general advice and guidance
• To enter premises to secure, inspect take
  possession of documents including e storage
  facility

22
Enhanced Commission powers

• To give direction to protect charity
• To direct application of charitable property

23
Enhanced Commission powers

• To confer relief for breaches of trust if
  trustees have acted honestly and reasonably
• Change to cy pres rules to facilitate changes of
  purposes
• Public register of merges conferring
• - automatic vesting
• - automatic transfer of legacies

24
Provisions to help charities

• Powers to change object, powers, administrative
  provisions
• Power to spend capital if justified as being in
  the interests of charity
• Powers to take out Trustee Indemnity Insurance

25
Charities Bill

• Third reading and Report in House of Lords in
  October
• In House of Commons by 2006
• Royal Assent and Implementation hoped by mid
  2006