What changes have we already seen?
Changes that came into force on 31 October 2022 included:
- A statutory power to pay trustees to provide a service to the charity (even where not specifically authorised in a governing instrument). This will extend the existing statutory power which relates only to the provision of goods;
- Greater freedom in the context of “failed” fundraising appeals; and
- Changes which simplify the procedures for amendments to Royal Charters.
Changes in June
On 14 June the second tranche of changes was introduced. These include:
- A simplification of the rules on selling, leasing or otherwise disposing of land. Charities will now be able to consult a range of designated advisers on the disposal of land, rather than only being able to seek advice from a qualified surveyor. Designated advisers now extends beyond RICS qualified surveyors and includes fellows of the Central Association for Agricultural Valuers or fellows of the National Association of Estate Agents. The designated adviser can also be a trustee or officer of the charity, provided they meet the required qualifications (subject to managing conflicts of interest).
- Clarification on the position for short term tenancies to connected persons who are employees of a charity where the disposal confers the right to occupy a dwelling as a home. These no longer require an Order from the Charity Commission.
- A statutory power to spend 'smaller value' permanent endowment (i.e. with a value under £25,000) without the consent of the Charity Commission.
- A statutory power to borrow from a charity's permanent endowment without Charity Commission authority up to a limit of 25% of the total value.
- Where a charity has opted into a total return approach to investment the power to be able to make investments with a negative or uncertain financial return, provided losses are offset by other gains.
- Powers for the Charity Commission in relation to charity names, including a power to direct a charity to stop using a working name if it is too similar to another charity or is offensive or misleading and a power to delay the registration of a charity with an unsuitable name. This power extends to exempt charities in consultation with other principal regulators.
The Commission has updated its guidance on selling, leasing or otherwise disposing of charity land in England and Wales as well as its guidance on permanent endowment.
What changes are we waiting to see?
The Department for Digital, Culture, Media and Sport (DCMS) have updated their implementation plan to confirm that the next tranche of changes is expected by the end of 2023, rather than in Autumn 2023.
We reported on 21 October that the expected changes to the rules on ex gratia payments were delayed and we have not yet received an update from DCMS on whether or when these changes will be implemented.
We will continue to keep our charity clients updated on how these changes will affect them and when further changes are implemented.
