Regulation with Rosie: The new Charities Act provisions

The Charity Commission's Rosie Chapman on the new Charities Act provisions.

As speculation about the impact of the public benefit requirement continues to hog the media limelight, many could be forgiven for thinking that was the sole purpose of the Charities Act 2006.

I appreciate that, for the media, the issue of public benefit is much sexier than the act's nuts and bolts provisions, but these offer practical options that many trustees will want to take up.

The new provisions recognise that trustees are generally the people best equipped to make decisions about administration, not the commission. It gives them the flexibility to address their charities' needs themselves. Yet many trustees who call our contact centre are still unaware of the range of options the changes offer them.

Small charities with incomes under £10,000 make up the majority on the commission's register. Together, they represent an income of more than £280m. Many of these unincorporated charities have capital that could not previously be spent as if it were income, but now they can transfer their assets to a similar charity or modernise their objects, freeing up unused assets for active use.

The act also offers charities that are also companies the freedom to make changes, in most circumstances, to their memoranda and articles so that they too can update and modernise.

And rather than permitting trustee remuneration through the back door, the provision to pay some trustees for providing goods and services formalises an arrangement that previously required our authorisation.

Self-regulation doesn't mean no regulation, and trustees are still expected to provide and be able to demonstrate their duty of care. Freedom and responsibility have always gone hand in hand. What these changes mean is that more trustees can have both.

Rosie Chapman is executive director of policy and effectiveness at the commission.

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