It was the report the sector had been waiting for – Lord Hodgson’s review of the Charities Act 2006. When it arrived in July, the 159-page tome proposed a range of reforms.
These included charging charities for regulation by the Charity Commission, withdrawing Gift Aid for late filing of accounts, allowing charities with incomes of more than £1m to pay trustees without sanction by the commission and raising the income threshold for compulsory regulation for charities from £5,000 to £25,000.
While sector body leaders claimed there was much to welcome, Sir Stuart Etherington, chief executive of the National Council for Voluntary Organisations, also said there were a few "bad apples" among the recommendations.
Nick Hurd, the Minister for Civil Society, seemed to agree in one respect at least: in its interim response to Hodgson’s review in December, the government turned down the peer’s proposal regarding trustee pay – leading Sir Stephen Bubb, head of the chief executives body Acevo, to accuse it of hypocrisy. Hurd’s response also said more work was needed on Hodgson’s recommendation for charging charities for filing their annual returns, while there was an "amber light" for a proposed change to the mandatory registration threshold.
In February, the charity tribunal delivered its verdict in the case about whether charities that help a limited group of people, such as benevolent funds, could be considered charitable.
The case was heard following a reference from Dominic Grieve, the Attorney-General, which asked the tribunal to settle questions about whether "a trust for the relief of poverty" could be charitable if those who benefited could be defined by their relationship to an individual, company or unincorporated organisation.
The tribunal said that in all three cases, a trust could be charitable.
In June, the commission published its draft revised guidance on public benefit, in light of a ruling by the Upper Tribunal that aspects of its previous guidance were wrong. A three-month consultation followed, which led the law firm Bircham Dyson Bell to say the revised version would be "nigh on impossible" for trustees to use effectively.
In September, the Cabinet Office confirmed the writer and broadcaster William Shawcross as the commission’s new chair, despite three MPs on the Public Administration Select Committee voting against his appointment. He replaced Dame Suzi Leather, who stepped down in July after six years in the role.
Shawcross was soon making headlines: Bubb accused the former war correspondent of being out of touch on key issues after he suggested charities "should not become the junior partner in the welfare state" and some had become "dependant on the state". Shawcross also told MPs on the Public Administration Select Committee that face-to-face fundraising was "a blight on the charitable sector". All eyes will be on how he settles into the role in 2013.
The commission itself was at the centre of another of the year’s big stories after it decided not to grant charitable status to the Preston Down Trust, a congregation of the Plymouth Brethren in Devon. The trust is appealing against the regulator’s decision and the case has prompted the charity tribunal to give permission, for the first time, for witnesses at the forthcoming hearing in March to give evidence anonymously. The Pagan Federation is also appealing against the commission’s decision to deny it charitable status.
Om another long-running legal battle, the Upper Tribunal ruled in November that the adoption agency Catholic Care cannot change its objects to exclude gay couples. The Leeds-based charity had first appealed in 2008 against the commission’s initial decision that it could not change its objects.
And finally, the ramifications of allegations of sexual abuse against the late DJ and TV presenter Jimmy Savile led trustees of the Jimmy Savile Charitable Trust and the Jimmy Savile Stoke Mandeville Hospital Trust to decide in October to close the organisations. The assets will be distributed to other good causes.