Editorial: Charging for late accounts could produce results

Stephen Cook

As the Charity Commission's review of its own structures and procedures gathers pace, the difficult question of whether and how it might raise money from charities has raised its head again.

Commission chair Geraldine Peacock reminded us last week that an unacceptably high proportion of charities, including some of the larger ones, fail to submit their annual accounts on time, and that the commission at present has no power to fine them. And the question of charging charities for registration is in the air because the idea has been put forward and subsequently rejected in New Zealand.

The Charity Commission here emphasises that it has no plans to consider charging for registration, giving the impression that it considers it to be far too warm a potato. But, as one of our Hot Issue contributors points out on page 17, charity legislation in the early 1990s gave the commission the power to charge for services. This is a power it has never used, but there are many who feel it would be no bad thing to charge for registration, especially if the charge was small and geared to the assets of the charity. It would focus minds a little and perhaps reduce the proliferation of charities.

However, the commission seems a bit more interested in penalties for late accounts. Fresh legislation would probably be necessary to allow it to fine charities, but there are cunning plans lying about: you could, for example, use existing powers to charge people for filing annual accounts, but waive the charge if they were delivered on time. If more charities did file on time, the knock-on benefits would be great - better financial discipline generally, with less scope for inefficiency, drift and fraud.

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