Lord Hodgson’s proposal to increase the income threshold for compulsory registration with the Charity Commission from £5,000 to £25,000 a year would be disastrous for small charities, according to the Directory of Social Change.
Hodgson’s review of the Charities Act 2006, published this week, recommends that the income threshold be increased, partly to reduce the regulatory burden on small charities and to cut the commission’s workload given its reduced budget.
But Debra Allcock Tyler, chief executive of the DSC, said the recommendation would cripple the ability of small charities to raise money and increase public awareness about their work.
She said the proposal would be disastrous for small charities and would not be in the public interest.
"It is absolutely crucial that small start-up charities have the chance to earn a charity number and provide information on the Charity Commission register," she said. "This is vital for fundraising, particularly from grant-making trusts, and also to raise public awareness."
Allcock Tyler said that although Hodgson recommends allowing voluntary registration below the higher threshold over time, this would take place only after large numbers of excepted charities and the new charitable incorporated organisations had been registered.
"It is hard to see how the Charity Commission will manage this in the near future, given its dire financial situation," she said."We were supposed to get voluntary registration as a result of the Charities Act 2006, but it still isn’t possible in practice. Instead, we might be waiting another five years for it after the review of that very same act, if we get it all."