The government and the Charity Commission should put in place measures that make it easier for charities to merge, according to the House of Lords Select Committee on Charities.
In its report, Stronger Charities For A Stronger Society, the committee says the government should bring forward at the earliest opportunity a parliamentary bill that would address some of the legal and technical barriers charities face when they want to merge.
It says the Charity Commission should consider the support and guidance it offers to charities that want to merge, and direct them to services that can help. "The commission should take a positive approach to assisting charities that choose to merge and assist in removing any barriers that may exist, notably with regard to liabilities such as pension arrangements," the committee says.
The committee adds that the Charity Commission should include options for time-limited structures in the model governing documents that it produces for charities. These clauses would encourage a new charity to consider its lifespan when setting up the organisation.
The report cites the Diana, Princess of Wales Memorial Fund as an example of a successful time-limited charity. The foundation chose to spend all of its resources and close in 2012 after 12 years of operation.
"Time-limited structures are a good option for ensuring that small charities such as memorial foundations are able to dissolve when they have delivered on their charitable objectives," the report says. "A merged or closed charity does not necessarily mean a failed charity."
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