OSCR publishes paper to help Scottish charities release restricted funds

Guidance explains how to unlock assets that cannot be used because of outdated restrictions

Office of the Scottish Charity Regulator
Office of the Scottish Charity Regulator

The Office of the Scottish Charity Regulator has published a guidance paper on new legislation aimed at making it easier for charities in Scotland to free up restricted funds for charitable purposes.

Under the Charities Restricted Funds Reorganisation (Scotland) Regulations 2012, which came into effect on Thursday, charities can apply to the OSCR to unlock assets that cannot be used because of outdated restrictions.

OSCR said the new measures could mean millions of pounds worth of assets being made available to benefit the sector.

Restricted funds are assets that someone has given to a charity under certain conditions relating to their use.

The guidance, called Reorganisation of Restricted Funds, says the new measures allow charities to change the purpose for which funds can be used, and change or remove conditions imposed on how they can use the funds.

Charities must show why change is necessary to unlock the restricted assets. They must demonstrate that the changes to the fund will solve a problem that makes the restricted funds ineffective or less effective than they could be.

Charities must also show that if the restricted fund were reorganised, it would be able to make better use of the resource to meet its charitable aims. They must also have been unable to find out the wishes of the person who gave the funds, the report states.

Martin Tyson, head of charity services at the OSCR, said: "Before OSCR was established, charities faced potentially lengthy and expensive legal processes to make changes to restricted funds.

"By applying to us as a regulator, charities can respond positively to change by, for example, changing the purpose for which the funds might be used. They can also remove the conditions imposed on them regarding how they can use the funds, although there are safeguards to protect the wishes of donors."

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