Regulator will require charities to publish details of overseas funding

The Charity Commission will expect charities to include in their annual returns information on the size and source of these funds

Charity Commission
Charity Commission

The Charity Commission will ask charities to detail in their annual returns any funding they have received from overseas, as part of government measures to combat Islamic extremism.

Amber Rudd, the Home Secretary, said in a statement in the House of Commons yesterday that, having finished a long-running review of the funding of extremist Islamic organisations, the commission would require charities to "declare overseas funding sources". Rudd admitted in the statement that the majority of funding for such groups came from donors in the UK.

A spokeswoman for the Charity Commission said in a statement that the regulator would be asking charities to declare in their annual returns whether they have received income from overseas and the source and amount of those funds.

"This change is part of our wider work to align the annual return with the strategic risks facing charities and to ensure that charities are only asked to respond to question areas that are relevant to their work," she said.

"This is information that the public would expect a modern, risk-based regulator to hold on charities, and to make available for the purposes of accountability and transparency."

She said the plans for the new requirement, which will be introduced for the 2017 annual return, expected to be published later this summer, were already being developed before some of the issues in the extremism review came to light.

The spokeswoman said in the statement: "Since our consultation on the purpose of the annual return, we have engaged in more detailed discussions with sector organisations about the wording of proposed questions to help ensure charities understand the questions and how they will be expected to respond."

Rudd’s statement to parliament said the commission had in recent months been discussing the introduction of a requirement on charities to declare overseas funding sources.

But Caron Bradshaw, chief executive of the Charity Finance Group, said there had been no public discussion about the change and called for a full consultation on the measure.

She said it was vital to ensure that any steps taken to combat extremism were proportionate and effective.

"We have a number of concerns about how requiring charities to declare overseas sources of funding will give useful information to the Charity Commission and help law enforcement," she said. "It is important that the desire to do something does not lead to us wasting resources that could be better used.

"There has been no public discussion about this change, as there has been in the past with other specific measures proposed by the commission for the annual return.

"It is important that there is a full consultation before this measure is introduced so that the right decisions are made."

Rudd told MPs that the Home Office review had found that some Islamic extremist organisations "portray themselves as charities to increase their credibility and to take advantage of Islam’s emphasis on charity".

Some were also "purposefully vague about their activities and their charitable status", she said.

Rudd said the government had chosen not to publish a report on the findings of the review – which was started in 2015 – because of security concerns.

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