[Fsfe-uk] Rules and Structure

[John Seago]

Having raised the matter of the Rules and Structure, the following may be 
of some interest to the AFFS. I have taken it from the Unitarian Mailing 
list, and being unsure of the copyright position reproduce it in its 
entirety.

Provisions of New Charity Law - Long
Date: Thu Jul 17 10:37:29 2003
From: address@hidden (Steve)
To: address@hidden
Reply to: address@hidden

The Home Secretary yesterday released a new report which 
represents this government's intentions as to the content of 
the proposed new Charity Law. Unitarians should take note of 
this and continue to track developments because it 
is likely to have a signficant effect both on the Unitarian 
movement and on the work of the General Assembly.

It was released in the form of a report titled CHARITIES AND 
NOT-FOR-PROFITS: A MODERN LEGAL FRAMEWORK. It forms the 
response of this government to the review by the Strategy 
Unit titled PRIVATE ACTION, PUBLIC BENEFIT (published Sept 
2002) and to the comments made by respondents to the public 
consultation on the Strategy Unit report.

Although draft legislation has not yet been prepared, the 
report released yesterday is a statement of government 
policy and indicates the provisions this governments intends 
to include in the new Charities Act. There is likely to be 
some fine-tuning and adjustment in what actually emerges as 
law, but for planning purposes this is a pretty good 
indication of the form and shape of the new law to come.

The report deals with 61 recommendations and I only intend 
to mention here the ones of particular and immediate 
interest to the General Assembly and its associated bodies. 
The full report can be read and/or downloaded from: 
http://www.homeoffice.gov.uk/comrace/active/nfps/index.html
and you may wish to review the other provisions.

1. The new Charity Law will include a new statutory 
definition of Charity which is expected to include all the 
existing types of charitable purpose and sone new ones. 
Relevant to us is that the advancement of religion will 
continue to be a charitable purpose.

2. The public benefit requirement will also become a 
statutory definition rather than a common law definition. It 
will not be presumed that any particular type of charity, 
such as religious organisations, are automatically of public 
benefit. Further the Charity Commission will be required to 
make ongoing checks to ensure that charities continue to 
meet the definition of public benefit. Although the power to 
remove charitable status on these grounds will be in the 
law, the intention is to encourage "under-performing" 
organisations to develop their performance rather than 
immediately losing charitable status.

3. A new legal form known as the Charitable Incorporated 
Organisation (CIO) is to be introduced. This is expected to 
replace the present Charitable Company Limited by Guarantee 
provision, although both systems will be available for at 
least five years and Charitable Companies will not be 
required to adopt the new arrangements during that period 
unless desired. The CIO form of organisation will have the 
benefits offered by being a coporate body, without the 
srawbacks of the present arrangments. For example, CIOs will 
not need to file with Companies House, will not be subject 
to Company Law and their governance documents will be in 
plain english. Obviously Unitarian bodies currently 
organised as Charitable Companies are likely to find much of 
value in this new arrangement. It may also be a desirable 
arrangement for bodies not currently incorporated such as 
some Districts and perhaps even for the General Assembly 
itself or some of its units.

4. One of the many signficant changes proposed is the 
introduction of the statutory power to pay individual 
trustees to provide a service to a charity (outside their 
duties as a trustee) if they reasonably believe is to be in 
the charity's interests to do so. This will offer 
considerable flexibility particular to smaller charities 
such as us. There will be some safeguards to prevent misuse 
such as a limit on the number of trustees that can be paid 
in this way and/or a limit on amounts.

5. Trustees of non-incorporated bodies will continue to be 
personally liable but there will be a new provision that 
charity trustees will be able to apply to the Charity 
Commission as well as the court for relief from personal 
liability for breach of trust where they have acted honestly 
and reasonably. This is to respond to some trustees fears 
over personal liability and should mitigate the push for 
trustee indemmity insurance which is of limited value.

6. The income threshold before a full professional audit is 
required is to be increased to 500,000 pounds and an asset 
value threshold is to be introduced as well. The likely 
outcome of this is that some of our Unitarian bodies 
prsently audited may elect to change to independent 
financial examination which costs less and may be a 
sufficient level of review in most situations.

7. There is to be an independent tribunal to which decisions 
of the Charity Commissions can be appealed without needing 
to go to the High Court.

8. Charities  with incomes of 5,000 pounds or less (and note 
we are referring to income not assets) will not be required 
to register with the Charity Commission, but will be 
entitled to register if they wish to be known as a 
registered charity.

9. As expected, the provision for excepted charities (which 
is the arrangement under which many of our organisations are 
not separately registered) is unltimately to be withdrawn.

Interestingly, the Home Office reports that support for 
ending excepted status was very strong from respondents who 
were not themselves excepted charities and that ending this 
status was opposed by those bodies who are or supervise 
excepted bodies on the grounds that:
- there have been no organisational problems or regulatory 
failures to justify closer regulatory oversight
- many small church charities have constitutions that would 
not meet the Charity Commission's current standards for 
registration
- the bureaucratic burden would increase following 
registration, making it more difficult to attract competent 
treasurers and other volunteers.

However there is likely to be a considerable and lengthy 
period before the present arrangements will end. The new law 
is to contain a continuing but time-limited exception for 
currently excepted charities with an income of 100,000 pouds 
or below (which will cover most of our bodies). Special 
arrangements will be devised for the orderly registration of 
different groups of excepted charities - over a period of 
time - aiming to:
-avoid adding unduly to bureaucratic burdens
-allow charities to preserve the relationships that 
currently exist between parent and subsidiary charities or 
between members of federated or similarly-constructed 
networks.

The Administation Commission and the GA Council will need to 
consider what recommendation to make to currently excepted 
Unitarian charities in the light of these developments. 
Encouraging them to register now may not be helpful advice 
because:
- the new arrangements for registation alluded to above will 
not be more rigorous than the present ones and are likely to 
be more user-friendly for our organisations
- as arrangements for orderly and manageable registration 
are to be put in place, the already overburdened Charity 
Commission would not be likely to appreciate a sudden flood 
of registration requests.

Well, there are the top nine intended changes that will 
probably most effect our bodies, although there are another 
50 some changes as well covering areas such as fundraising, 
campaigning by charities, the nature and operation of the 
Charity Commission, etc. The impact of what will be a 
signficant new piece of legislation is likely to transform 
the non profit sector to a far greater extent than that of 
the last round of legislation in 1992 and 1993. For more 
information - read the report and the watch this space.

If anyone has any questions or wishes more information about 
any of this, I will do my best to respond.

-- Steve


-- 
(Rev) Steve Dick, London & South East Unitarians District 
Minister
Phone: (020) 8407 1135  Fax: (020) 8656 5190
Email: address@hidden
__________________________________________________________

It also occures to me that organisations such as the above, and other 
charities with which members have contact may be targets for help with 
their IT needs which AFFS can provide. I lack the expertise in the 
required sphere of activity to commnet further.
-- 
John Seago