The Charity Commission has issued guidance about changes to charity law that are being introduced in England and Wales under the terms of the Charities Act 2022.
The changes, which will take effect over the course of the next 12 months, are a response to recommendations made by the Law Commission.
They are designed to simplify certain regulatory requirements and to give trustees more flexibility when managing their charity.
The Act also gives charities new powers to buy goods from trustees. Currently, charities can pay their trustees for services (over and above the normal trustee duties) and for goods supplied in connection with those services, but they cannot pay trustees for supplying goods only.
Following the implementation of the Act, this will be permitted as long as certain procedures are followed.
The Act has also introduced simpler and more proportionate rules on failed fundraising appeals.
Under the new rules, if a fundraising appeal raises too little money, the charity will be able to spend donations below £120 on similar charitable purposes without needing to contact individual donors for permission.
The complexity surrounding what trustees must do if a fundraising appeal raises too much or if donations can’t be used as intended has also been simplified.
In addition to these key changes, the Act makes wide ranging technical reforms to charity regulation on a range of issues.
For example, it reduces the legal restrictions on how charities can use permanent endowments, and trustees will be allowed to borrow up to 25 per cent of the value of their permanent endowment funds without approval from the Charity Commission.
Furthermore, the reforms will allow trustees to access a wider range of professional advisers on the sale of land and make it easier for charities to amend their governing documents or Royal Charters.
It also gives the Charity Commission new powers to instruct a charity to change its name in certain circumstances and to ratify the appointment of a trustee where there is uncertainty about whether the appointment is valid.
Under consideration, but without a planned implementation date, is a new power for charities to make small ‘ex gratia’ payments (i.e., payments that are not made as part of the charitable work of the charity but which the trustees wish to make) without prior approval from the Charity Commission.
Read more about the changes at: https://www.gov.uk/guidance/charities-act-2022-guidance-for-charities and https://www.gov.uk/guidance/charities-act-2022-implementation-plan
