The Law Commission published its report on Technical Issues in Charity Law in September 2017 following a public consultation which revealed that many charities struggle with a range of technical issues in the law leading to unnecessary expense and preventing charities from dedicating their full resources to the public good.

Highlighted problems included the law concerning the complexity of amending governing documents, lack of flexibility regarding the disposal of charity land and use of permanent endowment and the varying criteria for deciding changes to a charity’s purposes.

The Technical Issues in Charity Law report made a number of recommendations aimed at maximising the efficient use of charitable funds whilst ensuring proper safeguards for the public.

On 22 March 2021, the Government published its long-awaited response to the Law Commission’s recommendations. The Government summary says it has accepted most of the recommendations (36 of the 43 recommendations (one in part)) and it will look to bring forward legislation to implement these recommendations when Parliamentary time allows.

The recommendations and the Government’s comments are covered in 12 parts and deal with the following areas:

  • Financial thresholds for charity registration
  • Changing purposes and amending governing documents
  • Charities governed by statute or Royal Charter: changing purposes and amending governing documents
  • Cy-près schemes and the proceeds of fundraising appeals
  • Acquisitions, disposals and mortgages of charity land
  • Permanent endowment
  • Remuneration for the supply of goods and the power to award equitable allowances
  • Ex gratia payments out of charity funds
  • Charity and trustee insolvency
  • Charity names
  • The identity of a charity’s trustees
  • The Charity Tribunal and the courts

Over the next few weeks, our charities team will be bringing you a series of e-briefings on the changes to be implemented and letting you know how they might make the life of a charity trustee a little bit easier.

For more information

If you have any questions do contact your usual contact in our charities team or Catherine Gibbons.

The full list of our series of ebriefings can be found below: