Charity Commission for England and Wales

Definition

To establish a charity, an organisation must first find at least three trustees who will be responsible for the general control and management of the administration of the charity.^[3] The organisation needs to have a charitable purpose that helps the public. Afterwards, the administration must select an official name and decide on a structure for the charity that will impact aspects such as who runs the charity and how it is run.^[4] Subsequently, the creation of a governing document that explains how the charity is run is required.^[5] Finally, an electronic application must be completed if the charity’s income is at £5,000 per year, or it is a charitable incorporated organisation (CIO). There are different rules for creating a charity in Scotland and Northern Ireland.^[6]

Exempt, excepted, and other non-registered charities

Some charities are not subject to regulation by or registration with the Charity Commission, because they are already regulated by another body, and are known as exempt charities. Most exempt charities are listed in Schedule 3 to the Charities Act 2011, but some charities are made exempt by other acts. However exempt charities must still comply with charity law and may approach the Charity Commission for advice.

Some charities are 'excepted' from charity registration. This means they do not have to register or submit annual returns, but are in all other respects subject to regulation by the Charity Commission. A charity is excepted if its income is £100,000 or less and it is in one of the following groups: churches and chapels belonging to certain Christian denominations (until 2031); charities that provide premises for some types of schools; Scout and Guide groups; charitable service funds of the armed forces; and students' unions.^[7]

Charities operating across other national borders within the United Kingdom

Registration of a charity in England and Wales does not endow that status elsewhere, thus further registration has to be made before operating in Scotland or Northern Ireland.

Charities in Scotland are regulated by the Office of the Scottish Charity Regulator.

In Northern Ireland the Charity Commission for Northern Ireland was established in 2009 to replace earlier regulation by the Voluntary and Community Unit of the Department for Social Development, part of the Northern Ireland Executive.

Governance

The principles of good governance, to be followed by charities in order for them to be able to achieve and maintain charitable status, are laid down in the Charity Governance Code, published by the Charity Governance Code Steering Group.^[8]

There are two separate codes for small and large charities. The Charity Commission is not part of the Charity Governance Code Steering Group, only an observer, to ensure impartiality. The principles covered in the code are:

If a member of the public, or any of a charity's trustees have serious concerns, for example, whether funds are being used for the stated purpose of the charity, or if there is a serious threat to its reputation, or they do not like how they have been approached for donations,they can submit a complaint to the Charity Commission.^[9] Depending on how serious the complaint is, the Charity Commission will either recommend specific procedural improvements, require the expulsion of unsuitable trustees, or remove the organisation's charitable status altogether.

Establishing law

The Charities Act 2006 requires the Commission to be operationally independent of ministerial influence or control. Members of the commission, including the chair, are appointed by the Secretary of State for Culture, Media and Sport.^[10]

Charity tax law

The Finance Act 2010 extended charitable tax benefits (for example Gift Aid) to charities within EU member states, Norway and Iceland, rather than those just inside the UK.^[11]

Fundraising Regulator

In 2016, following the Olive Cooke scandal, the British fundraising regulatory landscape underwent a review, leading to the establishment of the Fundraising Regulator. The Fundraising Regulator is an independent oversight body without statutory authority. It serves as the regulatory authority for charitable fundraising, responsible for defining and promoting fundraising standards. Additionally, it investigates cases, addresses public complaints related to fundraising practices, and operates a fundraising preference service. This service allows the public to control how charities contact them.^[12]

Regulatory action

The commission carries out general monitoring of charities as part of its regular casework. In serious cases of abuse and regulatory concern, the commission has powers outlined in the Charities Acts to conduct statutory investigations. Before taking the decision to open a statutory inquiry, it will take the approach set out in its Regulatory and Risk framework.^[13][14] The commission, therefore, began around 2007 to carry out an intermediate form of action described as regulatory compliance investigations. In 2010 it opened over 140 of these cases, compared to just three full statutory investigations. However, the legality of these actions was debatable as they lacked a statutory basis. A high-profile example was the commission's report into The Atlantic Bridge, after which that body was dissolved in September 2011. The commission announced in October 2011, in the context of cost-cutting and a re-focussing of its activities, that it would no longer carry out regulatory compliance investigations.^[15][16]

In 2012, the commission refused to grant charitable status to Plymouth Brethren Christian Church, stating that it was unclear whether the body's aims were compatible with the requirement for charities to have a public benefit. The commission stated that this was called into doubt as a result of the "exclusivity" of the body.^[17] The decision was discussed at a session of the Public Accounts Committee, during which MP Charlie Elphicke accused the commission of being "committed to the suppression of religion". The decision was later reversed by the Commission.^[18]

Between 2022 and 2023, the commission removed 4,146 charities from the register and concluded 5,726 regulatory action cases (includes 68 statutory inquiries).^[2]