Charities Bill announced in Queen’s Speech viewed as vital by Charity Commission

The Charity Commission has welcomed the inclusion of the Charities (Protection of Social Investment) Bill in the Queen’s Speech today. The purpose of the Charities Bill is to protect charities from abuse by strengthening the powers of the Charity Commission and enabling charities to more easily undertake social investment through investing their funds in a way that furthers their charitable purpose and provides a financial return.

The Charities Bill seeks to extend the automatic disqualification criteria from charity trusteeship and extend disqualification to senior management so that charities are better protected from abuse. Additionally, the Charity Commission would have strengthened powers enabling it to:

  • Direct that a charity be closed after an inquiry;
  • Issue official warnings to charities;
  • Disqualify a person who is unfit to serve as a trustee in certain circumstances; and
  • Address some existing gaps and weaknesses in the Charity Commission’s existing powers.

Upon the recommendations of the Law Commission, the Charities Bill would also give charities a new specific and simple power to make social investments and clear duties when doing so.

According to the Charity Commission, one of the shortcomings of the current charity law is that a charity trustee can resign and become a trustee or a senior member of staff in another charity, without the Commission having the power to prevent this from happening. By giving additional powers to the Charity Commission to deal with this situation, as well as issue formal warnings to charities, the Commission believes it will be able to reduce abuse in the charity sector. William Shawcross, Chairman of the Charity Commission in welcoming the Charities Bill said that “this is a vital piece of legislation if we are to have the powers that we need to stop individuals abusing charities. We must be able to take action where abuse occurs. The public, who give so generously of their time and money, would expect nothing less. This Bill is also good news for charities wanting to make social investments”.

Further details about the Charities Bill can be found in the Background Brief from the Prime Minister’s Office and on the Charity Commission website. Additionally, if you require advice on charity governance or social investment please contact Daniel Milnes.

Nat Avdiu

About Nat Avdiu

Nat Avdiu is a Paralegal in the Contracts and Projects team at Forbes Solicitors. Nat provides updates for clients on a range of issues including: governance, data protection and freedom of information, procurement and charity law.
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