'Public benefit' prevails in UK charity law reform

Community Action, June 14, 2004

LONDON, UK -- The British Parliament is now considering a bill which will be the most important change to charities legislation since the reign of Queen Elizabeth I. The new law will define charity in relation to "public benefit" and offers a 12 point criteria for charity.

According to many commentators the motivation of the goverment is based on these concerns and interests:

* most of the funding of charities is or will shortly be from goverment sources;

* the government envisions a larger role of charties in delivering public services;

* the government sees wider social and economic roles for charities;

The bill sets out 12 charitable purposes:

* prevention and relief of poverty;

* advancement of education;

* advancement of religion;

* advancement of health;

* advancement of citizenship or community development;

* advancement of arts, heritage or science;

* advancement of amateur sport;

* advancement of human rights, conflict resolution or reconciliation;

* advancement of environmental protection and improvement;

* relief of those in need, by reason of youth, age, ill-health, disability, financial disadvantage or other disadvantage;

* advancement of animal welfare; and

* purposes recognized under existing charity law.

The status of the 150 year old English Charities Commission will also change. It will be on a statutory basis for the first time, with a clear regulatory role and will have these functions:

* increasing public trust and confidence in charities,

* increasing charities' compliance with their legal obligations,

* increasing charities' accountability to the public, and

* maximizing their economic and social impact.

An independent charity appeals tribunal will be established to rule on challenges to Commission decisions.

Smaller charities with incomes of less than 5,000 [pounds sterling] a year, rather than 1,000 [pounds sterling] a year--will no longer have to be registered, although they can choose to do so.

The charitable status of private schools and private hospitals will be considered in relation to the public benefit.

The Bill in Parliament applies to England and Wales only. The Scottish Executive is expected to enact a similar charity reform law.