Memorandum from BOND (DCH 281)
ABOUT BOND
BOND (British Overseas NGOs for Development)
is the United Kingdom's broadest network of non-governmental organisations
(NGOs) working in international development and development education.
BOND was founded in June 1993, on the initiative of 61 NGOs, and
now has over 280 members. It is officially recognised by the Department
for International Development (DfID).
INTRODUCTION
BOND is a member of the Coalition for a Charities
Act headed by NCVO and supports the objectives of this coalition.
We want to see a universal public benefit test, a clearer role
for the Charity Commission that stresses its regulatory functions
and limits its advisory role, and an independent appeals tribunal
for contested Charity Commission decisions.
We welcome the publication of the draft Bill.
The need to create a modern regulatory framework that will enhance
public understanding of, and confidence in, charitable organisations
has never been greater. For many NGOs, as unusual and diverse
members of the UK voluntary sector, the Bill is an opportunity
to broaden and strengthen definitions of what constitutes "charitable
activity".
BOND would like to ensure that the draft Bill
does not expand the regulatory burden on charities, with all charities
subject to reporting and accounting requirements that are proportionate
to their size.
THE MEANING
OF "CHARITY"
AND "CHARITABLE
PURPOSE"
BOND supports a definition of charitable purposes
that reflects changing public perceptions of charity and provides
scope for the possibility of new charitable purposes to be recognised
in the future. The draft Bill largely meets this aim, but it is
important that the courts are given the power to grant charitable
status to organisations that may not be able to draw an analogy
with existing charitable purposes but that nevertheless provide
a clear public benefit.
DEFINITION OF
PUBLIC BENEFIT
BOND welcomes the removal of the presumption
of public benefit. We believe that all charities must demonstrate
that their purposes are for the public benefit on an ongoing basis,
not just at registration.
We welcome the resolve to determine public benefit
by reference to common law. This will ensure that it can accommodate
both the present and future diversity of the voluntary sector
and remain free from political interference.
However, we share NCVO's reservations about
attempts elsewhere in the draft Bill to provide an alternative
definition of public benefit. The third regulatory objective for
the Charity Commission"to enable and encourage charities
to maximise their social and economic impact"currently
goes beyond any legal requirement placed on charities and distracts
from their primary purpose, which should be to maximise public
benefit. An organisation able to maximise its social and economic
impact might not necessarily be able to demonstrate public benefit
and vice versa. For many organisations, any economic impact is
likely to be incidental to their work. This objective could come
to be used in time as a definition of public benefit. The Commission's
existing objective of "promoting the effective use of charitable
resources" is much more appropriate.
BOND member organisations strive to adhere to
a common Statement of Principles that includes establishing equality
of opportunity in policy and practice. BOND would support a clause
in the draft Bill ensuring that non-discrimination is a precondition
of charitable status by making equal opportunities in charities'
employment and service provision policies mandatory.
THE CHARITY
COMMISSION
BOND is concerned that the Bill provides no
statutory distinction between the Commission's various functions
as registrar, regulator, adviser and supporter of charities. This
is relevant given the Strategy Unit's original recommendation
that the role of the regulator be more clearly defined, with a
stronger focus on its regulatory function. The draft Bill actually
expands the Commission's advisory role, extending its power to
give advice and guidance in chapter 5, clause 20, and giving it
the general function of "facilitating the better administration
of charities" in chapter 1, clause 5.
It would be better if the general advisory and
support functions were independent of the Charity Commission and
carried out by sector umbrella and resource bodies, leaving the
Commission free to concentrate on its "watchdog" objectives
and regulatory advice.
There is no statement in this part of the Bill
explicitly requiring the Commission to act with proper principles
of substantive and procedural fairness, in accordance with the
Human Rights Act and the rules of natural justice.
BOND welcomes the creation of a Charity Appeal
Tribunal as a meaningful and affordable means of independently
scrutinising Commission decisions. However, there is no provision,
as suggested by the Strategy Unit Report, to ensure the Commission
has a clear and streamlined internal appeal procedure as well.
OTHER CLAUSES
BOND welcomes the clauses on the registration
of charities, on charitable incorporated organisations, on the
remuneration and liability of trustees, on charitable collections
and on mergers. Proposals for the regulation of fundraising describe
reserve powers for the Secretary of Statewe would welcome
more clarity on the criteria on which the decision to invoke reserve
powers would be based.
July 2004
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