DCH 171 The National Trust
DRAFT CHARITIES BILL
A submission by the National Trust to the
Joint Parliamentary Committee
June 2004
1. The National Trust welcomes publication of
the draft Charities Bill and the opportunity to contribute to
the Government's approach in this area. The National Trust is
the country's second largest charity (measured by voluntary income)
and has extensive experience to bring to bear on the development
of policy and legislation for charities and the voluntary sector.
We are a large and complex conservation organisation with over
3.3 million members, over 4,500 staff and a £300m turnover
working across England, Wales and Northern Ireland. The Trust
is also undertaking a review of its own governance in parallel
with the work being undertaken on the Bill.
2. We welcome the overall approach of the Bill
and the bulk of its clauses. The Trust recognises the need to
update much of the legislation governing charities and to recognise
their growing, increasingly diverse and important role in society.
We welcome the Government's commitment in this area. It will
be essential that changes are made in ways that both retain the
best elements of the charitable and voluntary sector ethos and
strengthen the role of the charitable and not-for-profit sector
in civil society. This should recognise the role of charities
in contributing to public policy objectives as well as supporting
their contribution in service delivery and as social enterprises.
We also welcome the Government's overt support for, and the recent
draft Charity Commission guidance on, the campaigning role of
charities. Charities play an essential part in civil society
in educating and informing political and other decision makers
and advocating the case for change within their charitable purposes
and without breaching the principle of political neutrality.
Content of the draft Bill
3. The Trust has particular comments on the proposals
to:
Change the list of charitable purposes
(Clause 2) - we welcome the broader definition of public benefit
purposes proposed and particularly welcome inclusion of "advancement
of environmental protection and improvement" and "advancement
of the arts, heritage or science" as explicit purposes.
We are disappointed the Strategy Unit's support for "culture"
is not now included on the face of the Bill
Reforming the Charity Commission
(Clauses 4-6) - we welcome the Bill's establishment of the Charity
Commission as an entity and the greater clarity it brings to its
role. The Trust believes there are limits to the way in which
the Commission can play the role of both regulator and advisor
to the sector and would encourage the Committee to examine what
other measures are needed to complement the Commission in charity
capacity building. The Trust has good relationships with the
Charity Commission in its regulatory role but recognises that
experiences vary. The proposal for an independent Charity Appeal
Tribunal able to review Charity Commission decisions has merits
but it will need to operate with safeguards that prevent both
the affected charity and the Charity Commission spending considerable
amounts of time dealing with spurious complaints about minor issues.
Large membership organisations can spend an inordinate amount
of time and charitable funds on frivolous issues and the Lord
Chancellor's rules will need to address this.
Charitable Incorporated Organisations (Clause
26, Schedule 6) - the Trust is unusual in its role as a statutory
charity and so already has an established legal form. We are
increasingly working, however, in partnership with other organisations
and local communities and therefore welcome the scope for establishing
new legal forms which might be more suitable to this kind of activity,
including in our role as a social enterprise.
Regulation of fundraising
(Clause 36) - the Trust recognises the critical importance of
retaining and developing public confidence in charities and that
this should not be compromised by fundraising activity. We are
an affiliated member of the Institute of Fundraising and we support
and abide by the Institute's existing Codes of Practice and Donor
Rights Charter and believe the Institute has an important role
to play in setting fundraising standards. We welcome the Government's
decision not to introduce statutory measures to regulate good
practice in fundraising and would welcome a clear exposition of
the criteria that the Government would use in determining whether
it is "necessary or desirable" to make regulations
under this Clause.
Public charitable collections
(Clauses 37-43) - the Trust has made detailed representations
to the Government on its approach to increasing regulation of
public charitable collections as expressed in these clauses. We
support the need for greater safeguards to prevent potential public
nuisance arising from collections and the Government's objective
of maintaining public trust in the sector. We have serious concerns,
however, about the impacts of the proposals. These could be far
more wide ranging than either the Government might intend or the
evidence of problems would support. We believe some aspects could
impact seriously on the sector and the level of public giving
and make some suggestions for an alternative way forward. It
is also anomalous to extend licensing to charity fundraising and
recruitment activity in public places when commercial operators
- such as motoring organisations - will remain exempt. The case
for extending licensing arrangements to workplace giving is particularly
weak. Charity fundraising and recruitment in the workplace only
occurs after careful and sensitive negotiations with the relevant
business and we can see little added benefit and significant unnecessary
administrative and regulatory burdens resulting from this proposal.
The proposals could also undermine the socially responsible charitable
culture many companies are seeking to develop through matched
giving, employee involvement, and workplace giving.
Membership recruitment and fundraising through face
to face contact with the public is essential to the National Trust.
It provides an important means of gaining public support and
generating income for meeting our charitable purposes. The Trust
is the largest conservation organisation in Europe and has over
3.3 million members. During peak periods in 2003 we were recruiting
at a rate of one new member every 42 seconds and given the need
to replace members who leave or die this is essential to ensure
a slowly growing membership and supporter base. 20,000 people
are recruited face to face each year on Trust land with open public
access, usually in countryside locations or car parks, and 35,000
are recruited face to face off National Trust properties, usually
in town and city centres and on private land such as supermarkets.
We estimate recruitment in these locations provides around £1.2m
of the Trust's income- this is equivalent to 42% of our budgeted
annual operating surplus for 2003/4. The "lifetime value"
of subscriptions from recruitment at such sites to the Trust is
approximately £19m and subscription income is the single
most important source of operating income on which the Trust depends
to undertake its charitable work.
Face to face recruitment is, therefore, vital to
the Trust in achieving its charitable purpose on behalf of the
nation. We operate as a major social enterprise with a £300m
turnover and a strategy for re-investing our income in order to
achieve our statutory and charitable purpose, namely to look after
special places for ever, for everyone. The Trust provides well-recognised
public benefits from its activity in protecting the natural and
historic environment and providing public access. This includes
being guardian of over 300 historic houses, 620,000 acres of countryside,
600 miles of coastline, gardens and other places of historic interest
or natural beauty. We also play a well less recognised but equally
important economic and social role. Direct benefits include an
estimated 5-9 additional full time equivalent jobs being generated
by each National Trust job and our role as the provider of one
of the nation's largest out-of-school classrooms with over 500,000
education visits each year. Indirect benefits include the fact
that an estimated 60-70% of rural tourism depends on the sort
of high quality environment that the Trust helps to provide.
The Trust is unconvinced that the scope of the proposed
new licensing arrangements should be so widely drawn and seeks
smarter regulation and stronger safeguards against potential abuse.
We have considered the proposals against the framework of Government
support for better regulation and support for the charity sector.
We recognise and agree with the need for regulation that deters
"bogus collections" and avoids "public
nuisance". We have no evidence that this is an issue
on much of the land which the draft Bill proposes making subject
to new licensing arrangements. We welcome the exclusion of the
provisions in relation to fundraising and recruitment by charities
on their own land (Clause 37, new Section 65A(1)(c)). Indeed,
there could be no grounds on which consent could logically be
withheld (since the charity would by definition be a "fit"
organisation and it would be responsible for "capacity"
on its own land).
The Trust is also positively welcomed into some town
centres where its information displays and recruitment activity
is seen as a boon. Indeed, our recruitment activity is an active
way of engaging with local communities and taking our conservation
messages to a wider audience. This was particularly evident during
foot-and-mouth when the public feedback suggested the Trust's
presence in town and city centres was both reassuring and provided
a means for people to express their support for rural areas suffering
as a result of the outbreak. Unlike many others the Trust does
not use commercial fundraisers in its work and those undertaking
the recruitment do not receive financial or other incentives for
their work.
We have significant practical concerns about the
scope of the regulations, their implementation and the lack of
effective appeal mechanisms or safeguards against abuse. The administrative
costs of the new system for the Trust will also be very significant.
We estimate it could involve as many as 2,100 licence applications
a year in the 3 regions where the Trust is most active and this
could grow significantly to over 6,000 if we extended our activity
in this area England-wide. We seriously question the value of
this use of charitable funds given the lack of evidence of any
public concern about our fundraising activities.
In commenting on the proposed legislation we believe:
Public places - there
is a longstanding definition of "public places" which
has been developed through case law, precedent and primary legislation
(most recently through the Countryside and Rights of Way Act
2000) which should not be amended through these proposals.
Specifically, we do not support the extension to privately owned
land that provides access to facilities such as supermarkets and
railway stations. One possible perverse impact of the proposals
could be to encourage fencing off some places so that they would
not be subject to licensing requirements because this would give
control over access.
Certificate of Fitness
- the proposals place significant additional regulatory burdens
on local authorities. We can see no reason for duplicating the
role played by the Charity Commission in regulating the sector
and believe the only requirement for local authorities to consider
before issuing a Certificate of Fitness (Clause 40) should be
to check the validity of a charity's registration. Registered
charities should also not be required to make reports to the lead
authority or licensing authority on completion of fundraising
when such details will be made available to the Charity Commission
on an annual basis.
Permits - The Trust believes
further safeguards are needed to guide local authorities role
in licensing and avoid perverse or arbitrary decisions. In our
experience local authorities have markedly different attitudes
to fundraising activity in their area. Levels of activity deemed
entirely acceptable in one authority are deemed unacceptable in
another even where the circumstances are similar, and some authorities
are notably more sympathetic to local charity activity than national.
Over and above a duty for local authorities to provide fair access
we believe further guidance from the Secretary of State is needed.
We are similarly concerned that the only right of appeal is through
the magistrate's court and would recommend introduction of a simple
administrative appeal system.
Charging - we welcome
the fact that there are no proposals to charge for certificates
of fitness or permits. We have been concerned by suggestions
at some of the consultation meetings on these proposals that charging
is being considered. The financial and administrative burden
on an organisation like the National Trust operating across potentially
every local authority would be immense.
Other issues
5. We have two further issues of interest which
relate to matters not addressed in the Bill:
Option to remove the need for a separate trading
company - we are disappointed that the
Government has not responded positively to the Strategy Unit recommendation
to allow charities the option of undertaking trading without the
need for a separate trading company. The Trust's trading company
- National Trust Enterprises - turns around £50m per year
and contributes over £16m to our General Funds each year.
We can see distinct potential advantages in allowing us better
to achieve our statutory charitable purposes by removing practical
difficulties, such as internal "arms length dealing",
between the National Trust and National Trust Enterprises and
potential liability for rates on National Trust Enterprises outlets
within National Trust properties. We believe charities themselves
are best placed to decide how such arrangements should be organised
and we recognise that there can be benefits in insulating the
charity from some trading company activity. We do not accept
the Government's view that trading within a charity could result
in unfair competition with commercial operators. Indeed, we would
expect to have seen more positive support for the development
of social enterprises in this way precisely because they bring
wider public benefits.
Land disposal - We would
also highlight the National Trust's particular interest in changing
the charity acts in relation to the disposal of land. This has
not been addressed by the Strategy Unit or in the draft Bill.
Current regulations appear to be designed for charities with
small landholdings for whom disposals are an exceptional event.
The Trust manages a diverse and changing estate of over 250,000
hectares and the rules are particularly ill suited to dealing
with the letting and sale of land on a regular basis.
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