DCH 248 Association of medical research
CHARITIES
Exempt Charities
Working group
discussion paper
FEBRUARY 2004
Association of medical
research CHARITIES (DCH 248)
Exempt Charities
Working group
discussion paper
1 Aim
and origin of paper
The aim of this consultation document
is to facilitate discussion and debate amongst key audiences on
the issue of exempt charities and the related recommendations
in the Strategy Unit report and in the Home Office response.
The paper has been produced by an informal working group drawn
from sectors that have an interest in the issue. Members of the
working group are listed in Appendix 1.
The working group will consider responses
to the consultation on this paper with an aim of preparing a report
which it is hoped will assist the Home Office in developing appropriate
solutions for inclusion in any new charities legislation.
The paper covers England and Wales
only since in Scotland and Northern Ireland there is no register
and the concept of 'exemption' rests on the existence of a register.
However, the concepts explored have implications for Scotland
and Northern Ireland as proposals for charity regulation are explored
in those Nations.
2 What
are exempt charities?
Exemptions were initially introduced
in s62 of the Charitable Trusts Act 1853 and included the universities
of Oxford, Cambridge, Durham and their colleges; London University;
certain religious institutions; the Church Commissioners; the
British Museum; and, friendly and benefit societies. Winchester
and Eton were added to the list in 1855 and almost all universities
followed via private acts, along with a limited number of other
institutions inserted by public acts or church measures. The list
of exemptions was largely preserved in Schedule 2 of the Charities
Act 1960, though ecclesiastical corporations were removed form
the jurisdiction of the Act altogether, while registered places
of worship were removed from the exempt category and dealt with
elsewhere.
These exemptions were repeated in Schedule
2 of the Charities Act 1993 with a number of additions (mostly
relating to organisations created out of the Education Reform
Act 1988) and some further additions and clarifications. No charity
that has been granted exemption in the past has had this removed.
Since 1 September 1992, exempt charities cannot register on a
voluntary basis and the voluntary registration of any exempt charity
prior to this date also ceased to have effect. A full list of
exempt charities can be found in Appendix 2. In reality,
the number of exemptions goes beyond this because Schedule 2 also
grants exemption to any subsidiary institution which has a sufficiently
close administrative connection and purpose to that of an exempt
institution. Any common investment or deposit fund under s24 of
the 1993 Act which admits only exempt charities also qualifies
as an exempt charity.
When the 1960 Act was drafted, there
appears to have been little inclination to change the existing
exemptions. However, the Report of the Nathan Committee, which
provided the basis for the legislation, discusses exemptions in
two distinct groups: those charities exempt by name or reference
to their purpose (including the exemptions that now feature in
Schedule 2 of the 1960 and 1993 Acts) and those exempt by reference
to the terms on which they are financed.
In relation to the first grouping,
the 1960 Act makes no radical changes. The rationale for the existing
exemptions (and their preservation) appears to have been that
there was sufficient provision elsewhere for the supervision and
control of these charities and regulation by the Commissioners
would be 'superfluous'. Reference is also made to the 'special
standing' of such charities (particularly the Universities) and
them having some form of accountability by virtue of being 'in
the public eye'.
The second grouping was outside the
terms of reference of the Nathan Report but the Committee nevertheless
saw fit to consider it. In fact, the issue remains to be resolved.
The Charity Commission's present-day jurisdiction over a charity
depends on it having assets which are held by the charity on charitable
trusts. It is questionable whether this property-focused concept
is appropriate given that many functional charities operate on
the basis of donations coming in during the year of expenditure
and have no real endowment at all.
2.1 Numbers of Existing Exempt Charities
Exempt charities exist in a range of
settings and almost always alongside similar charities that that
are not exempt. At the start of the working group's discussions
no organisation appeared to have complete data on the number of
existing exempt charities. The lists in Schedule 2 to the 1960
and 1993 Acts include both categories of exempt charities and
individual named institutions. Therefore it is difficult to quantify
how many charities are covered - the 1960 Act includes a list
of 7 institutions and categories while the 1993 Act includes 27
institutions and categories. The Charity Commission web site
lists 274, though some of these are also categories. After the
working group's research the attached Appendix lists nearly 300
individual organisations and several classes of organisation (for
which exact numbers are not known) that are exempt from registration
with the Charity Commission.
Exploring this list, some of the important
sub-sectors of exempt charities include the majority of universities
and colleges of higher education, and the colleges at Oxford,
Cambridge and Durham. Exemptions of specific universities are
included in Schedule 2 and this category is made somewhat open
ended by the inclusion of any university, university college,
or connected institution declared exempt by an Order in Council.
Some museums, galleries and public gardens are exempt and there
are also a few 'one offs' such as the British Library, and the
Church Commissioners.
Paragraph (w) of Schedule 2 to the
Charities Act 1993 includes, amongst exempt charities "any
institution which is administered by or on behalf of an institution
included above and is established for the general purposes of,
or for any special purpose of or in connection with, the last-mentioned
institution." Within higher education this might include
special appeals, separate institutes or students' unions. HEFCE
has recently undertaken a sample survey of higher education institutions
with the aim of identifying how many such charities exist within
that sector. Museums also tend to have a significant number of
such connected charities associated with them. Although there
may not be as many within the other exempt sub-sectors, they are
by no means rare.
Industrial & Provident Societies
and Friendly Societies were exempted in the 1960 Act and the 1993
Act preserves this. The picture with regard to Housing Associations
is complex. Housing Associations are registered and regulated
in law by the Housing Corporation with some involvement from the
National Audit Office (NAO) but are not exempt as a category under
Schedule 2. Some Housing Associations may also be registered charities,
for example, almshouse charities, Abbeyfield societies, and the
Peabody Trust. In the case of some housing associations seeking
registered charity status, who must register with both the Charity
Commission and the Housing Corporation, there is a streamlined
process leading up to the registration which involves the cooperation
of both regulators. However, Housing Associations may also be
registered as industrial and provident societies on charitable
rules, and as such would qualify as exempt charities.
Foundation schools have exempt status
flowing from the inclusion of grant-maintained schools in Schedule
2 of the 1993 Act. The School Standards and Framework Act 1998
amended the Schedule 2 exemption. It subdivided grant-maintained
schools into several categories, one of which was foundation schools
who were given exempt charity status. This reflects the fact that
these schools - where land is held on trust for the purposes of
the school - were absorbed into the state system. Any change to
the law which requires such schools to register is likely to cause
complications and confusion.Most Independent Schools are registered
charities. Only two are exempt, namely Eton and Winchester.
There are also certain one-off anomalies
which are outside the scope of the charities acts but not referred
to as exempt. These include Greenwich Hospital which is a Crown
charity with substantial assets and, being neither exempt nor
registered, is totally unregulated by any body, other than, possibly
the Ministry of Defence, whose Secretary of State is the charity's
sole trustee. The National Fund, although a registered charity,
has an equally anomalous status and some would question whether
it meets charity and tax law requirements that a charity's income
be expended on charitable purposes.
3 The
context for the current discussion
In September 2002 the Cabinet Office
Strategy Unit published its report, Private Action, Public
Benefit - a review of charities and the wider not-for-profit sector.
The report set out a package of proposals for the modernisation
of the law for a wide range of no-for-profit organisations. The
report made three recommendations in connection with exempt charities:
57. The monitoring regimes to which
housing associations, universities and
colleges as exempt organisations are
subject should be adapted to cover basic
charity law requirements. (7.96)
58. The reports and accounts of exempt
charities should clearly set out the voluntary
funds they hold and how they use them.
The same level of information about
exempt charities as is required of
charities should be made accessible on or via the
Charity Commission web-site. (7.96)
59. The Charity Commission should be
given a power to investigate exempt
organisations on the request of their
'main regulator'. (7.96)
In July 2003 Home Office published
the Government's response to the Strategy Unit's recommendations,
Charities and Not-for-Profits: A Modern Legal Framework.
In welcoming many of the report's the Government indicated also
its intention to move towards the introduction of legislation
as soon as was practicable. However, the Home Office's response
also recognises a number of areas where, if modernisation or legislation
is to be introduced, there is further research and analysis, and
exploration of options, to be undertaken. Exempt charities is
one of those areas.
According to the Home Office response,
only 69 respondents to the Strategy Unit consultation commented
on the recommendations in respect of exempt charities. But the
report says that "there was a clear acceptance - shared
by exempt charities and others alike - of the principle that all
organisations enjoying the advantages of charitable status should,
in return for those advantages, comply with the basic principles
of charity law". Some exempt charity respondents argued
strongly that they were already subject to adequate (even excessive)
regulatory requirements though there does not appear to be a consensus
in all sectors of who their main regulator would be.
The important paragraphs are as follows:
6.55 The Government accepts these recommendations.
It agrees the importance of ensuring that exempt charities are
accountable, transparent, and compliant with the basic principles
of charity law. Some groups of exempt charities are already in
that position, or near to it, while others might be some distance
from it.
6.56 At the same time the Government
is aware that, in some sectors, exempt charities are already highly
regulated (for example, Higher Education Institutions. The Better
Regulation Task Force concluded in 2002 that HEIs were in some
respects overburdened with bureaucracy).
6.57 The Government's aim is, therefore,
to establish arrangements that secure greater accountability and
charity law compliance from exempt charities while imposing the
minimum of extra bureaucracy. The Government will, with exempt
charities either individually or in groups, aim to identify acceptable
main regulators for each charity or group. Where this cannot
be done, the charity or group will be required (if above a £100,000
annual income threshold) to register with the Charity Commission.
The wider voluntary sector has indicated
a desire to achieve a similar level and type of regulation for
all charities appropriate to size, whether exempt, registered
or currently unregulated. There is therefore considerable interest
in whether this can be achieved.
4 The
working group's discussions
In its discussions the working group
explored a range of areas and issues. One key area that emerged
was a lack of understanding about the status of exempt charities,
what they are exempt from, whether they are charities in the same
sense as registered charities, whether they complied (and were
shown to comply) with the basic principles of charity law, and
whether their charitable activities are currently subject to regulation.
4.1 What are exempt charities exempt
from?
Exempt charities are charities in so
far as they are organisations established for public benefit and
they are subject to charity law in the same way as registered
charities. The principle difference is that they are exempt from
registration with the Charity Commission and from various powers
of the Commission including the power to require a change in name,
and the power to institute inquiries and to act for the protection
of charities. While the Charity Commission can make a Scheme for
an exempt charity, this power is only available on the request
of that charity. Exempt charities are also exempt from the need
for the Commission to authorise legal proceedings and from certain
restrictions on disposal of land and mortgages.
In addition, exempt charities are exempt
from the requirements for registered charities relating to the
preparation, examination and submission of accounts, reports and
returns and from the legal obligation to comply with the Charities
SORP. However, they are under a charity law obligation to keep
proper books of account. Further, in the absence of any other
applicable statutory provisions requiring them to do so, charity
law requires that exempt charities prepare consecutive income
and expenditure accounts and a balance sheet showing the position
at the end of each accounting period.
4.2 Are exempt charities, charities?
Exempt charities are able to refer
to themselves as charities and enjoy the same freedoms and privileges
as registered charities, for example, they have the same tax reliefs
and exemptions. Further, the Charity Commission can provide confirmation
of charitable status in the form of a letter stating that the
organisation would have been registered as a charity had it not
been exempt.
Some exempt charities emphasized their
'uniqueness' in relation to other charities but the working group's
research identified that in almost all areas of activity where
exempt charities existed, there were also registered charities
undertaking the same activity. The current register of charities
embraces a very wide range of different types of organisations
and sometimes these amount to fairly similar and substantial sub-sectors,
for example, almshouses, hospices, medical research charities,
special education, environment etc.
4.3 The concept of a main regulator
The Charity Commission's interest is
in the generic aspects of charities and not the regulation of
all the activities undertaken by charitable organisations, whether
those were in the health, education, environmental or other areas.
The Charity Commission's interest is, by definition those activities
that are common to all charities. The more complex the range
of activities undertaken by the charity the greater the range
of external regulators to which it would report.
For example, all organisations (whether
charities or not) would be subject to regulation by other agencies
including the Inland Revenue and Customs and Excise, Health and
Safety Executive, Trading Standards, Data Protection etc. Registered
medical research charities that support their own research laboratories
will be subject to the same regulatory arrangements as a research
laboratory based in a university. Schools, whether registered
or exempt, would be covered by the Qualifications and Curriculum
Authority, Office for Standards in Education, National Care Standards
Commission, Department for Education and Skills, Are Protection
Committees and the like.
There is an emphasis in both the Strategy
Unit report and the Home Office response on the need identify
a 'main regulator' which might undertake the responsibility of
regulating the exempt organisations as charities. The working
group identified this is an area of potential difficulty.
Exempt charities currently report to
a very wide range of different regulators, just as do registered
charities. The extent to which any of these are a 'main' or 'principal'
regulator is a key question for discussion within each of the
exempt charities sub-sectors. One common interpretation of 'main
regulator' was that it would be the primary funder. For some
exempt charities, the primary funder undertakes an extensive degree
of auditing of the use of public funds, but very few of these
'regulators' currently monitor the charitable activities of the
organisations they fund.
There is concern in some quarters that
to add the responsibility for charitable activities to the current
main regulator could have implications for the independence of
the organisations and their charitable activities. Some Oxford
and Cambridge Colleges, which currently are accountable to Oxford
and Cambridge Universities respectively for their educational
activities, expressed concern that the could lose their independence
vis a vis charitable activities should they also be required to
account for these to the university. Given that Oxford and Cambridge
Universities are themselves exempt charities, there was a further
concern that it would be inappropriate that charities not regulated
by the Charity Commission to be responsible themselves for regulating
other charities.
A further key issue is whether it is
appropriate for a funder to be a main regulator since the interests
of a funder will tend to be to obtain what it wants in return
for its funding, which clearly conflicts with its ability to act
as a dispassionate regulator. This may be the case for exempt
museums and galleries where the only contender for main regulator
is likely to be the Department of Culture, Media and Sport which
is also the main funding body for these institutions. The same
would be true of HEFCE as the main regulator for universities.
4.4 Current 'main regulators' identified
by the Home Office are:
| Exempt Group
| Current main regulator (not for charity law)
|
| Museums listed in Schedule II
| DCMS |
| Higher Education Corporations
| HEFCE |
| Further Education Colleges
| Learning and Skills Council
|
| Gov. Boards of Foundation &Voluntary Schools
| Department for Education and Skills (DfES)
|
| Charitable Industrial and Provident Societies
a) Housing associations that are RSL's & come under the Housing Corporations' regulation at present
|
Housing Corporation
|
| Charitable Industrial and Provident Societies
b)Registered, as are all other charitable I&P's not under Housing Corporation, with the Registrar of friendly societies at the FSA
|
Financial Services Authority
|
| Kew Gardens
| Department for Environment, Food and Rural Affairs (DEFRA)
|
| Qualifications and Curriculum Authority
| Department for Education and Skills (DfES)
|
4.5 If there were several regulators,
what would be the nature of their relationship with the Charity
Commission?
The working group identified that there
was a possibility of a wide range of main regulators having the
responsibility to regulate the charitable activities of the organisations
currently reporting to them. Most of these organisations do not
currently explicitly oversee the charitable aspects of the organisations
reporting to them and would need therefore to modify and perhaps
extend their existing monitoring arrangements. The working group
identified that there would be a need for some body to work with
'main regulators' to develop monitoring arrangements that introduced
and oversaw consistency in the of regulation of charities and,
over time, to monitor the application of the monitoring arrangements.
A question arises then as to whether there would be a need for
an overarching regulator.
A key question for the working group
was, if there were several different regulators, how would their
responsibilities fit with the role of the Charity Commission?
Some members of the working group considered it unsustainable
to establish a body for the primary purpose of regulating charities,
increase its accountability and strengthen and clarify its role
and then hand responsibility for some charities to other bodies.
At the very least it was argued that should exemption remain
as an option, the link between named main regulators and the Commission
should be explicit within the new legislation.
It was considered that the possibility
of several different regulators might pose a potential problem
for public confidence. One of the key ways of building public
confidence in institutions is for the public to have an understanding
of where they can access information, who is accountability to
whom and how they might make a complaint. A range of different
regulators would lead potentially to a complex environment that
is most unlikely to build public confidence.
Appendix 4 suggests that it might be
feasible for the exempt charity's sponsoring department to amend
its existing accounting instructions to include a special requirement
for compliance with the Charities SORP in respect of non-government
voluntary funds where these are considered material, and in such
cases to submit the year's Annual Report and audited Accounts
to the Commission for charity law compliance monitoring.
4.6 The availability of a single register
One of the advantages of registration
with the Charity Commission is that it provides the public with
a single register of charities. There is currently no such central
source of information on exempt charities. Although many sub-sectors
of exempt charities do publish lists of organisations, it was
considered that the public would find these hard to trace unless
they were linked explicitly and easily to the Charity Commission's
central register. The central register also enabled those who
are considering starting a charity to map the existence of others
with similar names and objects, to identify potential collaborators.
For those wishing to make a donation the register was one of
the ways in which they could identify charities working in the
area of their interest. Without a central register for exempt
charities, the public is unable to gain a full picture of this
group and only a few sub-sectors provide this comprehensive information.
As one of the principle aims of the review of charity regulation
is to increase public confidence in charities, the working group
considered that the availability of a single register was essential.
Main regulators or sponsoring government
departments could require exempt charities to feed data to the
Charity Commission for use on the web site and the potential for
links to Guidestar UK might also be considered.
4.7 Benefits of registration
Being on the central register gives
registered (and some exempt) charities the opportunity more readily
to confirm or prove their status to funders and donors.
4.8 Does exemption assume public benefit?
Will the public benefit test be applied to all charities, including
exempt charities?
One of the Strategy Unit's proposals,
now accepted by the Home Office, is the removal of a presumption
of public benefit for some groups of charity (including health
and education) and the more rigorous application of the public
benefit test for all charities (described in Chapter 4 of the
report).
This proposal has received widespread
support throughout the voluntary sector but there is certainly
a lack of understanding of how this would work for exempt charities.
Currently, the test applies in theory to exempt charities but
there is no mechanism for actually applying it. Should the law
be changed so that all charities must register then it would be
an opportunity to ensure that the public benefit test was applied
fairly across all organisations that call themselves charities,
including exempt charities. Otherwise some other mechanism to
ensure this will have to be found.
Most exempt charities are exempt because
they are engaged in an area of activity for which there is a presumption
of public benefit. Indeed, some argued further: if the activity
was largely supported by Government then it could be assumed to
be of public benefit.
4.9 An increase in bureaucracy?
Many exempt charities have argued strongly
against registration as a potential increase in bureaucracy and
that they are already heavily regulated. The working party identified
that the key issue for consideration was not so much the level
of current regulation but whether the charitable aspects of the
organisations, including fundraising, were currently regulated.
In addition, since it is proposed that
exempt charities will have to complete the new Standard Information
Return in any event (in order to comply with the Strategy Unit's
Recommendation 7.96) any further increase in bureaucracy over
and above this which would flow from registration is likely to
be negligible.
4.10 Numbers
One argument put against the removal
of exemption has been the administrative burden that might be
placed on the Charity Commission should a large number of charities
suddenly need to register. However, it was felt that initially
the status of almost all exempt charities could be confirmed as
charitable with transitional or phased arrangements introduced,
perhaps by size.
5 Current
reporting and monitoring arrangements
| Registered charities
| Exempt charities
|
Duty to keep accounting records (s41 CA 1993)
Accounts may be prepared on receipts and payments or accruals basis but must be prepared on an accruals basis if income over £100,000.
| Duty under to keep proper books of account (s41(1) CA 1993)
|
| Accounting records must be retained for at least six years (three for charitable companies) (s41 CA 1993)
| Accounting records must be retained for at least six years (s46(2) CA 1993)
|
| Duty to prepare annual statements of accounts (s42)
| In the absence of any other specific statutory requirements, charity law requires the preparation of consecutive income and expenditure accounts relating to periods of not more than 15 months and a balance sheet showing the position at the end of each accounting period (s46(1) CA 1993)
|
| The annual audit or examination of accounts (s43&44) (unless income and expenditure and both under £10,000, except in exceptional circumstances)
| No charity law requirements
|
| The preparation of an annual report (s45 CA 1993)
| No charity law requirements
|
| Duty to make accounts available to members of the public on request (s47(2) CA 1993)
| Duty to make accounts available to members of the public on request (s47(2) CA 1993)
|
| Completion of annual return (s48 CA 1993)
| No charity law requirements
|
| Completion of annual register check form (not a legal obligation but legal obligation to keep Commission informed of all changes to the register).
| No charity law requirements
|
| Commissioners' inquiry powers under s8
| Charity Commission has no power to institute inquiries
|
5.1 Equality in the regulation of fundraising
The provisions relating to fundraising
in the 1992 Act apply to all charities, including exempt charities.
There is strong support in the wider voluntary sector for all
fundraising, whether undertaken by exempt, registered on unregistered
charities, should be covered by the regulation and by self-regulation
procedures. The working group questioned the experience and ability
of 'main regulators' to undertake this role for exempt charities.
6 current
regulation of registered charities
One of the principle arguments put
against the registration of exempt charities is the avoidance
of bureaucracy and over reporting. On the other hand, relatively
few (though there were some) of the existing 188,000 registered
charities responded to the Strategy Unit consultation complaining
about the level of bureaucracy involved in registration. Most
accepted that the nature and purpose of the current regulatory
framework is to provide confidence to the general public that
charities behave with integrity and work for public benefit.
Registered charities with an income
of over £10,000 are required to report to the Charity Commission
on an annual basis. The reporting requirements include the completion
of the Commission's annual return which is a 8 page document:
an example of this is attached as an Appendix. The annual return
covers financial information; details of the charity's name, correspondents,
bank account, fundraising, dealings with trading companies and
employee pensions schemes; classification of the charity; details
on the number of trustees and any relevant benefits and property
they hold; and details of any misappropriation of assets occurring
within the relevant financial year.
In addition, charities must provide
a copy of their annual report and accounts to the Commission on
an annual basis. The information to be included in the annual
report and accounts is set out in a Statement of Recommended Practice
and includes comprehensive details of the charity, contacts, trustees,
bankers, solicitors, auditors, objects, governing documents etc.
In addition, a summary of activities and achievements in relation
to the charity's objects is required along with details of policies
adopted by the trustees and information on specific investment
powers and their authority. The requirements also include a statement
regarding the relationships between the charity and any other
charities and organisations with which it co-operates in pursuit
of its charitable objects. There are additional requirements for
charities with a gross income of more than £250,000, including
a review of activities, a description of the organisational structure
of the charity, and statements relating to assets, risks and the
performance of investments.
Where a charity's income or expenditure
is greater than £10,000, charity law also requires that the
annual report and accounts be subject to external examination
or audit. The reports and accounts of charities with an income
above £250,000 must be audited by a registered auditor.
Similar arrangements could be applied to exempt charities whether
or not they were brought onto the register.
The Commission monitors the reports
on an annual basis. It has also introduced a programme of visits
that enable it to monitor some organisations more closely and
to follow up on any issues they have identified. Latest available
annual accounts must be available to the general public on request.
7 Public
Perception of Charity
The focus of the Strategy Unit review
of charity regulation was a consideration of public trust and
confidence. Clearly, the wider public is unlikely to be closely
aware of any distinction between registered and exempt charities
though there is probably some increased awareness in recent months
of the different regulatory regimes in England and Wales, Scotland
and Ireland.
There appears to be a growing gulf
between what people think is charitable and what is actually charitable
in law. For example, an ICM opinion poll commissioned by NCVO
found that 80% of respondents did not know that the Royal Opera
House is a charity; whilst more than half of 18-24 year olds thought
that the Child Support Agency is. There is a concern that this
gulf contributes to the loss of public trust and confidence in
charities.
Public confusion about what is, or
should be charitable is compounded by the complexity of charity
law and apparent inconsistencies in the legal treatment of charities.
In particular, NCVO's work in this area has highlighted strong
concerns about the anomalous position of exempt charities and
the fact that these organisations receive the benefits of charitable
status, but are not subject to all the reporting and accounting
requirements of the Charity Commission. Since they are not subject
to regulation as charities per se, there is no pressure
on them to be aware of, let alone abide by, the responsibilities
that follow from charitable status.
8 What
are the interests of major donors?
Major donors have an interest in transparency
both of the application and availability of funds and in their
proper application. They are potentially an important stakeholder
community to consult on this issue.
9 The
way forward
This paper is being circulated by working
group members to their own stakeholder communities and it is hoped
that in considering the issues the paper raises, comment will
be made on the possible way forward. There are a number of options:
- The Charity Commission
becomes the regulator for all organisations known as charities
or calling themselves charities, including currently exempt organisations;
- The Charity Commission becomes
the regulator for all organisations known as charities or calling
themselves charities, including currently exempt organisations
that engage in fundraising or compete with other charities for
public funds;
- A few very special cases of exempt
charities might remain with the majority becoming registered;
- Exempt charities remain only where
a regulator is identified that will undertake the role of charity
regulator with other charities having to register subject to size;
- Organisations should retain their
choice of legal form wherever possible and currently exempt charities
be given the option to register if they considered this a more
appropriate course of action than to subject their charitable
activities to the regulation of their funder
- Exempt charities be required to
account for their non-government voluntary funds in accordance
with the Charities SORP instead of the more individually specialised
SORP for their sectors. Appendix 4, Regulation of Charity Law
Compliance by Exempt Charities, suggests that the Charity Commission
might be given the limited role of monitoring charity law compliance
by exempt charities whose annual reports and accounts are submitted
to the Commission on the instruction of their sponsoring department
or main regulator.
Appendices
1. List of working party members
2. List of exempt charities by sub
sector
3. Charity Commission annual return
4. Regulation of Charity Law Compliance
by Exempt Charities - paper by Andrew Pianca, Horwath Clark Whitehill
February 2004
appendix 1
working group membership
and contributors
Terms of Reference
To explore the issues arising from
the recommendations in the Strategy Unit report regarding exempt
charities and to assist the ACU in developing appropriate solutions.
Key objectives
The main output from the Working Group
would be a discussion paper setting out to:
- identify the range of exempt charities
that exist currently;
- foster discussion amongst interested
groups in order to identify their concerns and the particular
complexities of each sub-group of exempt charities;
consider options for the regulation
of exempt charities
Membership
Sean Bullick, Secretary, National Museum
Director's Conference
Diana Garnham, Chief Executive, Association
of Medical Research Charities, working group convenor
Judith Hill, Charity Law Association
Andrew Malin, Financial Health Team,
HEFCE
Andrew Pianca, Horwath Clark Whitehill,
Auditors
Belinda Pratten, Policy Officer, NCVO
Vivienne Stern, Senior Public Affairs
Officer, Universities UK
John Stewart, Head of Legal and Company
Secretary, Wellcome Trust
Matt Burrows, Research Officer, AMRC
Observers
Jonathan Martin, Charities Unit, Active
Community Directorate (ACD), Home Office
Richard Corden, Charities Unit, Active
Community Directorate (ACD), Home Office
Jane Hobson, Head of Strategy Unit
Co-ordination, Charity Commission
Margaret Vallance, Charities Unit,
Active Community Directorate (ACD), Home Office
NCVO (2001) For the Public Benefit? A consultation
document on charity law reform
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