DCH 20 Home Office
Note
on possible indicators for gauging the
success of the legislation
for the
Joint Committee on the draft Charities
Bill
1. The draft Bill has been the subject of thorough
consultation, and the sector and other stakeholders have welcomed
the vast majority of its provisions. The main purpose of the
legislation is to create a modern legal and regulatory environment
that encourages a vibrant and diverse charitable sector, independent
of Government, in England and Wales.
2. The key benefits of the legislation should
be realised by the charitable sector, enabling it to develop,
diversify, and grow, and in strengthening the public's perception,
confidence and trust in charities, and their regulation. These
two groups of stakeholders will ultimately judge the success or
otherwise of the legislation.
3. Whilst there are a number of provisions within
the draft Bill that would have quantifiable indicators against
which the success of the legislation can be judged, many of the
provisions would not have an immediately measurable effect. Indeed
for many of the provisions it would be difficult to claim that
the Bill's specific contribution to the growth and development
of the sector, or the public's confidence in it, could be measured
in isolation from other influencing factors.
4. As the proposed legislation is founded on
the recommendations of the Strategy Unit report[30]
its success could be assessed against the aims of that report.
Potential indicators of success are set out against each of the
Strategy Unit's aims below, although there will be overlap between
some of the provisions and aims.
5. Modernise charity law and status to provide
greater clarity and stronger emphasis on the delivery of public
benefit.
- Existing surveys of the public's perception of
charity and charitable purposes demonstrate some confusion over
what a charity is, and what organisations hold charitable status.
The proposed legislation clarifies the definition of charity,
and charitable purposes, and this should be reflected in future
surveys of the public's perception of what a charity is, and which
organisations are charitable.
- The conduct and outcomes of public character
checks by the Charity Commission should demonstrate that only
charities providing public benefit are able to acquire or maintain
charitable status. This should also be reflected in public perception.
6. Improve the range of legal forms enabling
organisations to be more effective and entrepreneurial.
Monitoring the take-up of the new corporate legal
form of Charitable Incorporated Organisation, which is designed
specifically for charities, will provide a measure of the success
of this provision.
The draft Bill includes provisions to facilitate
charity mergers. The Charity Commission already records mergers
between charities, and an increase in the number of mergers would
be expected as a result of the legislation.
Measures recommended by the Strategy Unit, such as
the Community Interest Company, and measures for Industrial and
Provident Societies are being taken forward in other legislation,
but their impact could be similarly measured.
7. Develop greater accountability and transparency
to build public trust and confidence.
- The growth of the charitable sector, in terms
of the number and diversity of charities, their assets and turnover,
and the amount of public giving, would be obvious measures of
the longer-term success of the legislation. However, various
socio-economic factors, and other legislative changes would affect
such growth, so it would not be possible to equate growth trends
directly to the impact of this legislation.
- The provision on improved statements indicating
benefits for charitable institutions and fund-raisers should raise
public trust and confidence in charities. One of the greatest
concerns in recent public surveys was regarding the amount of
a donation that was actually received by the charity or cause.
It will not be easy to measure the effect of this provision directly,
but indirectly through public survey growth in public confidence
could be expected.
- It may be appropriate after a period of approximately
five years to review the success of the provisions relating to
exempt and excepted charities, in particular the effectiveness
of the monitoring of exempt charities by main regulators other
than the Charity Commission. At this time it might also be appropriate
to review whether the proposed £100,000 registration threshold
for both exempt and excepted charities should be reduced.
8. Ensure independent, fair and proportionate
regulation.
- The Charity Commission will have a number of
statutory objectives, against which it will report its progress.
Progress is already underway on a number of the Strategy Unit's
recommendations for reforming the Charity Commission that do not
require legislative changes.
- It is the Governments intention that the Charity
Commission, with advice from the Cabinet Office's Regulatory Impact
Unit, will quantify the impact of regulation on charities and
other not-for-profit organisations, monitor it over time, publish
the results and highlight areas where regulation appears excessive.
- The Charity Commission has already conducted
research into the public's perception of charity regulation.
Following the implementation of legislation, a further survey
of the public could be expected to reflect a greater awareness
and confidence in the regulation of charities.
- The views of charities, their representative
bodies and other stakeholders will also provide a valuable indication
of the impact of the legislation on the regulatory framework.
- The impact of the Charity Appeal Tribunal could
be demonstrated by the number of cases it deals with each year
and, of the unsuccessful cases before the tribunal, the number
that go on to successfully appeal to the High Court.
- Self-regulation was viewed as the first resort
in improving fundraising standards and practice. Should self-regulation
fail the draft Bill provides the Home Secretary with a reserve
power to make regulations controlling charitable fund-raising.
The Home Office will work with the Charity Commission to establish
the criteria against which the success of self-regulation will
be assessed.
Home Office
June 2004
30 Private Action, Public Benefit, Strategy Unit, September
2002 Back
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