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Lord Bassam of Brighton: In response, it is worth saying that most orders are made on the charity, so that the trustees are given a specific right and are clearly affected. Under the power, the order is made on a trustee individually. The other trustees might be persons affected but are not always so. I am not sure that the problem that the noble Lord sees is in reality a difficulty. I am minded, similarly, to reflect further on his words. With all due respect to him, there may be a misunderstanding on his part. I am always open to taking a second look at issues, but I do not necessarily follow what he is saying on this matter.
Lord Phillips of Sudbury: I hesitate ever to suggest that the misunderstanding could be on the part of the Minister, but I shall do so on this occasion. Frankly, he needs to satisfy me that, if his argument is correct—if,
includes charity trustees—why does the rest of the table separate those groups and include both of them?
Lord Hodgson of Astley Abbotts: It is interesting that the Law Society, which has also been concerned on the subject, suggests adding the third category to which the noble Lord refers in its amendment, even though that amendment comes in a different place. It thinks that there is a problem along the lines that he is describing.
The Deputy Chairman of Committees: I am afraid there is a Division, so we will have to adjourn for 10 minutes.
Lord Bassam of Brighton: Does the noble Lord want to withdraw his amendment so that we can move on?
Lord Phillips of Sudbury: As a matter of sentiment, no, but as a matter of practice, yes. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
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[The Sitting was suspended for a Division in the House from 4.9 to 4.19 p.m.]
Lord Hodgson of Astley Abbotts moved Amendment No. 101A:
| "Determination of the Commission under section 75F(2) of this Act to require trustees to make disclosure of a donation otherwise sought to be made without disclosure otherwise than as referred to in section 75F(1)." | The persons are— (a) the charity trustees of the charity to which the determination relates, and (b) (if a body corporate) the institution itself. | Power to quash the determination and (if appropriate) remit the matter to the Commission with such directions as the Tribunal may think fit." |
The noble Lord said: Amendments Nos. 101A and 147A concern the right of charities to make anonymous donations. Amendment No. 147A inserts a new clause into the Bill to this effect and is the central plank of the discussion. However, since under our proposals the Charity Commission will have the power to require disclosure, this in turn gives rise to an event which is appealable to the Charity Appeal Tribunal. Hence the grouping with Amendment No. 101A, which adds that event to the lengthy table given on pages 79 to 85 in Schedule 4 to the Bill, which discussed earlier. The grouping is slightly strange, therefore, because we have been forced to approach the issue back to front, considering the appeal before we have considered the event. However, "that's the way the cookie crumbles", as they say.
The purpose of the amendments is self-evident. No charity can properly seek to have its operations cloaked in secrecy from its regulator, but the fact remains that some charity donors will wish to hide their support from those whom they have supported. That will require both an element of non-disclosure of the source—or the recipient—and the fact of the gift in the accounts, which will simply have to be referred to under some general heading such as, "other charitable expenditure". The effect of the two amendments would be that, if a charity donor so wishes, he or she may donate while remaining anonymous.
The reason for such anonymity is simple. Doing good by stealth has always been a form of philanthropy, which has been seen to have the highest merit, because it is done for the good of the recipient without the donor taking any credit for him or herself. It was Alexander Pope who said:
More practically, in some cases donors may wish to protect themselves against the possibility that a substantially publicised donation may attract an excessive workload for trustees in terms of applications for donations from other potential donees who believe that they, too, might have a claim for similar bounty.
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It is no more than a statement of fact that many donors prefer their donations not to be too readily traceable. The use of anonymous names for charitable donor foundations is a commonplace and has been used to try to achieve anonymity. Of course, all too often, the anonymity originally sought is lost as the true identity behind the donor foundation becomes well known. The result can be that those otherwise inclined to make charitable gifts through foundations may if denied the chance of anonymity be tempted to limit their generosity to one-off gifts out of income through the medium of specially created anonymised CAF accounts, or similar. That cannot be in the interests of the charitable sector.
As long as there is a suitable mechanism for ensuring that the anonymous gift cannot be shielded from disclosure to the Charity Commission and/or the Inland Revenue, and the commission has suitable powers to require disclosure if it thinks fit, charities ought to be at liberty to seek to give anonymously.
My noble friend Lord Sainsbury spoke powerfully on this point at Second Reading, and I know that he wants to contribute to the debate this afternoon, so I shall say no more. But I hope that the Minister understands the persuasive logic of the amendment. I look forward to hearing the Minister's reply. I beg to move.
Lord Sainsbury of Preston Candover: As I have not spoken in Grand Committee, I wish to declare an interest as I did on Second Reading. Having raised this issue in the speech, I welcome and support the amendments. I remind the Committee that the importance of the grant-making sector is within the charities—the importance of not only the size of the grant-making trusts, which give something like £22 billion a year in donations, with regard to the top 500, but also their role in innovation, taking risks and supporting unfashionable causes. They are an important part of the charity sector.
We do not want simply to rely on the existing grant-making trusts, but do all that we can to encourage new wealth to do what previous generations have done and commit funds in perpetuity—rather than using the excellent system of gifts, and the benefit that can come from the gift system. That is now more attractive to a large benefactor, as it helps him to keep his anonymity, using gift aid. It can be entirely private and he need have no dealings with the Charity Commission in the gift aid to a charity, so he is free of bureaucracy. At present, we have a situation whereby most senior QCs recommend to their clients, when considering a new foundation, that they should not do so because of the hassle, the bureaucracy and publicity if they did it that way rather than through gift aid.
If the present rules applied, I would never have set up the foundation I did. The rules changed only in 1995, requiring trusts to list their 50 largest grants by name. An exception was allowed if there was a particular reason for anonymity on a small number of the 50. The second SORP came out in 2000, making it necessary to obtain clearance from the Charity
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Commission to give anonymity to exceptional donations. The commission showed no liking of that and, to my knowledge, it was difficult on the issue.
However, worse was to come. The new SORP, which is presently in consultation, contains a rule that anonymity can be given only to grants which could lead to violence or physical harm as a result of publicity. We can all think of what that might refer to. It shows that the Charity Commission does not like anonymous gifts.
Of course the commissioners have full information, as must the Inland Revenue, but I believe that it is almost like a human right: you should be able to give money to a foundation and to make the give without drawing attention to yourself. I invented the name "Linbury" for my own trust in order to disguise its origin, but it did not last long. It was the first half of my wife's name and the second half of mine, but inevitably it soon leaked out. You cannot achieve anonymity by being clever with a name.
I hope that the Government will look favourably on the need to return to where we were in 1995 when it was possible to make anonymous gifts.
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