Rachel Eden writes:
There have been some important updates to the Charities Act
New powers
There are two key new powers that relate to financial payments from a charity.
Firstly, there will be a new power that trustees can use to allow them to be paid for providing goods to a charity.
Secondly there will be a new power to enable trustees to make ‘ex gratia’ payments if there is a reasonable moral obligation, without a requirement to seek permission from the Commission. A financial threshold will apply to this.
Other updates
A key update to reporting requirements is that where fundraising appeals do not raise enough money, or too much, simpler and more proportionate rules will apply
There are other updates to the Charities Act, mostly aimed at making running a charity more straightforward, which will come into force next year. These include provision about how charities change their governing documents. There will also be more flexibility in using ‘permanent endowment funds’ and more flexibility around selling land.
Actions
You should review your current processes to ensure that they are up to date with these changes. You may want to consider whether you may be able to take advantage of the simplifications. Alternatively it’s possible you realise that you are not fully compliant at present. In this case it’s an opportunity to make sure you start getting it right.
You may also need to update your policies to ensure you are up to date and that you are taking advantage of all the powers provided in the act that benefit your charity.
You may wish to discuss this with your Independent Examiner or your accountant. It is certainly worth making sure you’re aware of the changed rules and when they apply as you prepare for your Independent Examination
More information is available here:
More on preparing for your charity’s Independent Examination
Guidance for charities from the Charity Commission on changes in 2022