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Review of Charities Act

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As you may recall, last year conservative peer Lord Hodgson was asked to review the provisions of and implementation of the Charities Act 2006.
 
The review, published today after eight months' work, recommends raising the income threshold for compulsory registration for charities from £5,000 to £25,000, bringing solicitation of direct debits by face-to-face fundraisers into the local authority licensing regime, and amending the law to put social investment by charities on a firmer foundation.
 
For our students’ unions “sub sector”, to influence the review we encouraged you to respond to the review; we responded directly on your behalf to the consultations; we met with ACEVO and NCVO to influence their efforts; and both Matt Hyde and I met directly with Lord Hodgson and his team to put the concerns and views that you fed in directly. I am pleased to say that many of the more worrying potential proposals have been dropped from Lord Hodgson’s review and he appears to have heard many of our messages about our distinctive sub sector loud and clear.
 
Much of the 159-page report, with 113 proposals including 29 needing primary legislation, is not directly relevant to students’ unions. The 133 recommendations are spread over the following sections:
 
Fundamentals of a Charity
The Charity Commission and charity registration
Co-regulation, sub-regulation and exempt charities
Complaints, appeals and redress
Fundraising
Social investment
Technical Issues
 
The report can be found in full here:
Trusted and Independent - Giving Charity Back to Charities:
http://www.civilsociety.co.uk/docs/charities_act_2006_review.pdf
 
Headlines for the voluntary sector as a whole emerging include:
 
Charities that fall into the ‘large’ category (income over £1 million) should have the automatic power to pay their trustees
The general income threshold for compulsory registration with the Charity Commission should be raised from £5,000 to £25,000.
Government should work with the Charity Commission to develop a fair and proportionate system of charging for filing annual returns with the Commission and for the registration of new charities.
 
NUS has developed a “mini briefing” on the key issues emerging for students’ unions that is available here
 
 
The “sector” has responded in the press today:
 
VERDICT - Sir Stuart Etherington, NCVO
while the report gets it right on most counts there are some ‘jarring notes’.  
sound recommendations for reducing undue bureaucratic burdens on charities, but there are a few “bad apples” which run counter to the general spirit of maintaining high levels of public trust and confidence in charities.
issue of trustee payments will always divide opinion, but NCVO stands by our concerns that giving charities above the £1m income threshold automatic power to pay trustees would set a dangerous precedent and is a deregulatory step too far. Making the right automatic undermines the value of voluntarism 
strong reservations about the proposal to raise the income threshold at which charities have to register with the Charity Commission from £5,000 to £25,000.  This would risk shunting a large tranche of charities outside of the Charity Commission’s regulatory remit and injudiciously bolster the powers of HMRC over this group.
proposal to introduce fees for registering new charities and filing annual returns is also a step in the wrong direction – put more obstacles in the way of charities being created when they are often best placed to address a wide range of societal challenges. It is also wrong to be charging existing charities at a time when they are under huge financial pressure.
delighted to see recommendations which facilitate social investment and make it easier to set up and run charities, especially the introduction of Charitable Incorporated Organisation (CIO) status and simplifying the accounting and reporting framework
 
VERDICT - Sir Stephen Bubb, ACEVO
"values diversity over neatness" and backing trustees judgment and he is right! 
review represents a landmark in the modernisation of the charity sector. It builds on the '06 Act. 
I expect there will be some whinging on trustee pay , but what he says is entirely sensible. For charities over 1 m he proposes that trustee boards have the discretion to pay their trustees. This has to be right. If a charity believes it needs to pay ( not large sums let's be clear! ) then why should they not do so. In fact you can pay now ( it's not illegal to pay trustees) but the Charity Commission are so bureaucratic about it many give up. 
I'm also delighted with the forward thinking being his proposals on social investment. Well done to hodgson for grasping this baton and arguing the value of charites looking at this new method of funding our sector
http://bloggerbubb.blogspot.co.uk/2012/07/hodgson-reviews-charities.html
 
Any questions or thoughts please do let us know

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