What we believe about charity law and regulation
It is important to ensure the voluntary sector has a legal and regulatory framework that reflects the needs of charities in a modern world. And this must match public perceptions about what is, and should be, charitable.
Clear laws help people understand what charity is for, and why charities are special. This is also important because charities rely on people's willingness to give their time and money to causes they care about.
It is with these priorities in mind that NCVO has led key policy development on issues such as:
- modernising charity law
- public benefit
- the impact of regulation on civil society organisations
- cutting red tape.
Our work in these areas follows the principles we believe in, as set out below.
NCVO has consistently argued that a universal public benefit test is needed to maintain and enhance public confidence in charity. This is because public benefit is the main justification for the tax and other benefits, including public support, which charities receive.
Public benefit is one of the cornerstones of charity so it is important that the law is clear and trustees understand their duties in this area. At the moment the law on public benefit is highly complex and hard for the average trustee to understand, which places very considerable emphasis on the Charity Commission's guidance.
Therefore we believe that the Charity Commission guidance should be simple and easy to understand, setting out the minimum requirements for trustees to comply with the law. We also recommend that legislation should set out the main principles by which public benefit is to be judged. This should not be an attempt to produce a comprehensive definition of the public benefit requirement in statute, because we need to retain a genuine capacity for the concept to develop with time.
Read our Charity Law Review Advisory Group's final report and recommendations (PDF, 1.36MB) published in 2012.
Read For the public benefit? A consultation document on charity law (PDF, 482KB), published in 2005.
The voluntary principle
The voluntary principle is the essence of our sector and is what makes our organisations distinctive.
At the moment, the payment of trustees is an exception allowed by the Charity Commission on a case-by-case basis and we believe that the role of trustees should remain voluntary.
However, this is a lively debate, as you can see from Karl’s blog post, Is the payment of trustees inevitable? (September 2011).
The Charity Commission
NCVO has always maintained that it is important for the sector to have a strong and independent regulator, whose key role is to promote compliance and accountability with charity law and regulation. This can be done by:
- giving advice and guidance to charities on their legal duties, and therefore preventing both deliberate and innocent wrong-doing
- investigating cases in which there has been a breach of charity law.
However, it is not appropriate for the Commission to provide wider advice on good practice or to act as a 'champion' for the sector. This can cause confusion among charities when trying to understand what they are legally required to do, and what is good practice recommended by the Commission, creating potential for regulatory creep.
At a critical time for the sector, and in the context of significantly reduced resources, the focus must be on the Commission’s ability to provide robust and effective regulation. This is a competency that cannot be replaced by, or delegated to any other body.
Read Managing Risk – A new approach to the fit and proper regulation of charities (PDF, 69KB), published 2011.
Read The Impact of Regulation on Voluntary Organisations (PDF, 173KB), published 2004.
The importance of accountability and transparency
Voluntary action relies on public support and goodwill – civil society organisations need to convince donors and supporters that their cause is worthy and that they can be trusted to make a difference. This requires greater transparency about what our organisations do and how they do it.
Read our Accountability and Transparency report (PDF, 145 KB), published in 2004.
Charities have the right to campaign
Charity law provides the framework in which charities can campaign, by stating that a charity cannot be established for political purposes. However, it is also made clear that campaigning and political activity can be legitimate and valuable activities for charities to undertake.
We believe that government must recognise and encourage the right to campaign.
Read the NCVO and Sheila McKechnie Foundation campaigning manifesto statement (PDF, 16KB), published in 2009.