The Charities Bill received Royal Assent on 24 February 2022 and was officially passed into law as the Charities Act 2022. The legislation originated from recommendations made by the Law Commission in its 2017 report ‘Technical Issues in Charity Law’. Improvements are aimed at making processes easier for trustees and to maximise charities’ efficiency. The changes have been made primarily by amending the Charities Act 2011.
What are the changes imposed by the Charities Act 2022?
We outlined some of the changes that were expected from the Charities Act 2022 in a previous note which can be found here. As a reminder, the provisions imposed by the new Act will:
- make it easier for charities to change their governing documents or Royal Charters (remaining subject to the Commission’s or Privy Council’s approval in certain circumstances)
- give charities access to a wider pool of professional advisors on land disposal and to more straightforward rules on what advice they must receive
- provide more flexibility to make use of a permanent endowment fund. This includes a change to allow trustees to borrow a sum of up to 25% of the value of their permanent endowment funds, without the Commission’s approval
- allow trustees to be paid for goods provided to a charity in certain circumstances, even if not expressly stated in the charity’s governing document
- allow charities to take advantage of simpler and more proportionate rules on failed fundraising appeals. For example, if a charity appeal raises too little money, the charity will be able to spend donations of below £120 each on similar charitable purposes without needing to contact individual donors for permission.
How does this impact schools?
This is a positive outcome for schools that are set up as charities. Essentially, these changes will reduce some of the unnecessary bureaucracy and hopefully save time and money when addressing key areas of governance.
When will the changes be implemented?
The changes are expected to be fully implemented by the autumn of 2023. This will allow time for trustees and the general public to understand the impact of the new provisions.
Some of the changes require secondary legislation as well as changes to the Charity Commission’s systems and processes in order to take effect, although not all of the provisions are dependent on the Charity Commission. The Commission has said that charities will be informed by the Commission when each of the relevant provisions come into force.