Concerns Raised over Charities Act

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Two years after problems were identified in the Charities Act, organisations in Northern Ireland are still waiting for MLAs to iron out the flaws. Una Murphy looks at the issue and talks to a number of individuals, including a leading solicitor, about the ongoing issue.[divider][/divider]

The new charity regulator in Northern Ireland, the Charity Commission, is still waiting for politicians at Stormont to sort out problems with how charities are registered, two years after flaws were identified in the legislation.

The public benefit test to prove organisations are bona fide charities cannot be used despite a new law brought in to regulate the sector. Officials for the Stormont Minister responsible, Nelson McCausland, are to map out how the law will be amended so the Charities Act can be fully implemented here. Concerns have been raised with the Charity Commission about charities in Northern Ireland – mostly by the public¬ – in the past 12 months.

Some local charities are frustrated at the lack of progress. “Legislation is needed to protect the money that people are giving to the sector,” said Gerry McGrath of Workforce Training Services, a charity based in Belfast.

Leading charity solicitor, Jenny Ebbage, said problems over the public benefit test had first arisen over two years ago. Politicians need to amend the Charities Act public benefit test, she said. “In Northern Ireland the legislation is a hybrid and says it will test whether the charitable purpose is for the public benefit – but the test set out in section 3 of the Act does not do that. Rather it tests the activities of an organisation in a similar way to the Scottish Act. It is believed that there is a mismatch; and the ‘hybrid’ public benefit test set out in the Northern Ireland legislation requires an amendment,” she said.

The Charities Commission – set up under the Charities Act to regulate the sector – cannot register charities, as the public benefit test which would prove whether or not an organisation is operating for the greater good of society is not clear-cut.

Until the public benefit test is amended by Stormont politicians, an interim list of more than 6,500 organisations currently deemed to be charities is on the Charity Commission’s website. A member of the public who is concerned that an organisation is masquerading as a charity can look at the list and make a complaint in confidence to the Charities Commission if they suspect wrong-doing including: criminality, sham charities, or those operating for significant private advantage. In order to be able to register charities, however, the Charity Commission must be able to identify which organisations are charities.

This is technically not possible within Northern Ireland until the Public Benefit Test issue is resolved. “It is the first time Northern Ireland charities will have their own regulator and it all applies to all charities, from small family trusts to big organisations”, Ms Ebbage said. “The commission is a light touch regulator, it is there to help organisations but if an organisation does not comply the Charity Commission will come down heavily, it could put a charity out of business.” “There has been no registration yet as a public benefit test has to be put into place. The interim arrangement is that if you are a charitable body with a HMRC number such as XR, XT, XN the organisation is automatically put on a list. And those parts of the Act in force apply to those 6,500 organisations on the list.

“Even if the Charity Commission has not contacted your organisation you should be proactive – as the Charities Act will eventually cover all charities not just those who have tax exemptions.

“The Charities Act will have an impact on those working in the sector – and may lead to changes in the organisation’s working patterns and practices. “There will be more information in the public domain about charities and this will be available via the Charity Commission,” she said.

The Chief Executive of the Charity Commission, Frances McCandless said: “The Charity Commission has carried out important aspects of charity regulation despite the delay in charity registration. For example, since the commission gained powers to investigate charities in February 2011, we have received over 100 concerns about charities, mostly from members of the public.

“Making enquiries into these 100-plus concerns and providing advice and guidance to the charities involved has allowed us to make a positive impact on the charity sector. We will continue with this and other work while looking forward to beginning the registration process once the Charities Act (NI) 2008 has been amended by the NI Assembly, Ms McCandless said.

“Our website provides regular updates and information on our work and role as the new independent Northern Ireland charity regulatorwww.charitycommissionni.org.uk.” The list of deemed charities in Northern Ireland is on the Charity Commission website . View the list on http://www.charitycommissionni.org.uk/Our_regulatory_activity/List_of_deemed_charities.aspx

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