What next for charity regulation?

A few months back we wrote a little about the complexity of charity law in England and Wales and mused on the question, is charity law getting too complicated for small charities? I don’t think it will come as much of a surprise to discover that our answer was a resounding YES.

Another indicator that things are getting too complicated and that something needs to be done to make charity law and regulation more accessible, is the growing number of enquiries we get from small charities and people wanting to start up new charities asking if we can help them interpret and respond to recent decisions and correspondence from the Charity Commission. All too often they get a lengthy standard letter (with some text inserted where specificity should be needed) and they have little or no idea what the letter is actually saying or why the answer it is giving is not the one they expected/hoped for. In some cases, they aren’t even clear what the answer is!

This really isn’t good enough?

We firmly believe that small charities are the bedrock of our communities and society as a whole. Think how much more it would cost to support vulnerable people without them or what would be left undone in communities that we all instinctively know makes the world a better place for us all.

But small charities rarely have access to the expertise or resources to get advice on complex areas of charity law (and there are lots of them). Indeed, when the law appears counter intuitive, they don’t even know that they need to get advice.

Surely the Charity Commission should be part of the solution here, not a source of confusion and obscurity?

There may be some good news on the horizon.

The Charity Commission has published an interim business plan for 2023-24 and it appears to promise some help on these matters. Specifically there are commitments to:

• “a new writing style when we are directly communicating with those involved in our casework, ensuring they understand why we take the action we do and reassuring them that our approach is fair and consistent, even if the outcomes in individual cases may not be the ones they hoped for”

• “be proportionate – helping trustees to respond when problems occur, while tackling intentional wrongdoing robustly”

• “[the] programme of guidance redesign, … to support and improve trustees’ understanding of their responsibilities and [contribute] to a longer-term reduction in unintentional harms caused by poor governance”

There is also a reaffirmation of the Commission’s controversial commitment to launching the online “My Charity Commission Account” for Trustees to “reshape our relationship with Trustees” (what about those who struggle with digital communications I hear you ask!)

What might all this mean for the future of charity regulation?

We hope it will lead to simplification and clarity, particularly for resource-strapped smaller charities. We hope it will help them navigate a complex system rather than burden them with regulatory requirements and action when it is not in the public interest to do so.

Alongside all this, however, there is also a commitment to “ensure [the Commission is] both more effective at discovering and responding to wrongdoing and harm and that [they] better support trustees in running their charities”. Interestingly, this is linked to the recent introduction of a new set of questions for Annual Returns. This brings with it a worry we have written about before, that Annual Return data could be used as a blunt instrument to identify potential candidates for regulatory action, thus increasing the burden on small charities who may not know the risks. Let’s hope not.

If you would like to find out more about the governance support and training we offer and how your charity can navigate the complexity and avoid unwelcome attention from the Charity Commission, please contact us at julian@almondtreeconsulting.co.uk to arrange free initial telephone discussion.