The Charity Commission have published guidance on the changes due to be introduced to the Charities Act 2022.
It is expected that the changes will be implemented from Autumn 2022, with further provisions introduced in Spring 2023 and Autumn 2023. The current intention is for the changes to be introduced in three different stages, as outlined in the boxes below.
Summary of the key changes
‘Ex Gratia’ payments
New powers will be introduced which will enable some charities to make ‘small’ moral or ex gratia payments from their funds or property, without applying to the Commission. This will be based on factors including annual gross income and the amount of the request.
Trustees will be able to delegate the decision-making for ex-gratia payments to other individuals and groups within the charity.
If the payment exceeds a certain threshold, charities must continue to apply to the Commission for authority to be able to proceed. The different allowable thresholds can be found here.
There will be updates to how charities sell, lease or transfer land.
Greater flexibility will be introduced to make use of ‘permanent endowment’ – money or property originally meant to be held by a charity forever.
Charities will be able to pay trustees, in certain circumstances, for just providing goods to the charity. Using the statutory powers, trustees could be paid for:
- Services only, for example estate agency or computer consultancy;
- Services and associated goods, for example plumbing or painting service and any associated materials such as plumbing parts or paint; and
- Goods only, for example supplying stationery to the charity.
There will be a reduction in complexity around what trustees are required to do if fundraising appeals do not raise enough or raise too much.
The current requirement to wait six months for donors to ask for a refund will no longer apply.
If the excess donations can be spent on something other than their original purpose, and are less than £1,000, trustees can act without the Commission’s involvement if they comply with the new legal requirements.