Charities law and regulation: a consultation

1. Charities law and regulation: a consultation July 2013

2. Background Definition: 1961 Income Tax Law drawn from 1601 Statute of Elizabeth: • excludes major areas of bona fide charitable activity • public benefit not a requirement purpose can be charitable but not activities   Regulation • no regulatory body to oversee establishment and activities of charities (although do operate regulated financial services environment)

3. 2 core issues to address • Modern definition: • Charities can more readily identify themselves and their intents and purposes • Proportionate regulation: • Protect public trust and confidence Trusts Law working group 2004 & 09 Law Commission; 2008 SoJ; VCS

4. Trust and confidence enhanced by definition & regulation • Public want: • charities to be held to account for how they spend their money • information to be in the public domain so it can be interrogated. • (research does not distinguish between public & private charity) • Public charities have a “covenant of trust” essential to: • raising funds from the public • reaching stakeholders who participate in activities and service provision • influencing public opinion and creating positive social and behavioural change

5. 2 phases • Definition • Commissioner • Public Register • Regulation • phase one • phase two • Guidance; public benefit • Compact • ESV Capture information

6. Timeframe

7. Definition Charities test A body is a charity if: • it only delivers charitable purposes and; • it provides public benefit in Jersey or elsewhere And • it is on the charities register. Some existing “charities” may fail the charities test

8. Charitable purposes poverty animal welfare religion Saving lives education health Relief for those in need (age; health; disability; financial hardship; other) Human rights, conflict resolution, reconciliation Arts, heritage, culture, science Environmental protection or improvement Public participation in sport Religious or racial harmony Recreational facilities to improve life Citizenship/ Community development Equality and diversity …plus other analogous purposes

9. Public benefit Consideration will be given to: • any benefit gained by members of that body or others, other than as members of the public • any disbenefit to the public • where benefit is restricted to a section of the public, whether conditions associated with gaining benefit is restrictive Individual organisations, not types of organisations Public opinion considered but not arbiter

10. Register Benefits Who? Information in the public domain Right to call yourself a charity Impact on non-registered private charities? Public charities? Private charities? Name & address of charity Information provided to Commissioner Name of trustees (exceptions: private family trusts/safeguarding?) Registration form: • Charitable purpose and public benefit declaration • Fit & proper persons declaration Description of aims and objectives Phase 2 Accrue tax benefits Establishing document & Accounts Charities number Establishing documents & accounts

11. Trustees/committee or board members Must act in the interest of the charity inc: • ensure the charity acts in a manner consistent with its purpose • cannot be remunerated • can be disqualified if convicted of an offence involving dishonesty; bankrupt or removed as a trustee by the England or Scottish Charities Commission • No single trustees or family only trustees “Fit and proper” persons declaration.

12. Charities Commissioner Independent of the States or any other organisation Phase 1 • set up a Public Register • issue guidance: public benefit • determine which organisations pass the charities test • Issue Jersey Charities number • investigate & remove charities from Register

13. Charities Commissioner cont.. Phase 2 • issue guidance on regulatory standards • hold charities to account for compliance with standards • investigate & remove from Register if not meeting regulatory standards

14. Appeals Stage 1 Appeal Panel (Representatives of Jersey Voluntary and Community Partnership; 2 x lay members) Stage 2 Independent review by qualified expert (possibly UK or Scottish Charities Commissioner) Stage 3 Royal Court Appeal

15. Phase 2: What regulation might look like? It mustbe proportionate and relate to organisations that receive public monies (donation or charity tax exemptions). It mightinclude: • submission of annual accounts • standards to which those accounts must adhere • reserves policy • standards around governance regulation and independent recognition can have fundraising and volunteering as well as safeguard against potential abuses of charitable status

16. Support • One stop shop registration with not-for-profit and income tax • Pro-actively contact organisations on the Taxes Office “charities list” and help thorough the registration process • transfer period during which organisations on the Taxes Office “charities list” can continue to receive tax exemptions prior to registration  • Lead in time from adoption of Law to registration and from registration to regulation allows for development of user friendly guidance

17. Questions