3.4 version 1

1. Making changes to a charity: 2A guide to the Charities Reorganisation (Scotland) Regulations 2007For advisors of smaller charities 3.4 version 1

2. Charity reorganisation What are the 2007 Regulations? • made under ss39-42 of the Charities and Trustee Investment (Scotland) Act 2005 • in force from 31 May 2007 • applies to charities lacking the power to reorganise or amend their constitutions • provides a means by which OSCR may approve a reorganisation scheme for such charities 2

3. Charity reorganisation How does approval of reorganisation differ from other consents by OSCR? • more onerous procedure requiring more information • requires specific conditions to be fulfilled • allows for objections to be raised • requires the proposed changes to be publicised 3

4. Charity reorganisation What conditions must be met for OSCR to be able to approve a reorganisation? • the proposal is a ‘reorganisation scheme’ as defined in the Act s42(3) • one or more of the ‘reorganisation conditions’ is fulfilled • the scheme will have a ‘result as specified’ in the Act • consideration has been given to any ‘objections’ 4

5. Charity reorganisation Who can apply for a reorganisation scheme? • the charity trustees • someone acting on behalf of the charity trustees • unclear situations will be considered by OSCR on a case by case basis 5

6. Charity reorganisation How do you apply for a reorganisation scheme? • must be in writing • use of OSCR application form is optional but preferred • applications containing insufficient detail or explanation will be returned or additional information will be requested 6

7. Charity reorganisation What information must an application contain? • charity name and number • contact details of the applicant and their relationship with the charity • current constitution if available • most recent accounts or other financial information • statement setting out and explaining how one or more of the ‘reorganisation conditions’ is met • statement outlining how the proposed reorganisation will deliver one or more of the ‘specified results’ • details of the proposed reorganisation • draft new or amended constitution (where applicable) 7

8. Charity reorganisation What is a reorgansation scheme? The Act sets out three purposes of a reorganisation scheme: • variation of the constitution (whether or not in relation to its purposes) • transfer of property to another charity (whether or not involving a change to the purposes of the other charity) • amalgamation with another charity The Public Services Reform (Scotland) Act 2010 • reorganisation of restricted funds 8

9. Reorganisation conditions Why a charity’s purposes may no longer be appropriate • they have been fulfilled as far as possible or are adequately provided for by other means • they can no longer be given effect to • they have ceased to be charitable purposes • they have ceased to provide a suitable and effective method of using the charity’s property • the purposes of the charity provide a use for only part of its property • (Under PSRA Act 2010) other ‘desirable provisions’ may be introduced 9

10. Reorganisation conditions Conditions relating to other provisions • a provision of the constitution (other than one related to the charity’s purposes) can no longer be given effect to or is otherwise no longer desirable FOR EXAMPLE • a provision which prohibits the appointment of new trustees • a provision which grants ex officio trustee status to offices or positions which no longer exist • a charity has no power to expend its capital and has spent all of the ‘revenue’ and therefore can do nothing 10

11. Charity reorganisation results What must result from a reorganisation scheme? The Act requires a reorganisation scheme to lead to one or two kinds of result before it can be approved: • to enable the resources of the charity to be applied to better effect for charitable purposes consistent with the spirit of its constitution, having regard to changes in social and economic conditions since it was constituted • to enable the charity to be administered more effectively 11

12. Publicity requirements Publication on OSCR website • applies to all proposed reorganisation schemes regardless of size • OSCR will prepare a notice summarising details and reasons • charity trustees will be advised 7 days in advance of the publication period • published for minimum 28 days, may extend to 42 days 12

13. Publicity requirements Advertisement in a newspaper • applies to charities with an annual income of £250,000 or more • newspaper ‘circulating throughout Scotland’ or ‘circulating in a particular locality’ as appropriate • must appear during the first 14 days of the website publication period • advertisement need only appear once 13

14. Objections How are objections lodged? • must relate to the proposed reorganisation scheme, not a complaint on other matters • may be lodged at any time during the publication period or for up to 14 days afterwards • objector must give name and address, nature of interest in the charity (if any) and grounds for objection • copy of objection will be given to the charity 14

15. Objections How will OSCR consider objections? • do objections have a bearing on whether the ‘reorganisations conditions’ apply? • will the reorganisation lead to the required or intended ‘result’? • does the charity have other obligations or issues relating to the public interest or to its beneficiaries? 15

16. Timescales • letter of acknowledgement within 14 days of receiving an application • follow up letter usually within 28 days notifying the start of the publication period (assuming all information has been provided) • publication period will start not less than 7 days later • publication period of 28 or 42 days duration • newspaper advertisement (where applicable) during first 14 days of the publication period • objections may be lodged during or for up to 14 days after publication period ends 16

17. Decisions and reviews • OSCR decision within 6 months of the latest date on which objections may be lodged • OSCR may attach administrative conditions • OSCR will give reasons where a scheme is not approved • charity has right to request a review of the decision • objectors will notified of decisions within 7 days of it being made • no third party right to request a review 17

18. Consequences of approval • Charity must not take action until and unless OSCR has approved a reorganisation scheme • OSCR approval does not make the change, the charity must act to effect any changes • where a charity lacks the means to effect changes (eg. insufficient trustees) the application should include provision for doing so • charity must notify OSCR once any or all of the changes have been effected 18