The Charity Commission has published updated guidance as further changes from the Charities Act 2022 came into effect this week.
These include flexibility for trustees when seeking to dispose of charity land and new powers around the use of permanent endowment.
The changes now in place include statutory powers to enable charities to borrow, in certain circumstances, up to 25% of the value of their permanent endowment fund without Commission authorisation.
They also allow for the Commission to direct a charity to stop using a working name if it is too similar to another charity’s name or is offensive or misleading.
Trustees also now have discretion to decide how to advertise a proposed disposal of charity land and charities are no longer required to get Commission authority to grant a residential lease to a charity employee for a short periodic or fixed term tenancy.
Permanent endowment power ‘will be useful’
Richard Sagar, head of policy at Charity Finance Group, said: “The second tranche of changes introduced via the Charities Act provides a helpful reduction in bureaucracy for charities looking to use permanent endowment, dispose of charity land, and changing a charity name.
“The new statutory power for certain charities to borrow up to 25% of the capital value of their permanent endowment without Commission authority will be particularly useful for many. The new guidance from the Commission also helpfully provides examples for trustees to understand these new requirements.”
Sagar added that the greater flexibility in disposing of charity land, including widening the category of designated advisor and providing trustees with greater discretion of how to advertise disposal of charity land, “are helpful changes which are to be welcomed”.
Nonetheless, he added “it is somewhat disappointing that sections 18 and 23 of the Act will not come into force until later in the year”.
Aarti Thakor, director of legal and accounting services at the Commission, said: “The latest changes introduced by the Charities Act 2022 give the charities we regulate more flexibility and greater powers.
“These are positive changes that will impact a significant number of charities, so it is important all organisations, big or small, take the time to check what this means for them. This is especially important if they are looking, for example, to dispose of land.”
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