Charities law and regulation: a consultation July 2013

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)

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 group2004 & 09 Law Commission; 2008 SoJ; VCS

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 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 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 Trust and confidence enhanced by definition & regulation

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

Timeframe 2013 July/August Phase 1 Consultation: Principles of law and regulation Phase 2 Sept/Oct Law drafting NovConsultation: The draft Law (Note: short consultation period) DecLaw lodged 2014 FebLaw debated by States Quarter 2 & 3Develop Charities Register Develop guidance Consultation on Compact Quarter Quarter 1Law in force Commence registration process Quarter 2 & 3Develop draft regulatory standardsConsultation on regulatory standards Amend Law or bring in powers to allow for regulation

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

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

Public benefit 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 Consideration will be given to: Individual organisations, not types of organisations Public opinion considered but not arbiter

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

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.

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

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

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

Phase 2: What regulation might look like? It must be proportionate and relate to organisations that receive public monies (donation or charity tax exemptions). It might include: 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

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

Questions