New powers for charities

From 14 June 2023, the latest set of changes mandated by the Charities Acts 2022 came into force.

Changes now in place include simplified legal requirements that charities must comply with before selling, transferring or leasing land, and new statutory powers to enable:

• Charities to spend, in certain circumstances, a proportion or all of their permanent endowment fund where the market value of the fund is (£25,000 or less) without Commission authorisation.
• Charities to borrow, in certain circumstances, up to 25% of the value of their permanent endowment fund without Commission authorisation.
• Charities that have opted into a total return approach to investment to use permanent endowment to make social investments with a negative or uncertain financial return, provided any losses are offset by other gains.
• 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.
• The Commission to delay registration of a charity with an unsuitable name or delay entry of a new unsuitable name onto the Register of Charities. Working with the principal regulator, the Commission can also use these naming powers on exempt charities.

The Director of Legal & Accounting Services at the Charity 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. We have updated our guidance to help trustees understand the changes, and our contact centre is open to those who need further support.”