Deregulation of charities

The Act introduces a number of changes which will allow charities to take certain actions without prior CC permission. However the CC will continue to require copies of the resolutions passed by the trustees. The Act will also give further authority to the CC to issue rulings without the need to consult the courts. These changes include:

• transferring assets of a small charity (income less than £10,000) - trustees could transfer the charity’s assets to another charity whose objects are consistent with their own
• changing the purpose of a small charity - trustees can replace their charity’s purposes with new purposes provided that the changes are consistent with what the charity was set up to do
• flexibility for transferring the assets of ‘failed’ appeals or trusts - the Act allows the CC and the courts to take into account current social and economic circumstances when approached by charities seeking more freedom in how they can use donated money when they cannot use it as originally planned
• effective use of permanent endowment - the Act now allows a wider range of smaller charities to spend the capital and for larger charities, power to do the same in certain circumstances if the CC agrees.
• making it easier to merge - where a merger is registered with the CC, gifts and legacies to the previously separate charities will automatically be transferred to the new merged charity. This will ensure that the spirit of legacies will be honoured if a charity merges.

Most of these changes become effective later in 2007.