Charity sector update - June 2023
|
| Introduction
We are delighted to share a round-up of recent articles published by members of our charity sector team. These insights include:
- Top tips for charities: property
- An introduction to charity corporate foundations
- Can your charity hold meetings electronically?
- How to structure and manage a charity's bank accounts
Please do not hesitate to reach out to your usual Penningtons Manches Cooper contact, or any of the team below, if you have any questions in relation to these topics
|
|
|
|
 |
Top tips for charities: property
What are the five key things trustees should consider when dealing with land and buildings owned by a charity?
- Check your constitution. Does the charity have the necessary powers to buy, sell, lease or charge the property in question? If not granted expressly in the constitution, often these powers can be found in legislation, but it is important to be clear at the outset that your charity has the powers it needs.
- Check your constitution (again!) What are the charity’s execution formalities when dealing with property? Often these are more stringent than for other types of transaction. If nothing is expressly set out in the constitution then the usual rules for the execution of deeds will apply.
- Are you making a ‘disposition’ of the land? This is broadly defined and catches most dealings with property, including less obvious examples such as granting easements and surrendering leases, as well as sales and granting leases. When making a disposition a charity must usually either obtain consent from the Charity Commission, or self-certify its transaction, following advice received from a qualified surveyor that the disposition provides the best value for the charity which can reasonably be obtained. The way this advice must be provided is specified by statute.
- Do any of the statutory exemptions apply to your transaction? There are some limited exemptions which mean that the full statutory procedure does not need to be followed for certain property transactions (although this does not mean that there are no statutory requirements to be met at all). The two most frequently used exemptions are: (i) a disposition to another charity other than for the best price that can reasonably be obtained, but which is authorised by the trusts of the first charity; and (ii) the grant of a lease for a term of less than seven years on the best terms that can reasonably be obtained by the charity.
- Is the property ‘specie’ or ‘designated’ land? Additional procedural steps (including a public consultation) must be carried out before disposing of land held on trusts, stipulating that it must be used for the purposes (including any particular purposes) of the charity. This property is known as ‘specie’ or ‘designated’ land. Common examples include recreation grounds, schools, churches and almshouses.
For further help with any of the issues discussed above, please contact Laura Gorman.
|
|
|
An introduction to charity corporate foundations
The number of charity corporate foundations (CCFs) continues to grow, especially in light of the current cost-of-living crisis, providing an effective structure for commercial companies to engage in charitable giving. This article provides an easy-to-understand summary for businesses that may be considering setting one up.
CCFs are set up by commercial entities, and are often created to support the business’s corporate social responsibility programme and give something back to the community. It is a way of showing that the business has a long-term commitment to supporting charitable causes.
A CCF will usually receive most of its funds from the business, which may be in the form of donations, or gifts in kind; for example, by providing use of office systems, employees and premises. The donations normally derive from the profits of the business, or from donations by the business’s staff, customers, or contacts.
|
|
|
Can your charity hold meetings electronically?
Many charities took advantage of the Corporate Insolvency and Governance Act 2020 during the Covid-19 pandemic. This enabled certain corporate bodies such as charitable companies, CIOs (charitable incorporated organisations) and registered societies to hold their meetings by electronic means, irrespective of whether their governing documents permitted this.
Following on from this statue, the Charity Commission issued their own guidance, which also applied to unincorporated charities who were not otherwise caught by the Corporate Insolvency and Governance Act 2020. This guidance stated that where the charity’s governing documents did not specifically permit meetings being held by electronic means, they would understand if charities chose to hold meetings electronically.
The provisions of the act ceased to have effect on 30 March 2021, and the Charity Commission also ended their flexible approach to electronic meetings on 21 April 2022.
|
|
|
How to structure and manage a charity's bank accounts
Charities can be structured in any number of different ways, whether a charitable trust, unincorporated association, a charitable company, or a charitable incorporated organisation, not to mention charitable community benefit societies or charities established by, for example, a Royal Charter.
The type of structure is important as it has an impact on all facets of a transaction, from who can be a party to the documents, to who can actually sign them, and, more fundamentally, whether the entity has the power to make the transaction in the first place.
As you can imagine, the result of this is that writing about charities can often create a rabbit warren of dos and don’ts dependent on the type of entity being discussed. As such, this article attempts to take a bird’s eye view of the interaction between charities and the world of finance, and in particular, banks.
|
|
|
Penningtons Manches Cooper LLP is a limited liability partnership registered in England and Wales (No. OC311575). It is authorised and regulated by the Solicitors Regulation Authority under number 419867. Reference to ‘Partner’ means members, employees and consultants of equal standing. A list of members is available for inspection on request.
The information and material is current at the date of publication and is not intended to constitute legal advice or recommendation.
You are advised to seek your own legal advice regarding any specific legal issue.
Our Privacy Notice may be viewed at www.penningtonslaw.com/privacy-policy. |
|
|
|
|
