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The Charities (protection and social investment) Act 2016

This page provides guidance on the Charities (Protection and Social Investment) Act 2016 which came into force in July 2016, with some provisions coming into force on 1st November 2016.

We have also produced a guidance note to help charities and auditors comply with the additional requirements featured below.

The Charities (Protection and Social Investment) Act 2016

Sections 13 and 14 of the Charities (Protection and Social Investment) Act 2016 (the 2016 Act) contain a range of provisions aimed at raising standards in fundraising. These respond to a perceived need among the public for charities’ fundraising activities to be better regulated following media interest in the death of poppy seller Olive Cooke.

Sections 13 of the 2016 Act, which will have the most immediate impact on fundraising, comes into force from November 2016 (with section 14 having been in force since July, creating new reserve powers for statutory regulation of fundraising if the new self-regulatory system is not successful). The new provisions relate to:

  • information provided in agreements between charities and professional fundraisers / commercial participators
  • information provided as part of some Charities’ annual reports.
  • reserve powers to introduce statutory regulation

Agreements with Professional Fundraisers / Commercial Participators

Who is affected: Any charity registered in England and Wales with a fundraising agreement with a “commercial participator” or professional fund-raiser” (we will call these commercial organisations) as defined in the Charities Act 1992 (the definition not amended by the new Act).

Timescale for implementation: With immediate effect from 1st November 2016.

The Act requires (by amending section 59 of the Charities Act 1992) that fundraising agreements now include the following clauses:

  • details of any voluntary fundraising scheme or standard that the commercial organisation undertakes to be bound by;
  • details of how the commercial organisation will protect vulnerable people and others from unreasonable intrusion on a person’s privacy, unreasonably persistent fundraising and undue pressure to donate; and
  • details of arrangements enabling the charity to monitor compliance with the requirements in the agreement.

Annual Reports

Who is affected? Larger charities required to audit accounts under section 144 of the Charities Act 2011.

Timescale for implementation: Within the first financial year starting after November 1st 2016.

The Act requires (by adding a new section 162A to the Charities Act 2011) that charities which are required to have their accounts audited include a statement about the following in their trustees’ annual report:

  • The charity’s approach to fundraising activity, and in particular whether a professional fundraiser or commercial participator was used.
  • Details of any voluntary fundraising schemes or standards which the charity or anyone fundraising on its behalf has agreed to.
  • Any failure to comply with a scheme or standard cited.
  • Whether and how the charity monitored fundraising activities carried out on its behalf.
  • How many complaints the charity or anyone acting on its behalf has received about fundraising for the charity.
  • What the charity has done to protect vulnerable people and others from unreasonable intrusion on a person’s privacy, unreasonably persistent approaches or undue pressure to give, in the course of or in connection with fundraising for the charity.

Reserve Regulatory Powers

Who is affected? All charitable institutions in England and Wales which fundraise.

Timescale for implementation: Already in force (although the Government has stated that these powers may only be invoked in the event that self-regulation, via the new Fundraising Regulator fails).

The Act (by adding new sections 64A and 64B to the Charities Act 1992) makes explicit that the Government may use its powers to give statutory backing to fundraising self-regulation, by requiring charities to:

  • comply with requirements imposed by a fundraising regulator;
  • have regard to guidance issued by a regulator;
  • pay fees to a regulator (an amount determined by the regulations or by the regulator itself);
  • be registered with a regulator for the purpose of its regulation of charity fundraising.

The Government may also confer further powers on the Charity Commission to regulate fundraising through existing legislation.

The Government has said that it will resort to these reserve powers in the event that self-regulation fails.