The Charities (Protection and Social Investment) Bill was introduced in the House of Lords on 28 May 2015.
“A bill that would protect charities from serious abuse and give charities the power to make social investments has been introduced.”
The Bill would protect people who present a risk of abuse and give the Charity Commission power to make orders disqualifying individuals from acting as trustees under certain circumstances. The Bill also provides clarification on social investments, giving charities greater legal power to invest their funds in a social manner.
The Commission has welcomed the additional statutory power and comments that this is a power that the Commission has long argued for and one that will enable it to better protect charities from being run by individuals who are clearly not fit to do so.
The Commission also reiterated that as this new power is significant it will only be used when there is a clear case for doing so and that the Commission should clearly explain what it will take into account before using the power.
The Minister for Civil Society, Rob Wilson, also welcomed the introduction, saying:
“It is important that we protect public trust and confidence in charities by equipping the independent regulator with the tools it needs to do its job. I am also pleased that the bill will take forward the Law Commission’s recommendation for a social investment power for charities. Bringing clarity to the law in this area will make it easier for charities to participate and achieve a positive social impact with their investments.”
Partner offers first thoughts on the new Charities Bill
Simon Bladen, Charity & Not-For-Profit partner at Hawsons, said: “This is certainly a welcome step in the right direction as charities rely heavily on public support for funding and voluntary commitments. It is absolutely vital the sector tackles abuse to maintain public trust and confidence.”
“The Bill has been greeted with cautious optimism within the sector and although the Commission is unlikely to use this additional power more than a few times a year, it is another measure which contributes to ensuring the protection of charities from individual or collusive abuse. The Bill also includes clarification on charities’ ability to make social investments, which we believe is another positive step.”
Simon added: “It is pleasing that the Bill will implement the Law Commission’s recommendation to give charities greater power to make social investments if they wish to do so. Social investments are investments that aim to achieve both a financial and a social return and, if right for the charity, can significantly help to overcome funding uncertainties.”
More from our charity experts
You can find all of our latest charity sector news and newsletters here.
If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.
Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.