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Charities

Answer

The information requested falls within the responsibility of the Charity Commission. I have asked the Commission's chief executive to reply.Letter from Sam Younger, dated 18 April 2012:"As the Chief Executive of the Charity Commission, I have been asked to respond to your written Parliamentary Question, on what grounds an organisation can lose its charitable status in the UK (103289).""As the registrar and regulator of charities in England and Wales, the Commission has a statutory function to determine whether organisations are or are not charities. According to the Charities Act 2011, an organisation is a charity if it is established only for charitable purposes (as defined in the Act) and falls within the jurisdiction of the High Court.""Where the purposes of an organisation originally established for charitable purposes cease to be charitable, for instance because of changing social circumstances, the organisation does not cease to be a charity. In this situation, the charity trustees are under an obligation to secure the effective use of the organisation's property for charitable purposes. This will involve the trustees either changing the objects of the organisation by following the appropriate procedure or applying to the Commission for a cy-près scheme. Such a scheme will change the purposes for which the property can be applied so that they continue to be charitable.""Where the organisation has never been established for charitable purposes and was registered by mistake, the organisation can be removed from the Register of Charities. This may have tax implications for the organisation concerned.""Where there is serious mismanagement or misconduct in a charity, this would not lead to the charity losing its charitable status. It is likely that in such circumstances one or more of the trustees will be in breach of their trustee duties. The Commission's main role in such cases is to protect charitable assets and secure their proper application. The Commission has wide powers (for example, freezing assets, suspending or removing trustees and directing certain actions). Our approach is to help the charity get back on track and continue its charitable mission.""A charity can wind up, provided any remaining assets (after the settlement of liabilities) are used for charitable purposes in accordance with the organisation's governing document or applied cy-près. Usually this entails transfer to another charity with similar purposes.""Please note that charities in Scotland and Northern Ireland fall within the responsibility of the Office of the Scottish Charity Regulator and the Charity Commission for Northern Ireland respectively."

Secondary information

Type

Written question

Reference

103289; 543 c554-5W

Session

2010-12

Subjects

Charities

Link

View this Written question on www.publications.parliament.uk