In 2005, two major pieces of legislation that will radically alter the way charities are administered are to come into effect.
April 14, 2007 (Press Release) --
Charity Funding - Market Assessment 2005
In 2005, two major pieces of legislation that will radically alter the way charities are administered are to come into effect. The first is the Charities Bill, the report stage of which is provisionally scheduled for 12th October 2005, and the second is the Community Interest Company (CIC) Regulations 2005 (see below).
The main objective of the Charities Bill is to build public confidence in charity giving by tightening regulation. This Bill affects England and Wales, as charity law is devolved in Scotland and Northern Ireland. Scotland introduced its own Charities and Trustee Investment (Scotland) Bill in November 2004.
The definition of a charitable organisation is also changing, with a responsibility to show interests in public benefit, the definition of which is being considerably widened. However, a further development in organisations serving the community is the creation of a new legal entity the CIC. From July 2005, new companies may register as CICs with Companies House in the usual business forms as a private company, limited either by shares or by guarantee, or as a public limited company (PLC) but with restrictions on the way funds may be distributed. While not enjoying the same kind of tax breaks as charities, regulation of CICs is intended to be lighter than that of charities. However, the restrictions include capped dividends to shareholders and `asset locks', which ensure that profits are distributed not to members but rather to the community.
Both of these measures along with the `make poverty history' emphasis taken by the Prime Minister to the G8 Summit in July 2005 indicate that the current Government places a great deal of importance on creating strong frameworks for giving for both governments and individuals.
However, research commissioned by Key Note exclusively for this report shows that the percentage of the population making donations to charity has dropped considerably. In 2003, 80% of the adult population had given to charity in the previous 12 months. In 2005, this figure had dropped to 66%. Furthermore, this figure could be much lower if those giving only to the tsunami appeal were discounted. There are also fewer responding to television appeals: just 22% of respondents agreed that they usually make a donation in response to a television appeal in 2005, compared with almost half in 2003.
Charities, especially charity umbrella organisations such as Charities Aid Foundation (CAF), are doing all that they can to make giving as easy as possible for donors and to provide as much reassurance that their donations are being spent wisely. The research shows, however, that these are not particular issues for donors they know how to give.
Charity Funding - Market Assessment 2005
In 2005, two major pieces of legislation that will radically alter the way charities are administered are to come into effect. The first is the Charities Bill, the report stage of which is provisionally scheduled for 12th October 2005, and the second is the Community Interest Company (CIC) Regulations 2005 (see below).
The main objective of the Charities Bill is to build public confidence in charity giving by tightening regulation. This Bill affects England and Wales, as charity law is devolved in Scotland and Northern Ireland. Scotland introduced its own Charities and Trustee Investment (Scotland) Bill in November 2004.
The definition of a charitable organisation is also changing, with a responsibility to show interests in public benefit, the definition of which is being considerably widened. However, a further development in organisations serving the community is the creation of a new legal entity the CIC. From July 2005, new companies may register as CICs with Companies House in the usual business forms as a private company, limited either by shares or by guarantee, or as a public limited company (PLC) but with restrictions on the way funds may be distributed. While not enjoying the same kind of tax breaks as charities, regulation of CICs is intended to be lighter than that of charities. However, the restrictions include capped dividends to shareholders and `asset locks', which ensure that profits are distributed not to members but rather to the community.
Both of these measures along with the `make poverty history' emphasis taken by the Prime Minister to the G8 Summit in July 2005 indicate that the current Government places a great deal of importance on creating strong frameworks for giving for both governments and individuals.
However, research commissioned by Key Note exclusively for this report shows that the percentage of the population making donations to charity has dropped considerably. In 2003, 80% of the adult population had given to charity in the previous 12 months. In 2005, this figure had dropped to 66%. Furthermore, this figure could be much lower if those giving only to the tsunami appeal were discounted. There are also fewer responding to television appeals: just 22% of respondents agreed that they usually make a donation in response to a television appeal in 2005, compared with almost half in 2003.
Charities, especially charity umbrella organisations such as Charities Aid Foundation (CAF), are doing all that they can to make giving as easy as possible for donors and to provide as much reassurance that their donations are being spent wisely. The research shows, however, that these are not particular issues for donors they know how to give.
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