Charities (Amendment) Bill - no progress expected until next year

31 Oct 2011 Denise Copeland    Last updated: 13 Aug 2014

The Minister for Social Development, Nelson McCausland, has still not disclosed his preferred course of action to sort out the public benefit test problem. 

In a briefing to the Committee for Social Development at Stormont on 20 October 2011, officials from the Department for Social Development stressed the importance of solving this legal issue so that the CCNI can begin registering charities. They also outlined the three options that the Minister is currently considering to rectify the situation and clarify section 3 of the Charities Act 2008:

Option 1:            

All charities in Northern Ireland would be required to demonstrate how they benefit the public, as is provided for in the Charities Act 2008, however it would be up to the Charity Commission for Northern Ireland (CCNI) to determine whether or not a charity is set up for the benefit of the public (as is the case in England and Wales) rather than having a prescribed test enshrined in legislation;

Option 2:            

Restore the presumption of public benefit to those charities working for the relief of poverty, the advancement of education and the advancement of religion (the three original heads of charity);

Option 3:           

Restore the presumption of public benefit only for those charities that are engaged in the advancement of religion. 

The first option was the course of action that the previous Minister, Alex Attwood, received accelerated passage for from the Committee for Social Development last December.  However the NI Executive would not accept this technical amendment to the legislation, preferring instead to restore the presumption of public benefit for those charities classified under the original heads of charity. The Executive’s intended course of action was not implemented before the Assembly dissolved in March 2011, as there was insufficient clarity to introduce a Bill to the Assembly at that time. 

The second option proposes to reintroduce the presumption of public benefit for the original heads of charity, dating back to the Pemsel classification in 1891. The principle that a charity must benefit the public in some way has always been central to the meaning of charity and in the 19th century, those charities working to advance education, advance religion or for the relief of poverty were all presumed to be for the benefit of the public. 

Presumptions unequal and unfair

A 19th century presumption that certain types of charity are established for the benefit of the public is not a prudent strategy for the 21st century and NICVA believes that all charities should be required to demonstrate how they benefit the public. 

The third option, to reintroduce the presumption of public benefit for religious charities only, could serve to create an unequal and unfair charity sector in which these types of charities would be treated more favourably than others.

At the Social Development Committee, Department Officials, in response to a question on the fears that religious organisations may not be able to demonstrate public benefit, assured the Committee that if a religious organisation were to hold an act of worship once a week then this would in itself satisfy the public benefit requirement.

Further questions around the reporting requirements for charities concentrated on the need for proportionate reporting. Some Committee Members were seeking assurance that a small charity, such as a gospel hall, would not have the same reporting requirements as a large organisation like NICVA. All charities, regardless of purpose, will be required to submit annual reports and statement of accounts to CCNI on an annual basis and this information will be open to public inspection. The accounting and audit thresholds for all charities should be ready for consultation in Spring 2012.

The work programme for the Committee for Social Development had included several dates for consideration of this issue for this Autumn, but the work programme has been revised again until such time as an amendment is approved by the Minister, hopefully by the end of this year. Then the Committee for Social Development can begin its consultation process on a Charities Amendment Bill early next year.  

For more background information and detail on how charity law reform has progressed to date visit our dedicated charity law reform page

by Denise Copeland

Governance and Charity Advice Manager

[email protected]

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