The Charity Commission’s stance on Brexit.
The EU referendum period will run from 15th April 2016 to 23rd June 2016. With the referendum period fast approaching, some charities may be considering getting involved in debates on Brexit.
Charities must be established for charitable purposes. Generally, political purposes are not charitable. However, political campaigning, or political activities can be carried out by charities in the context of supporting their charitable purposes. Unlike general or other types of campaigning, political campaigning must not be the continuing and sole activity of the charity. A charity can choose to focus most, or all, of its resources on political activity for a period. Charity trustees need to ensure that this activity is not, and does not become, the reason for the charity’s existence.
The Charity Commission has the power to take action against a charity if its trustees have failed to comply with their duties and responsibilities when partaking in a political activity. The Commission issued ‘The European Union Referendum – the Charity Commission’s regulatory guidance for charities’ in March 2016 which is to be read and followed, in conjunction with ‘Speaking out: guidance on campaigning and political activity by charities (CC9)’ and ‘Charities, Elections and Referendums’.
The European Union Referendum guidance highlights 5 key elements that charities should consider before getting involved with the debates:
- Does the proposed political activity support, and is it incidental to the charitable purposes? This is a legal test and a charity must be able to satisfy that their political involvement is incidental, ancillary or subordinate to the charity’s purposes in order for the involvement to be lawful.
- The need to manage conflicts of interest and other risks, including the risk of exploitation for personal or political purposes; the risk of a possible loss of funding; and risks to reputation. Charity Trustees must act in the charity’s best interest and have a duty to avoid exposing the charity to unnecessary risk. Any conflict of interest or risk should be avoided and where it cannot be avoided, it must be identified and strictly managed.
- Written records of decisions should be made and kept. Decisions may usually be made in meetings and recorded in minutes. It is important to record how particular decisions regarding political involvement are made including how the action supports the charities purposes; how the activity is in the best interest of the charity; the risks involved and how they will be avoided; and any conflict of interest and how they will be dealt with.
- The role of the Commission where a charity’s activity has breached guidance or law. If a charity is suspected of, or has been complained of, non-compliance, the Commission will question the charity on its decision on political involvement and may take further action if it believes that a charity or its trustees have failed to comply with its guidance or the law.
- The requirement to register with the Electoral Commission where necessary. If a charity intends to spend more than £10,000 on campaigning during the referendum period, and if it is eligible to, it must register as a campaigner with the Electoral Commission. (The Commission does not regulate compliance under electoral law as this is dealt with by the Electoral Commission.)
The Commission has expressed that it will be closely monitoring charity involvement with the Brexit debate and will take action where necessary. Where a charity is unsure as to whether or not it can carry out or conduct a certain political activity, it should ask the Charity Commission for advice.
As an example of the Commission’s serious and robust attitude towards compliance with its guidance and the law, during the run up to the General Election in May 2015, the Commission dealt with 17 cases relating to non-compliance by charities. This figure does not include the separate complaints and issues raised with the Commission which the Commission considered but did not deem necessary to take regulatory action.