Hodgson defends proposed new threshold for small charities2

Governance | Tania Mason | 24 Jul 2012

Lord Hodgson has sought to reassure readers of civilsociety.co.uk that his Charities Act review proposals regarding small charities will not be the disaster that many in the small charities sector fear.

In a letter to the editor received this week, Lord Hodgson said that his recommendation to raise the threshold for compulsory registration with the Charity Commission to £25,000 has been “misunderstood”.

“Far from being damaging to smaller charities it will, in fact, empower them,” he said.

Lord Hodgson pointed out that his three recommendations on the subject are intended to work as a package; “it is my intention that they should only ever be implemented as a group”.

The three recommendations are:

That the compulsory registration threshold be raised to £25,000
That any charity of any size should have the legal right to register voluntarily online
Charities that wish to claim gift aid must register with the Commission

Hodgson said the proposals meant that smaller charities that don’t want to register can be saved the red tape, but that any that wish to do so, can. Currently any charities with income of less than £5,000 are not allowed to join the register at all.

Last week, Directory of Social Change CEO Debra Allcock Tyler and Foundation for Social Improvement director Pauline Broomhead both condemned the review recommendations. Allcock Tyler said small charities’ ability to register voluntarily would not be enacted for some time under Lord Hodgson’s proposals, and Broomhead said a charity number is vital for small charities to demonstrate their credibility to donors and other stakeholders.

Hodgson also sought to clarify his recommendation on trustee tenure. He wrote: “I have read that I have recommended that trustees should only serve for three years – not true.

"I have recommended that best practice should be for trustees to serve for three terms of three years, ie nine years. Further that there should be no compulsion associated with this – only a requirement to explain why a charity is not complying.”

Directory: Directory of Social Change (DSC) | Foundation for Social Improvement
Who's Who: Lord Hodgson of Astley Abbotts | Pauline Broomhead | Debra Allcock Tyler

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Kevin Curley CBE
25 Jul 2012

I think Lord Hodgson is missing the point about small charities and compulsory registration. Without this they disappear under the radar. The local Volunteer Centre, CVS or Rural Community Council cannot identify them and offer services It cannot connect them into the local sector. And without any possibility of contact with the regulator and public recognition on the Charity Commission website, fraud is more likely. Compulsory registration must stay.

[Reply]

Barbara
24 Jul 2012

Well now, it makes snese now. I can't imagine how Charity Commission would cope with enthusiastic registration of future 400k charities but it could push them more into clearing the register - you're 28 days late with annual report, you're out of register. End of story. This way opportunistic charitable creations to jump on grants would fail in a long term too.

In terms of trustees, I'm usually against limiting trusteeship in any way in order to protect civil liberties etc. but as a person working for quite a number of years with trustees I can tell that there is nothing more inhibiting for a charity than its trustees who are in office for more than 10 years. So the real question is: does the society prefers effective charities following its missions or does it prefer trustees-owned charities where mission is not that important but egoes are? Hmmm, not much choice for me, I say.

[Reply]

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