New regulatory guidance for charities considering involvement in the EU referendum campaign has sparked widespread criticism by sector leaders today over its “negative and prescriptive approach”.

The guidance issued this morning by the Charity Commission lists key objectives and urges charities to question whether involvement in the referendum campaign supports the charity’s objectives, whether it would create conflicts of interest or create additional risks such as loss of funding or reputational damage.

It also warns of “regulatory scrutiny” for charities who do not adequately “explain or justify” a decision to get involved.

“Trustees must be prepared to defend their decision to intervene. Failure to be able to do so could lead to regulatory action,” it says.

The guidance was met with criticism by sector leaders today, including by NCVO policy manager, Elizabeth Chamberlain, who described the guidance as a “negative and prescriptive approach” – and most likely “an unwelcome surprise for many”.

“Many charities have formed the view that the outcome of the referendum could have important consequences on their activities and mission and that they would therefore be failing their charitable purpose and beneficiaries if they did not speak out,” she said. 

“We are concerned that this guidance suggests that the Commission’s message to charities is that they cannot advocate a particular outcome in almost any circumstances, even if they have considered appropriate evidence and risks and come to a reasonable decision that doing so has an impact on the charity’s purposes.”

'Don't go there'

Chamberlain’s concerns are echoed by Jay Kennedy, director of policy for the Directory of Social Change.

“The tone is clearly trying to put charities and charity trustees off any involvement in the EU Referendum,” he said. “The subtext is very much ‘don’t go there – and if you do, you have to read a zillion bits of guidance, and even then you still risk getting in trouble’.”

“Clearly the Commission will be under considerable pressure given the current government’s anti-charity attitude (not just on campaigning). But I think it should be doing the opposite – encouraging civic engagement with the referendum via charities but enabling them to do it in a way that is legally correct.”

“Charities cannot be politically partisan and cannot campaign for particular parties or candidates. But this is clearly not a normal political situation - for example both the government and the official opposition are in agreement on staying in the EU, despite their bitter differences across many other issues.

"This issue is much wider than party politics – it is about the future governance of the UK. In one way or another, that will impact on many if not all charities and their beneficiaries.

“Why should charities be silent, one way or another, especially if it relates to their charitable purposes or the future well-being of their beneficiaries? This guidance is basically trying to scare trustees into keeping quiet, by pointing out as many risks and requirements as possible.”

She also said that the guidance appears to contradict a statement by prime minister David Cameron who last week urged “business NGOs and other organisations” not to hold back. 

'Too late'

Rosamund McCarthy, partner at Bates Wells Braithwaite also expressed concern over the timing of the referendum guidance.

“We have been calling for the Charity Commission to issue guidance on this issue for several months,” she said. “It is surprising that the Commission is issuing that guidance only now, when prudent charity trustees may already have decided if and how their charity will engage in the referendum debate.”

McCarthy said BWB was “concerned” that the tone of the guidance “could be seen to be at odds with the Commission’s previous suggestion that new guidance was not required as trustees would ‘instinctively understand’ how to strike the right balance”.

Furthermore, the guidance is “unclear and contradictory”, while “failing to resolve ambiguities” and suggesting that “matters of good practice are legal requirements”, she said.

“We remain of the view that charities can take part in the referendum debate, where trustees, having assessed the risks, reasonably believe that doing so will advance the purposes of the charity,” McCarthy said.

Further criticism of the guidance followed on Twitter, with Richard Hebditch, external affairs director for the National Trust commenting: “Particularly unenlightening guidance from Charity Commission on EU referendum. Anything that "engages in the debate" = political activity”.

Charity sector commentator and regular blogger for Civil Society News, Andrew Purkis Tweeted the guidance was “restrictive, negative and poorly drafted”.