Key benefits of the Charities Act

The Charities Act is now law and will create greater flexibility for charities, as Mark Lewis explains.

Read our most recent update on the changes to the Charities Act here.

The Charities Act became law in February 2022, however, this is only the beginning of the story as whilst the new Act is to be welcomed it will be implemented on a phased basis. The Charity Commission is currently considering the order in which the various segments will come into force, some of which require secondary legislation, and in addition there will be changes to Charity Commission guidance.

Lodders’ charity law expert Mark Lewis sets out the various key features in the Charities Act that will be helpful and create greater flexibility for charities:

1. Greater flexibility with regard to the disposal and mortgaging of land, subject to various safeguards.
2. The ability to change governing documents which will be aligned as between unincorporated charities and corporate charities – whether companies or charitable incorporated   This should make it more straightforward for unincorporated charities to change their objects.
3. Greater flexibility to deal with permanent endowment funds and in particular simplifying the power to spend permanent endowment capital and creating a statutory power to borrow against permanent endowment.
4. It will be easier for small ex gratia payments to be made.

Mark will be issuing further clarification with regard to these and other aspects, with further articles in relation to the particular matters when they come into force.  As well as highlighting the relevant revised Charity Commission guidance where this is appropriate. To receive these articles directly into your inbox, please click here to subscribe.