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Charities

Charities

Alice Unwin is a solicitor who qualified with BDB into our charities team; Helen Fry, a fourth seat trainee, is completing her training with the team. Alice and Helen give their insight into charities law.

What is charity law?

In the strictest sense, charity law is the legislation that applies specifically to charities. The most important is the Charities Act 2011, which sets out the criteria that organisations must meet in order to
be recognised as charities, regulates the ways in which existing charities can use their assets, and governs the powers and responsibilities of charity trustees. In addition, other charity legislation deals with specific areas of a charity’s activities, for example, engaging professional fundraisers, use of the Gift Aid scheme and sponsorship.

Essentially, a charity is an organisation that has been formed exclusively to carry out one or more charitable purposes for the benefit of the public. It can take any one of a number of different legal forms: nowadays, many charities are companies, but others are unincorporated associations, charitable trusts, charities established by royal charter and charitable incorporated organisations (CIOs) (a relatively new legal form designed exclusively for charities). Charites are involved in a wide variety of activities, for example, some provide training opportunities to young people, some are involved in healthcare of the elderly or disaster relief, and others provide grants to aspiring musicians.

Although they must not distribute profits, most charities operate as businesses and, as such, they are subject to many of the rules and regulations that apply to profit-making organisations. In addition, charities have to deal with an extra layer of regulation to which non-charitable companies are not subject; for example, regulations dealing with voluntary income (on which most charities rely to some extent) and with the various tax reliefs and exemptions available to them.

This means that a charity lawyer will often find that, in addition to charity law advice, their clients require assistance with a range of matters including company law, trusts, employment, real estate, intellectual property and data protection.

Key skills for charity lawyers

All lawyers need to enjoy working with people, whether their clients are individuals or institutions. This is particularly true for charity lawyers, as our clients often have significant emotional attachment to their charity’s cause, and there is a need to be sensitive to this. Charities value lawyers with a problem-solving approach; rather than simply dealing with problems as they arise, it is better to pre-empt them, identifying and overcoming any potential obstacles well in advance so that the charity can achieve more effectively what it has set out to do.

It is important for charity lawyers to understand the environment in which their clients operate and to tailor their advice appropriately to each. Practical experience is therefore invaluable and many lawyers at Bircham Dyson Bell have worked for a charity previously or volunteer as charity trustees or school governors, which helps them to give practical, commercially astute advice.

As charity law cuts across various legal disciplines, charity lawyers often need to work in cross-departmental teams, and we have close working relationships with our colleagues in real estate, employment and litigation in particular. We also work in conjunction with other professional advisers, such as accountants, investment managers and pensions specialists, so as to be able to give our clients as complete a picture as possible.

Realities of the job

As well as advising charities and social enterprises on their governance and internal processes, we help them to navigate their relationships with others, including regulatory bodies, stakeholders, contractors and local authorities. We assist with dispute resolution, planning/development issues and employment concerns; we also help charities through parliamentary procedures, provide advice in relation to inquests, and advise on developments in social investment, and fundraising regulations. In addition, it is becoming increasingly common for us to assist charities with reputation management, social media issues and data protection. Our main point of contact with clients is normally one of the trustees or the chief executive.

We also regularly respond to consultations and comment on draft legislation, and are actively engaged with sector bodies such as the Charity Law Association and the Charity Tax Group.

We work with a wide range of charitable organisations, including bodies established by royal charter or created within statutory frameworks, NHS charities, charities forming part of an international network, and those with complex trading structures. Our clients include BBC Children in Need, The Soldiers’ Charity, Nuffield Health, Relate, the World Association of Girl Guides and Girl Scouts, St John Ambulance, Blue Cross, Jewish Care, the British Film Institute and the Garden Bridge Trust.

A typical day for a trainee might involve attending a breakfast briefing, where you will have the opportunity to listen to a speaker from the charity sector and meet people who work for charities, accompanying a partner to a meeting of a board of trustees, compiling an application to register a charity with the Charity Commission and carrying out research on charity auctions for another member of the team. While the partner has overall responsibility for each matter, the trainee will often deal with the day-to-day running of client files and, in many cases, will be the client’s first point of contact. Charity law trainees therefore enjoy significant responsibility and client contact from the outset.

Developments in charity law

Charity law continues to be in a state of flux. Recent developments include the introduction of the CIO, the evolution of the social investment market and a greater cross-over between charities and social enterprise.

Since the introduction of the government’s ‘big society’ agenda, charities have become the subject of greater publicity than ever before. The stories are not always positive, however – the Cup Trust made front pages in 2013 amid allegations that it was part of a tax-avoidance exercise, while the Charity Commission’s decision to ask
charities to cut ties with the organisation Cage due its alleged links with Islamist extremism generated headlines earlier this year. In recent months there has been an unprecedented level of media interest in ‘aggressive fundraisers’ and ‘rogue charities’, in response to which the government proposes to introduce new fundraising regulations via amendments to the Charities (Protection and Social Investment) Bill.

Of course, legal developments aimed primarily at other areas can impact on charities too. We regularly respond to government proposals in relation to business and company law on the grounds that the proposed changes would impact charities (often in ways the government may not have considered).

Bircham Dyson Bell

BDB is home to award-winning lawyers advising commercial companies, public sector bodies, charities and private individuals. Recognised as one of the top five specialist charity law firms, we act for over 450 national and international charities, civil society organisations and social enterprises. We are a top 100 firm based in London with around 270 people.

Our lawyers work with clients across all major practice areas, and our charities and not-for-profit team works alongside skilled experts across corporate and commercial law (including intellectual property), planning and major projects, public law and real estate. These areas build on the traditional strengths that the firm has in private wealth, employment and litigation.

For further information about the firm, see: www.bdb-law.co.uk

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