Key Changes Proposed by Charities (Amendment) Bill 2023

The release of the eagerly awaited Charities (Amendment) Bill 2023 comes after an extensive period of pre-legislative examination. This scrutiny involved collaboration and feedback from various organisations within the charity sector, including a joint submission and appearance before the Oireachtas committee by MHC, The Wheel, and Charities Institute Ireland. While some of the proposed changes are positively received by charities, there are provisions that may have adverse effects.

This legislation is poised to make a significant impact on our sector, introducing measures such as recognising human rights as a charitable purpose, outlining new duties and responsibilities for trustees, specifying the statutory functions of the Charities Regulator, and establishing the Charity Appeals Tribunal. It amplifies the regulator's powers and articulates trustees' duties for the first time in legislation.

Join us online on March 14th for a joint briefing with The Wheel on the Bill and its potential implications, featuring insights from Mason Hayes & Curran on legal aspects.

We encourage you to peruse the article issued by Mason Hayes & Curran earlier this week for more information on the bill.

Advancement of human rights as a charitable purpose

In a welcome and overdue update, “the advancement of human rights” will be included as a charitable purpose.

Charity trustee definition

The Bill addresses long-held concerns in the sector by clarifying that a company secretary is not automatically considered to be a charity trustee, unless they hold another office within the charity. While this is a positive development, clarification as to what other “office” might be included would also be welcome.

Duties of charity trustees

There is a welcome and clear statement of the duties of charity trustees, echoing principles already set down in Charities Regulator guidance.

Significant events

The previous Heads of Bill, published in 2022, had proposed a legal requirement to report “significant events” to the Charities Regulator. At the time, this caused considerable concern within the sector. These concerns have now been addressed, as this requirement is not included in the 2023 Bill. However, there is power for the Charities Regulator to introduce guidelines on managing “significant events”.

Members of a charity

The Bill introduces a new definition of the members of a charity. For charities that are companies, the members are considered to be those persons who are company members within the Companies Act 2014 definition. The Bill also proposes a requirement that all charities, regardless of their legal structure, must now keep an internal register of members. Currently, charities which are not companies are not required to do so.

Constitutional amendments

There is welcome clarification on the types of constitutional amendments that will require Charities Regulator consent. These include changes to a charity’s: name, objects, charitable purpose, income and property clause, and winding up clause. Breach of this requirement will be an offence and may also result in the charity being deregistered.

Mandatory notification

The Bill proposes the introduction of mandatory written notification to the Charities Regulator of certain matters including where:

• The charity breaches a condition of its registration
• Information provided in an application for registration regarding a charity trustee ceases to be correct, or
• It is proposed to wind up the charity.

Failure to notify will be an offence on the part of the charity trustees and the charity (where it is a body corporate).

Approval of certain arrangements

The Bill proposes a revised framework for the approval of certain arrangements between a charity and one of its charity trustees for the provision of goods and services. This provision also resolves the contradictory position many charities such as education bodies or public bodies found themselves in. This occurred where on the one hand the affected charities were required by legislation to have certain employees sit on their boards, but on the other hand were prohibited by charity law from doing so. Affected charities will now be permitted under charity law to have paid employees on their boards.

Deregistration of charities

Much concern was expressed in the sector over the potential in the Head of Bill for a charity to be deregistered for lesser breaches of the proposed provisions of the Heads of Bill, with devastating consequences for the beneficiaries and employees of that charity. The Bill introduces a new framework requiring High Court approval before a charity can be deregistered. A narrowing of the range of breaches which can result in deregistration, would be welcome, to ensure a proportionate approach to charity regulation.

Financial reporting

The Bill proposes a number of long-anticipated and welcome amendments which include:

• Bringing more charities outside of the requirement to prepare a full statement of accounts; by raising the income and expenditure threshold from €100,000 to €250,000
• Allowing for the future introduction of SORP reporting requirements

For more information on the likely impact the Bill's proposed changes will have on your charity, contact a member of Mason Hayes Curran Charity & Not-for-Profit team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.