Definition

To establish a charity, an organization must first find at least 3 trustees whom will be responsible for the general control and management of the administration of the charity.^[3] The organization needs to have a charitable purpose that helps the public. Afterwards, the administration must select an official name and decide on a structure for the charity that will impact aspect such as who runs the charity and how does the charity is run.^[4] Subsequently, the creation of a governing document that explain how the charity is run is required. ^[5] Finally, an electronic application must be completed if the charity’s income is at £5,000 per year, or it’s a charitable incorporated organization (CIO). There are different rules for creating a charity in Scotland and Northern Ireland. ^[6]

Exempt, excepted, and other non-registered charities

Some charities are not subject to regulation by or registration with the Charity Commission, because they are already regulated by another body, and are known as exempt charities. Most exempt charities are listed in Schedule 3 to the Charities Act 2011, but some charities are made exempt by other acts. However exempt charities must still comply with charity law and may approach the Charity Commission for advice.

Some charities are 'excepted' from charity registration. This means they do not have to register or submit annual returns, but are in all other respects subject to regulation by the Charity Commission. A charity is excepted if its income is £100,000 or less and it is in one of the following groups: churches and chapels belonging to certain Christian denominations (until 2031); charities that provide premises for some types of schools; Scout and Guide groups; charitable service funds of the armed forces; and students' unions.^[7]

In addition, if a charity's income is below the normal threshold for registration (£5,000), then it is not required to be registered with the Charity Commission. Nevertheless, it remains subject to regulation by the Charity Commission in all other respects.

Charities operating across other national borders within the United Kingdom

Registration of a charity in England and Wales does not endow that status elsewhere, thus further registration has to be made before operating in Scotland or Northern Ireland.

Charities in Scotland are regulated by the Office of the Scottish Charity Regulator.

In Northern Ireland the Charity Commission for Northern Ireland was established in 2009 to replace earlier regulation by the Voluntary and Community Unit of the Department for Social Development, part of the Northern Ireland Executive.

Establishing Law

The Charities Act 2006 requires the Commission to be operationally independent of ministerial influence or control. Members of the commission, including the chair, are appointed by the Secretary of State for Culture, Media and Sport.^[8]

Charity Tax Law

The Finance Act 2010 extended charitable tax benefits (for example Gift Aid) to charities within EU member states, Norway and Iceland, rather than those just inside the UK.^[9]

Regulatory action

The commission carries out general monitoring of charities as part of its regular casework. In serious cases of abuse and regulatory concern, the commission has powers outlined in the Charities Acts to conduct statutory investigations. Before taking the decision to open a statutory inquiry, it will take the approach set out in its Regulatory and Risk framework.^{[10] [11]} The commission, therefore, began around 2007 to carry out an intermediate form of action described as regulatory compliance investigations. In 2010 it opened over 140 of these cases, compared to just three full statutory investigations. However, the legality of these actions was debatable as they lacked a statutory basis. A high-profile example was the commission's report into The Atlantic Bridge, after which that body was dissolved in September 2011. The commission announced in October 2011, in the context of cost-cutting and a re-focussing of its activities, that it would no longer carry out regulatory compliance investigations.^[12][13]

In 2012, the Commission refused to grant charitable status to Plymouth Brethren Christian Church, stating that it was unclear whether the body's aims were compatible with the requirement for charities to have a public benefit. The Commission stated that this was called into doubt as a result of the "exclusivity" of the body.^[14] The decision was discussed at a session of the Public Accounts Committee, during which MP Charlie Elphicke accused the Commission of being "committed to the suppression of religion". The decision was later reversed by the Commission.^[15]

Between 2022-23, the Commission removed 4,146 charities from the register and concluded 5,726 regulatory action cases (includes 68 statutory inquiries). ^[2]

Criticism

The commission was criticised after the Aberfan disaster in 1966 for its intransigence and decisions on what it allowed money from the disaster fund to be spent on. It sanctioned the use of £150,000 to remove remaining spoil tips from the area after the National Coal Board refused to pay for the work. It also proposed asking parents 'exactly how close were you to your child?'; those found not to have been close to their children would not be compensated.^[22]

Dispute

Orlando Fraser was appointed as Chair of the Charity Commission by the Secretary of State on a three-year term commencing from 25 April 2022.^[23] This appointment was not without controversy, including the refusal of the Digital, Culture, Media and Sports Committee to endorse the appointment.^[24]