Six Thousand Charity Registrations Deemed Void
The Charity Commission for Northern Ireland (“the Commission”) published commentary on 29 June 2020 in respect of the judgment in McKee & Others v Charity Commission for Northern Ireland.
The judgment delivered in February 2020 held the Charity Act (Northern Ireland) 2008 did not provide the Commission authority to delegate decision making to staff acting alone and so the Commission must meet as a complete body to lawfully make decisions. Following this, the Commission have acknowledged it is likely previous decisions approving charity registrations were made by staff acting alone, out with compliance with the judgment and legislation. As such, all charities registrations in Northern Ireland prior to May 2019 are deemed void at this time. The number of charities impacted is substantial, with over 6000 registrations applications reviewed from the Commission’s establishment in 2009 up to May 2019. Affected charities should review the commentary from the Commission, as summarised below, pending further information on the proposed solution from the Commission and Department of Communities.
It was anticipated that the judgment would create untold disruption to the way in which the Commission operates. See our case update here. Following the judgment, concerns remained in respect of the validity of previous decisions of the Commission, which range from charity registrations to decisions to remove charity trustees following statutory inquiries. The publication from the Commission seeks to clarify those issues and reassure those charities and parties that may be affected.
The Commission set out the matter in issue is the level at which the decisions and not the content of any registration application nor the legislative criteria which charities were found to have met at the time their application was approved. Irrespective of the fact that the affected charities’ registration are now deemed void – this does not change the fact that they remain charities in law. To be a charity in law, the organisation must:
- Be established for charitable purposes; and
- Falls to be subject to the control of the court in Northern Ireland.
In accordance with article 1(1) of the Charity Act (Northern Ireland) 2008, which would have been affirmed for each subject charity during their registration application.
Undoubtedly, this acknowledgment may alarm those charities registered prior to May 2019, following what can be a lengthy and laborious process. Naturally, many charities will have queries so we have summarised a number of the Commission responses provided below.
1. Will this affect charity funding?
Charity registration is often a pre-requisite for funding bodies and there will be concerns that this decision will have an impact on current or future funding streams. The Commission has advised that they are contacting charity funders and support bodies to explain the present situation and reiterate that this does not erode the fact the institutions remain charities at law despite the temporary change in registration status. Should a funding application be rejected due to this situation, the Commission have requested that you contact them directly and they will liaise further with the funder.
2. Do charities need to apply for registration again?
No action is to be taken at this time and charities are advised to operate as normal whilst the Commission work with the Department of Communities to seek a permanent solution.
3. Will the register of charities be deleted?
The register will remain with the addition of a further note to identify those charities that have already been subject to a registration assessment by Commission staff and as a result is affected by the judgment. The charitable purposes and details will remain on the Commission’s website for transparency and accountability during this period of flux.
4. Will the Board of Commissioners now register all charities retrospectively?
Given the volume of applications that require renewed review and approval by the Board and compounded by the fact the Board is comprised of seven part time Commissioners, it is simply not feasible for such a task to be undertaken by the Board at this time. The Commission are exploring a permanent position in consultation with the Department of Communities with the view of securing a resolution.
5. Will charities still be registered?
The Commission has revised its internal processes to comply with the judgment and so registration applications are continuing. However, applicants should be aware that decision-making may be delayed as a result of the change in how the applications are approved and indeed the increased demand on the Board of Commissioners’ time. Organisations should proceed to submit their application as normal once called and by the set deadline. In terms of timescales - the Commission’s current target is to complete 60% of all registrations within seven months of receipt of a complete application. Further the Commission has confirmed that their work and oversight of the charity sector shall continue, irrespective of the judgment.
6. What Next?
On establishment of the Commission, it was not the intention for the Board to be involved in each and every decision required. As with many Boards, the primary role was that of governance and strategy. As such, the changes required to ensure all decisions are made in compliance with the judgment require a radical change to the current structure, operation and budget of the Commission. The Minister for the Department of Communities stated they will soon determine how the Department intends to address the issues raised by the Judgment. Whilst it has not been confirmed, it will most likely involve legislation reform.
In the interim, charities should continue to operate as normal, complying with all filing and reporting requirements in line with best practice. Should an affected charity intend to make a substantial decision, they may wish to seek legal advice in respect of how they should proceed.
For more information or advice, please contact a member of the Charities team.