Charity Facts

Changes in charity law


The Charities Act 2006

The new Charities Act is a radical revision of charity law, with all organisations now required to demonstrate both that they have 'charitable purposes' and that they provide a public benefit in order to be legally defined as a charity.

The Act is creates a modern legal framework that meets the needs of the voluntary sector in the 21st century - and protects charities' credibility with the public.

The charitable purposes set out in the Act are:

  • The prevention and relief of poverty
  • The advancement of education
  • The advancement of religion
  • The advancement of health
  • The advancement of citizenship or community development
  • The advancement of arts, heritage or science
  • The advancement of amateur sport
  • The advancement of human rights, conflict resolution or reconciliation
  • The advancement of environmental protection and improvement
  • The relief of those in need, by reason of youth, age, ill-health, disability, financial disadvantage or other disadvantage
  • The advancement of animal welfare
  • The promotion of the efficiency of the armed forces of the Crown
  • Other purposes recognised under existing charity law or considered "analogous" to any of the above

Even if an organisation has one of these purposes, it will still have to prove it offers a public benefit. The Charity Commission will be empowered to make decisions about whether or not an organisation can become a charity under the new Act.

The Act has had a lengthy passage through the parliamentary process, but received Royal Assent on November 8th 2006 and is now law. A timetable for implementation is expected shortly.

A parallel process is taking place in Scotland, where The Charities and Trustee Investment (Scotland) Bill was passed by the Scottish Parliament on 9th June 2005 and received Royal Assent in July 2005.