🌍✨ Navigating the New Charities (Amendment) Bill 2023

Directors - Roles - Snapshot - Knowledge Sharing - Lionheart -

Directors - Roles - Snapshot - Knowledge Sharing - Lionheart -

🌍✨ Navigating the New Charities (Amendment) Bill 2023 ✨

Lionheart Snapshot Series

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The Charities (Amendment) Bill 2023, emerging from extensive consultations within the charity sector, introduces several critical updates to the regulatory framework governing charities. These changes, aimed at enhancing clarity, accountability, and governance within the sector, also bring with them a varying degree of administrative implications for charities. We have set out our perspective on some the amendments as follows, focusing on their potential administrative burden and importance for streamlining compliance.

Lionheart Key Focus Areas:

1. Financial Reporting Adjustments

The elevation of the income and expenditure threshold for full statement accounts from €100,000 to €250,000 represents a significant reduction in administrative burden for smaller charities. This amendment, alongside the potential future introduction of SORP reporting requirements, is crucial for financial management and reporting, reflecting a major shift towards streamlined financial oversight.

2. Mandatory Notification Requirements

The Bill mandates written notification to the Charities Regulator on matters such as breaches of registration conditions, inaccuracies in trustee information, or the winding up of the charity. This requirement places a premium on maintaining up-to-date records and ensuring timely communication, representing a significant area of administrative diligence.

3. Internal Register of Members

All charities, regardless of their legal structure, are now required to maintain an internal register of members. This provision extends administrative duties to all organisations, demanding accurate record-keeping and potentially impacting a broad spectrum of charities.

4. Constitutional Amendments

Clarification on the need for Charities Regulator consent for certain constitutional changes introduces an additional layer of regulatory compliance. Amendments affecting a charity's name, purpose, income, and property clause, among others, now require oversight, necessitating a thorough review process and potentially legal consultation.

5. Definition and Duties of Charity Trustees

The Bill's explicit statement of the duties of charity trustees, alongside the clarification that a company secretary is not automatically a charity trustee, underscores the importance of clear governance structures.

This clarity, however, demands that charities ensure compliance through internal governance reviews and possibly restructuring, adding to the governance workload.

6. Approval of Certain Arrangements

The revised framework for the approval of arrangements between charities and trustees for goods and services alleviates previous contradictions but requires careful management of conflicts of interest and adherence to new procedural standards, impacting governance practices and administrative oversight.

7. Advancement of Human Rights as a Charitable Purpose

Including "the advancement of human rights" as a charitable purpose is a progressive step that broadens the scope of charitable activities. While it opens new avenues for charity work, it may also necessitate updates to organisational objectives and activities, with minimal administrative impact compared to other changes.

8. Deregistration Framework

The introduction of a High Court approval process for deregistration, aimed at preventing disproportionate penalties for minor breaches, is a protective measure for charities. Though it lessens the administrative burden by providing a judicial safety net, the procedural aspects of engaging with the High Court, if ever needed, could be complex and resource-intensive.

9. Managing 'Significant Events'

The decision not to include a legal requirement for reporting 'significant events' reduces immediate administrative pressures. However, the Charities Regulator's power to introduce guidelines on this matter means charities must remain vigilant and prepared to adapt their reporting processes.

Looking Ahead

While the Charities (Amendment) Bill 2023 presents many positive developments, some areas could benefit from further refinement. As the Bill progresses through the legislative process, its evolution will be instrumental in shaping the operational landscape for charities. It's imperative for organizations to stay informed and prepared for the changes ahead.

At Lionheart Corporate Governance, we are closely monitoring the Bill's journey and its implications for the charity sector. Our team is dedicated to providing tailored guidance and support to ensure your Charity navigates these changes effectively.

For a deeper dive and more detailed insights into how the Bill's proposed changes may impact your charity and for expert bespoke advice on adapting to these new requirements, please do not hesitate to reach out to Fiona at fiona@lionheart.ie.

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