2006 Charities Act vs. 2011 Charities Act

Attribute	2006 Charities Act	2011 Charities Act
Definition of charity	Charity is defined as an organization established for charitable purposes	Charity is defined as an organization established for charitable purposes and must provide public benefit
Registration requirements	Charities must register with the Charity Commission if their annual income exceeds a certain threshold	Charities must register with the Charity Commission regardless of income
Public benefit test	Charities must demonstrate that they provide public benefit	Charities must meet a stricter public benefit test
Trustee duties	Trustees must act in the best interests of the charity	Trustees must act with reasonable care and skill, and must avoid conflicts of interest

Introduction

The Charities Act of 2006 and the Charities Act of 2011 are two important pieces of legislation that govern the operations of charities in the United Kingdom. While both Acts aim to regulate and support charitable organizations, there are significant differences in their provisions and impact on the sector. In this article, we will compare the attributes of the 2006 Charities Act and the 2011 Charities Act to understand how they have shaped the charitable landscape in the UK.

Registration and Regulation

One of the key differences between the 2006 Charities Act and the 2011 Charities Act is the process of registration and regulation for charities. Under the 2006 Act, charities were required to register with the Charity Commission for England and Wales if their annual income exceeded £5,000. However, the 2011 Act raised this threshold to £25,000, allowing smaller charities to operate without the burden of registration. This change has been welcomed by many in the sector, as it has reduced the administrative burden on smaller charities and allowed them to focus on their charitable activities.

Public Benefit

Another important aspect of both Acts is the requirement for charities to demonstrate public benefit. The 2006 Charities Act introduced a statutory definition of public benefit, which required charities to show that their activities were for the public good. However, the 2011 Charities Act made significant changes to this requirement by removing the presumption that certain purposes are for the public benefit. This change has led to greater scrutiny of charities' activities and has forced organizations to clearly demonstrate how they are benefiting the public in order to maintain their charitable status.

Trustee Duties

Trustee duties are another area where the 2006 Charities Act and the 2011 Charities Act differ. The 2006 Act set out the duties of charity trustees, including the duty to act in the best interests of the charity and to avoid conflicts of interest. However, the 2011 Act expanded on these duties by introducing a duty of care, which requires trustees to exercise reasonable care and skill in their roles. This change has raised the bar for trustees and has led to greater accountability within the sector.

Reporting Requirements

Reporting requirements are also an important aspect of charity regulation, and both Acts have provisions in this area. The 2006 Charities Act required charities to submit annual reports and accounts to the Charity Commission, which were then made available to the public. The 2011 Charities Act built on this requirement by introducing a new Statement of Recommended Practice (SORP) for charity accounting, which set out best practice guidelines for financial reporting. This change has improved transparency and accountability within the sector, as charities are now required to adhere to higher standards of financial reporting.

Fundraising Regulations

Fundraising regulations have also evolved between the 2006 Charities Act and the 2011 Charities Act. The 2006 Act introduced regulations around fundraising activities, including the requirement for charities to have a written fundraising strategy and to comply with the Fundraising Code of Practice. However, the 2011 Act strengthened these regulations by introducing new requirements for fundraising agreements and contracts, as well as provisions for the regulation of professional fundraisers. This change has improved the regulation of fundraising activities and has helped to protect donors and the public from fraudulent or unethical practices.

Conclusion

In conclusion, the 2006 Charities Act and the 2011 Charities Act have both played important roles in shaping the charitable sector in the UK. While the 2006 Act focused on registration and regulation, the 2011 Act introduced significant changes to public benefit requirements, trustee duties, reporting requirements, and fundraising regulations. These changes have had a positive impact on the sector by improving transparency, accountability, and governance within charities. Overall, both Acts have contributed to a stronger and more effective charitable sector in the UK.