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Charity acting against its objects...

Charity acting against its objects...

Postby Hairyloon » Thu Oct 01, 2015 10:48 am

What action can be taken against a charity if it is found to be planning to act contrary to its charitable objects?
As a purely hypothetical example, imagine if the National Trust decided to sell off a significant historic house to a property developer who would convert it to flats.
The trust would presumably argue that the money raised would enable it to better achieve its objects in other areas.

Presumably a complaint can be made to the Charity Commission, but what if they accepted that argument: does the public have any other recourse?
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Re: Charity acting against its objects...

Postby atticus » Thu Oct 01, 2015 12:05 pm

Charities Act 2011 is the relevant legislation.

ss315 et seq set out the powers of the First Tier Tribunal (Charity) which may determine references made to it by the Charity Commission or the Attorney General.

If you are dissatisfied with the responses you are getting from the Commission, you may wish to try getting the AG to do something, possibly going via your MP.
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Re: Charity acting against its objects...

Postby dls » Fri Oct 02, 2015 4:27 pm

HL, what you describe is very unlikely to be 'against' a charity's objects.annot.

You need also to look at the effect of ss39 and following of the Companies Act 2006 - in essence a company can do anything which its memorandum does not say it cannot do. A charitable company will say that it cannot do anything which is not of a charitable nature, but beyond that its powers (whether explicit or not) are unlimited.
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Re: Charity acting against its objects...

Postby Hairyloon » Fri Oct 02, 2015 10:42 pm

dls wrote:HL, what you describe is very unlikely to be 'against' a charity's objects.annot.

What I described was an example to illustrate the point, but if the objects of a charity are to preserve the nation's heritage and they can dispose of said heretage simply to make money, then I am entirely baffled as to the meaning and purpose of "charities".
And I have no clue as to what is meant by "annot", unless it is a typo.
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Re: Charity acting against its objects...

Postby Slartibartfast » Sat Oct 03, 2015 7:31 am

Hairyloon wrote:if the objects of a charity are to preserve the nation's heritage and they can dispose of said heretage simply to make money, then I am entirely baffled as to the meaning and purpose of "charities"..


You are misrepresenting the hypothetical charity's motives. They are not doing this "simply to make money". As you said above, "The trust would presumably argue that the money raised would enable it to better achieve its objects in other areas".

Charities have to make hard decisions about priorities all the time. The RNLI might decide to close a particular lifeboat station, the RSPCA might decide to euthanise a particular animal rather than provide veterinary treatment.
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Re: Charity acting against its objects...

Postby theycantdothat » Sat Oct 03, 2015 9:11 am

The question posed is a pertinent one when it comes to a charity whose purpose is to preserve something*. Can it dispose of an asset if the asset is one of the things it is supposed to be protecting? Whether a charity is complying with its objects and what its powers are are generally two different questions, but in the case of a charity set up to preserve something the two can become entangled. If we ask whether such a charity can dispose of all its "objects" assets the answer surely has to be that it cannot because if it did it would be unable to comply with its objects. If it cannot dispose of all its "objects" assets the question of whether it can dispose of some of them is not straightforward.

A charity set up to preserve, say, the vicarage where the Brontës grew up surely cannot dispose of the vicarage. Would a charity set up to preserve properties associated with famous authors have to justify a decision to sell one of them? If not one, then what about two or half of them?

*The National Trust may not be a good example as it is governed by several Acts of Parliament which may prohibit the sale of certain assets - I am not going to read them to establish if it is the case.
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Re: Charity acting against its objects...

Postby Hairyloon » Sat Oct 03, 2015 9:28 am

Slartibartfast wrote:
Hairyloon wrote:if the objects of a charity are to preserve the nation's heritage and they can dispose of said heretage simply to make money, then I am entirely baffled as to the meaning and purpose of "charities"..


You are misrepresenting the hypothetical charity's motives. They are not doing this "simply to make money". As you said above, "The trust would presumably argue that the money raised would enable it to better achieve its objects in other areas".

Oversimplifying perhaps, but not misrepresenting.
Charities have to make hard decisions about priorities all the time.

Indeed they do, and to do so they must balance one thing against another. In this case (though not in the example) the balance appears to be clearly tipped in that direction.

theycantdothat wrote:*The National Trust may not be a good example as it is governed by several Acts of Parliament which may prohibit the sale of certain assets - I am not going to read them to establish if it is the case.

Granted, but if we step aside from that, it illustrates the principle reasonably well.
Alternatively perhaps consider a charity to promote sports that sells off the town's only sports field.
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Re: Charity acting against its objects...

Postby Slartibartfast » Sat Oct 03, 2015 12:30 pm

Hairyloon wrote:Alternatively perhaps consider a charity to promote sports that sells off the town's only sports field.


If it does this with the intention of using the sale value to promote sports by another method, I see no problem.
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Re: Charity acting against its objects...

Postby Hairyloon » Sat Oct 03, 2015 12:50 pm

Slartibartfast wrote:
Hairyloon wrote:Alternatively perhaps consider a charity to promote sports that sells off the town's only sports field.


If it does this with the intention of using the sale value to promote sports by another method, I see no problem.

I could accept that if it was to raise money for a specified project in the same town, but not if it simply disappears into the county's general coffers.
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Re: Charity acting against its objects...

Postby dls » Sat Oct 03, 2015 5:06 pm

HL, I rely think that you need to think through first just what position the 'objects' have.

If you want hard limits to the extent of what a charity cannot do, you look at the powers. These are strangely named nowadays, since the only effective limitations are limits directly imposed by the articles.
The trustees/directors have almost a complete discretion as to what they consider in their best judgment reflects the charity's purpose.
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