Written by James Groves
On behalf of the National Postgraduate Committee (NPC) I am pleased to respond to your consultation paper on Scottish charity law reform. We feel the views of the NPC may be of particular interest because:
(i) we are an example of a UK-wide voluntary organisation which has deliberately chosen to establish itself under the Law of Scotland, with its permanent seat of administration in Scotland (in Troon, Ayrshire);
(ii) we have been refused recognition as a Scottish charity, despite our main objects being to benefit a section of the public (i.e. postgraduate students), due to the current restrictive definition of the word "charitable".
Response to section A - regulation and support
Are there currently organisations that you think should have charitable status and currently do not? Are there currently organisations that have charitable status that you think should not? Should the existing categories that define charitable status be amended or should we seek to provide a new definition? Should there be a complete statutory definition of a Scottish charity? Need that be the same as in England and Wales?
The present definition of "charity" in law is archaic, confusing and irrelevant to today's concerns. It excludes numerous organisations in the not-for-profit sector which we feel deserve the benefits and regulatory regime of charitable recognition.
Organisations whose objects benefit a section of the public, rather than the public as a whole, and organisations whose objects make reference to welfare, which is not held to be charitable in English law, cannot be recognised. This is, we feel, ludicrous.
The current definition, as an import from English law, sits very uneasily within the Law of Scotland. We would argue that the Scots common law concept of public trust provides a more natural basis for a future definition. It is easy to understand and is closer to people's intuitive ideas of what "charitable" means.
We therefore recommend:
(i) the present definition of ``charitable'' in law should be repealed in its entirety;
(ii) it should be replaced by a definition based on the Scots common law concept of public trust;
(iii) any not-for-profit organisation, constituted under Scots law, which satisfies such a definition should be entitled to charitable recognition in Scotland.
Should any changes recommended apply to new charities only, or should they be retrospective?
We believe they should be retrospective, to avoid the confusing scenario of there being two types of charity.
In addition to the tax benefits, what should the benefits of charitable status be, regardless of how charities are defined? Should all benefits be universally applied?
For many small organisations, the main advantage of charitable status is the perceived authenticity and integrity the name "charity" confers to the public - it acts as a "kitemark" for voluntary sector organisations, so increasing their chances of receiving funding from external sources.
We have no comment on the subjects of Educational Endowments or reorganisations of charities.
Should the three separate pieces of charity legislation be consolidated into one new Act?
Yes, to remove inconsistencies and avoid confusion.
Response to section B - operational effects of legislation
Do you think the current structure in Scotland works effectively?
From the point of view of organisations who aspire to charitable recognition, no.
FICO (Scotland) does not have the resources to provide proper assistance or guidance to such organisations.
Should Scottish charities be self-regulating, or subject to regulation from the state? If state regulation is appropriate, should it be reactive or proactive?
A proper system of state regulation should be introduced for all not-for-profit, voluntary sector organisations, not just those which are recognised as charitable for tax purposes. Any organisation which claims to exist for the benefit of the public, or a section of the public, should be subject to proper regulation by the public.
Should there be a new/separate organisation set up to grant charitable status? Should an office of Scottish charities registrar be established? If so, how wide should its role be?
We are in full agreement with the Dundee research report that there be established a Scottish charities registrar, empowered to recognize and advise charities.
Should charities be asked to pay to register? If so, should the full costs fall to the charity or should this be subsidised?
Registration should be free. It would be unfair to small organisations to ask for a registration fee.
We have no comment on the subjects of limited liability, trustee powers of investment, accounting requirements or dormant accounts.
Response to section C - advice and information for charities
Have you tried to get information and advice in the last two years and, if so, from whom did you get that advice?
The most valuable source of advice and guidance to us has been the Scottish Council for Voluntary Organisations (SCVO).
Is there anything that you have needed advice or information on but were unable to get that advice?
We have tried, without success, to obtain detailed advice from FICO (Scotland) regarding what steps we need to take in order that our objects be viewed as charitable.
Who do you think should provide written information and/or authoritative advice - should it be one of the existing organisations that help charities, or a different one? Do you currently pay for the advice you get?
The SCVO's work in this field is exemplary, and their role should continue. They should, however, receive more support in order to offer individual consultations to organisations.
All we pay is our SCVO membership fee.
Do you have any other comments about the provision of advice and information to charities?
The current advice and information structure is confusing and poorly resourced. No individual consultation service is provided to charities, or organisations aspiring to charitable recognition, by the government - most such organisations cannot afford the services of a solicitor, and such a service is badly needed.
The SCVO's work is invaluable in terms of offering general advice; however, the SCVO does not at present have the resources to offer consultations to individual organisations.
Response to section D - protecting the public
Should there be a register of those involved in governing charities?
Should there be mandatory or recommended training requirements, and if so what should they be?
All those involved in governing charities should be strongly recommended to undertake training on their legal responsibilities and duties. An SVQ should perhaps be made available to those undertaking such training.
Should a simple code of conduct be put in place for trustees and other governors, to promote integrity, ethical standards and security?
This would be helpful for both trustees and the public.
We have no comment on public charitable collections or other fundraising methods.
Information on the NPC
The National Postgraduate Committee (NPC) is the national representative organisation for postgraduate students in the United Kingdom. We are a UK-wide, voluntary sector, not-for-profit organisation, constituted under the Law of Scotland, with one paid elected officer, the General Secretary, and numerous unpaid elected officers. The General Secretary is our sole employee.
It has been our policy to seek charitable recognition since 1993; to date, FICO (Scotland) has refused to grant us this.
More information on the NPC may be found on our website, which is www.npc.org.uk.