Bold reform of the law is needed if charities are to thrive

Last week, the Scottish Government announced its next steps in the review of Scottish charity law following a consultation period on its proposals to update charity legislation for the first time since 2005. Many in the sector – including SCVO – were hoping for reform but were left underwhelmed with a paper that simply hadn’t gone far enough; not in scope nor by how it was designed. 

While the proposals put forward for consultation – all of them linked to recommendations from the regulator, OSCR – undoubtedly covered areas of importance, there was something missing. Rather than being driven by a vision of what it means to be a modern charity thirteen years since the legislation was introduced, it felt an attempt to patch up regulation without a clear story running through it.

The proposals received broad support but, as highlighted in our own response, this comes with a caveat; far more detail and collaboration with the charitable sector is needed to make sure any proposals, if implemented, are done so in a way that satisfies not just government and the regulator but enhances trust in the legislation from charities themselves. The assurance from the Scottish Government that they will work together with the sector on this is welcome.

But it’s the Scottish Government’s commitment to a conversation on a wider review of charity law that’s most welcome. What this means is up for interpretation, but it’s an important signal of a willingness to broach the reality of the divide between what the charitable sector was hoping for and what was offered. Perhaps more appetite exists to reprogramme our approach to Scottish charity law?

The external pressures on our sector require more than regulation simply catching up; we must ask how legislation can support charities to thrive amongst the magnitude of oncoming change. Weathering crisis through better legislation is one thing but forging ahead with shaping the narrative of the value and importance of charities is another.

The charitable sector has always been subject to unhelpful publicity and that microscope won’t disappear. And recent scandals linked to safeguarding and fundraising only help to allow public opinion to manifest in this way. One of the best things we can do to support, promote and develop the sector is to form our own narrative around the modern charity in Scotland today.

Despite the challenges, public trust in charities remains high. But this trust is fragile, and the review of charity law must set changes in motion that help the charitable sector take control of its future. Our best way of jump-starting this is by acknowledging that the charity test – also referred to as the public benefit test – needs reform.

I might be the first person to liken charities to the Cornish Pasty but hear me out. The charity test is about defining the genuine charity and protects the quality and reputation of those with the name. As with rules that protect the future quality of this much-loved delicacy, it’s a test that decides who gets charity status and who won’t. 

It might sound unusual to hear a sector body calling for more ambitious regulation, but it’s a sign of our confidence in the ‘charity brand’; it might have taken a few knocks of late, but we’re ready to embrace and lead change to strengthen what is our protected indication of shared principles and values. Being a charity is special and having confidence in this will allow us to shape a narrative around charities that supports the wider public to continue to feel the same way.

The commitment from the Scottish Government to a conversation on wider reform of charity law is an important step, but as champions of the charitable sector, we can’t kick this or any other tricky issue – like safeguarding – into the long grass. Whether it’s working to develop existing proposals or on more ambitious reform, it’s only by working together – the sector, the regulator and government – that it might be possible to redesign charity law, so it reflects the true story of the modern charity today and in the years to come.

SCVO will continue to engage with the sector as we look to work with the Scottish Government to develop proposals. Contact paul.bradley@scvo.scot to share your views.