Scottish charity law: consultation analysis

Introduction

About This Report

This report presents analysis of the Consultation on Scottish Charity Law which opened on the 7^th January 2019 and closed on the 1^st April 2019.  

Background

Scotland has a resilient, diverse and innovative charity sector.  There are over 24,000 charities on the Scottish Charity Register, from grassroots sport and youth clubs, to health and social care providers, to national museums and galleries.  Charities touch on almost every aspect of our day-to-day lives.

Charities also play a prominent role at a national level - bringing expertise, insight and challenge to national policy development and implementation.  Charities are key partners in setting the agenda and delivering across the Outcomes set out in the National Performance Framework.  Without charities the Scottish Government could not achieve its ambition of creating a fairer and more prosperous country.  

It is only with public support that charities can continue to make this impact, and it is therefore vital to maintain and increase public trust and confidence in the sector.

From the Scottish Charity Survey 2018 undertaken by the Office of the Scottish Charity Regulator (OSCR), it is clear how much of an impact transparency and accountability have on levels of trust.  For example, 88% of people reported that seeing evidence of a charity’s achievements and knowing how much of their donation went to the cause would improve their trust in charities^[3].  

It is now over 13 years since the introduction of the Charities and Trustee Investment (Scotland) Act 2005 (the 2005 Act), which established the current regulatory framework.  Over this time OSCR has shown its commitment to regulating in a pragmatic and proportionate way, balancing a widely preventative approach with strict enforcement where necessary.

Consequently, OSCR has built up considerable learning about the framework, and in line with its general statutory function to advise or make proposals to the Scottish Ministers on matters relating to its statutory functions, has proposed areas where the 2005 Act could be improved to better serve the public and charities, with a focus on increasing transparency, accountability and trust.

OSCR’s specific proposals were outlined in “A proposal for Modernisation of the Charities and Trustee Investment (Scotland) Act 2005"^[4].  These can be categorised across three thematic areas:

1. Promoting greater transparency and accountability.  Research undertaken by OSCR identified that public trust and confidence was directly related to the availability of information on a charity’s activities and operations e.g. performance, governance/management and regulatory protocols. 

2. Enhancing trust through stronger enforcement powers.  This is in recognition of gaps within the current legislative framework and changing legislation in other parts of the UK (e.g. charity law in England and Wales have adopted a different approach and process relating to the automatic disqualification for trustees).  OSCR want to ensure that where changes have been made in the rest of the UK that this has not created loopholes that could be exploited and leave Scottish charities vulnerable.

3. Streamlining operations and introducing efficiencies.  There is ambiguity and uncertainty linked to current legislation with regards to “reorganisation schemes”.  OSCR has advised that there requires to be greater clarity in the legislation - potentially saving charities both time and money. 

In light of OSCR’s proposals and wider stakeholder views, the Scottish Government ran the consultation to consider and consult on possible updates to the legislation.  Views were sought from members of the public, the charity sector, and anyone with an interest in charity law.  The focus was to learn from the expertise and experience of others, and to hear first-hand about what really makes an impact on levels of public trust and confidence.

Analysis Methodology 

The Scottish Government provided EKOS Ltd access to all responses via Citizen Space.  Where responses were not submitted by respondents through Citizen Space, the Scottish Government uploaded responses as separate documents on Citizen Space for inclusion in the overall analysis.

Quantitative (closed questions) and qualitative (open-ended questions) responses were exported into Microsoft Excel for subsequent analysis:

• All Yes/No questions have been presented in table format.
• Qualitative responses have been analysed to identify common themes and messages.

The following points should be noted:

1. When completing the consultation, respondents were not required to provide a response to every question.  Where this occurs this is noted as “Not Answered”. 

2. Some responses were not submitted by respondents through Citizen Space (26) and did not always follow the consultation structure (e.g. email or letter response to the Scottish Government).  These responses have been included within the analysis of open-ended questions.  In instances where the respondent did not provide a response to the Yes/No question set, these have been coded as “Not Answered”.  

Profile of Respondents

In total 307 responses were received to the Consultation on Scottish Charity Law, broken down by individuals and organisations in Table 3. 

Table 3: Profile of Consultation Respondents

	Number	Percentage
Individuals	127	41%
Organisations	180	59%
Total	307	100%

In discussion with the Scottish Government, we agreed how best to code “organisations”, Table 4.  In the remainder of the report we have sought to draw out any differences in responses across different sub-groups, where appropriate.

Table 4: Further Breakdown of Consultation Respondents

	Number	Percentage
Individuals	127	41%
Charity Sector	164	54%
Other	16	5%
Total	307	100%

Note 1: Charity Sector: local and national charities, membership/professional bodies, churches, third sector intermediaries.
Note 2: Other includes regulators, solicitors and consultants.

A diverse range of charity sector organisations responded to the consultation.  This ranged from local to national charities, and from membership bodies to cross-border charities, to name a few.  A “best fit” approach was adopted to provide a further breakdown, Table 5.  Charity organisations were coded based on the Scottish Government and consultant team’s combined knowledge of organisations and from details provided in the Respondent Information Form (RIF). Around two-thirds of charity sector organisations were national charities (including cross-border) or local charities.

Table 5: Breakdown of Charity Sector Organisation Respondents

	Number	Percentage
National	65	40%
Local	45	27%
Membership/Professional bodies	40	24%
Third Sector Intermediaries	14	9%
Total	164	100%

Note: National charities include some cross-border charities.

Report Structure

The remainder of the report has been structured in line with the ten sections (and associated sub-set of questions) outlined in the Consultation Paper:

• Section 1: Publishing annual reports and accounts in full for all charities on the Scottish Charity Register.
• Section 2: An internal database and external register of charity trustees.
• Section 3: Criteria for automatic disqualification of charity trustees and individuals employed in senior management positions in charities.
• Section 4: A power to issue positive directions to charities.
• Section 5: Removal of charities from the Scottish Charity Register.
• Section 6: All charities in the Scottish Charity Register to have and retain a connection to Scotland.
• Section 7: Inquiries into former charity trustees.
• Section 8: De-registered charities’ assets and public benefit.
• Section 9: The speed and efficiency of OSCR’s powers to gather information when making inquiries. 
• Section 10: The reorganisation of charities established under royal charter, warrant or enactment.

We have captured any wider points raised within the consultation, but which do not fit within any of the preceding Sections at Section 11. Appendix A provides details of consultation respondents who selected “publish response with name” in their RIF.