Compliance with UK Charities Act

Hello,

as some of you may know, we work with Benevity, which give some funds to us via the UK Online Giving Foundation.

Each year, we need to verify ourselves. So far, we had to send them just our nonprofit confirmation, but this year, they now also ask for (DeepL translated) this with a deadline of July 31.

“To remain eligible for donations, you must confirm that all funds will be used exclusively for charitable purposes under English law.”

“If your organization cannot confirm compliance with the legal definition of charitable purposes in England and Wales, you will no longer be eligible for disbursements through the Benevity platform.”

The UK Charities Act seems a long PDF file, and I wouldn’t lightly confirm our compliance.

Can anyone here help with assessing this?

We can always delist from Benevity, it would not be a major loss of income, but if we can stay there, I’d aim for that, of course.

Florian

Did they ask in German?

Yes, Benevity wrote to us in German:

Benevity zahlt Gelder über unseren Partner, die UK Online Giving Foundation (UKOGF) aus. Um weiterhin für Spenden in Frage zu kommen, müssen Sie bestätigen, dass alle Gelder ausschließlich für wohltätige Zwecke nach englischem Recht eingesetzt werden.

Bitte füllen Sie die jährliche Mittelverwendungserklärung bis zum 31. Juli aus. Wenn Sie diese Erklärung nicht abgeben, kann dies dazu führen, dass Sie von der Plattform entfernt werden und keine Spenden mehr erhalten können.

Dies ist zwingend erforderlich. Wenn Ihre Organisation die Einhaltung der lgesetzlichen Definition von gemeinnützigen Zwecken in England und Wales nicht bestätigen kann, sind Sie nicht mehr für Auszahlungen über die Benevity-Plattform berechtigt.

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The Charities act might be long, and even a bit convoluted, but the effective definition of “charitable purpose” appears in Part 1, Chapter 1, Section 3:

and we definitely fall under that. By decreasing order of match-of-purpose, this would be (1)(f): “promotion of arts, culture and science”, (1)(b) “the advancement of education”, (1)(h): “the advancement of human rights … or the promotion of … equality and diversity;”

If you want to play devil’s advocate, and you look at our goals as defined in the statutes, the third one is:

The foundation aims to promote … by supporting free software: … civic engagement for non-profit purposes

and that is rather vague and could be interpreted broadly. But in practice, it isn’t interpreted in a way that disagrees with the UK law.

The Charities Act is a quite long document, and the issue might be in the details, as with many tax regulations. I’d not feel comfortable to confirm it to Benevity without understanding these details, that’s why I seek for some insight here from someone who is familiar with the matter, e.g. UK residents who run nonprofits there, or UK accountants or the like.

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Asking for advice is a reasonable precaution.

Still, if we don’t get detailed legal counsel here - perhaps we could phrase our affirmation so that what’s clear is what we affirm, rather than whether the affirmation is enough for the charities act (e.g. “The TDF affirms that its funds are only used for goals covered by items such-and-such of the charities act” - which we are confident enough to affirm; and then Benevity can decide whether that’s good enough for them?

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I guess this company is not only collecting money in the UK, or?

Or other asked: is there a drop-in replacement or do they have some special feature (some plattform)? Or is it worth? (Remember the rather small amount of Amazon Smile)

I don’t know if we can add anything to the declaration. @S.t.e.p.h can you have a look if there is any free-form field?

They pay out via a UK nonprofit, so it needs to stick to the UK rules. It would be not different if TDF sent funds to other projects, then the German rules would apply.

The sum, in comparison to our overall income, is not large indeed, so if we drop the platform, it would not have a massive impact.

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Thanks for your response.

Not to nitpick, but “is it worth it?” can also be seen pretty simply: if the income from two weeks of nasty work can cover two months of that person’s salary, then it’s probably worth doing. Of course, it really depends on how much funding comes in.

(No need to reply to this, of course.)

I think the income is more in the region of a few hundred Euro per year, if at all - not more. Having a lawyer assess the situation likely costs more.

Apart from that, working two weeks on this, to stay with your example, means other things won’t happen for two weeks, and I doubt we can afford that actually.

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Declare conformity or not declare conformity by ticking or not ticking the box. No free-form field anywhere.

Ah, so, there’s a nuance here I missed earlier. We don’t need to confirm that everything the TDF does conforms, only that “all funds will be used etc.”, i.e. the funds we get from Benevity, will be so used. This is easier.

Ah, so, there’s a nuance here I missed earlier. We don’t need to confirm
that everything the TDF does conforms, only that “all funds will be used
etc.”, i.e. the funds we get from Benevity, will be so used. This is easier.

It shifts the problem a bit. It needs earmarking those funds and someone
competent to confirm that funds X, Y and Z were used - possibly in a
timely fashion - for those purposes. So I’d like to clarify the
requirements upfront, before receiving funds under those conditions.

Just to keep it simple: can we simply “assign” funds to our a11y dev? This also helps everybody, also in the UK. :sweat_smile:

As Florian says, earmarking is possible but not desirable. Maybe we will need to do that, but I’m working to find a UK charity law specialist for Florian to consult on this.

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Indeed, earmarking is not desirable, it comes with administrative costs for tracking. Also, I’d rather not draw conclusions that it’s just fine because it helps someone in the UK - tax regulations can be weird sometimes…

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