Pp presentation re proposed amendments to the charities act 1978
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Pp presentation re proposed amendments to the charities act 1978

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  • A designate from the office of the Registrar General will serve as an ex-officio, non-voting member of the Charity Commissioners.
  • Ladies and gentlemen, These are the 13 proposed changes to the Charities Act 1978. We invite your feedback: your comments, suggestions and questions. You can share them with us this evening in a few moments or you can submit them to: -

Pp presentation re proposed amendments to the charities act 1978 Pp presentation re proposed amendments to the charities act 1978 Presentation Transcript

  • Proposed Amendments 17 th January 2012
  • Background
    • The first Charities Act was enacted in August 1965.
    • This Act was Repealed by the current 1978 Charities Act enacted in February, 1979.
    • Since then there has been a significant increase in the number of registered charities operating in Bermuda.
    • There has also been a widening of the scope of charitable purposes.
  • Background
    • It is the age of terrorism and money laundering. We must take steps to ensure that charities cannot be misused to finance unlawful activities.
  • What does this mean to you, the small charity?
    • First of all, what is a small charity?
    • The Institute of Chartered Accountants here in Bermuda has recommended that a small charity be defined as one which has an operating budget of less then $30,000 per year.
    • The proposed amendments fall under one of three objectives:
    • 1. To give the Charity Commissioners increased regulatory authority with respect to the administration of registered charities;
  • Objectives
    • 2. To increase the statutory powers of the Charity Commissioners with respect to monitoring the functions of charities;
  • Objectives
    • 3. To strengthen the reporting requirements of charities operating within and outside of the jurisdiction of Bermuda.
  • Administration
    • Current Act
    • Only charities soliciting funds from the public are required to register.
    • Proposed Change (1)
    • All organisations operating in Bermuda as charities must be registered, including those which receive funding from private sources.
  • Charitable Purposes
    • Charitable Purposes are currently defined as purposed which are beneficial to the public in general or to a section of the public, whether in Bermuda or elsewhere.
  • Charitable Purposes
    • The scope of Charitable Purposes will be expanded to include such matters as:-
    • Prevention or relief of poverty;
    • Advancement of the arts, culture, heritage or science;
    • Advancement of amateur sport and recreation;
    • Advancement of youth and community development;
    • Advancement of health and relief of sickness;
    • Relief of needy persons due to ill-health, disability or financial hardship;
    • Promotion of education and religion.
  • Administration
    • Current Act
    • The Charity Commissioners consist of between five and seven persons.
    • Proposed Change (2 )
    • The Charity Commissioners will consist of a minimum of five persons who have experience in legal matters relating to charities; financial accounting of charities and governance of charitable organisations.
  • Administration
    • Current Act
    • The law does not provide for a charity to raise funds on behalf of an individual .
    • Proposed Change (3)
    • The Charity Commissioners will have the ability to grant exemptions from the definition of charitable purpose in order to assist an individual.
  • Proposed Change (3)
    • In other words, the Charity Commissioners will have the authority to, in exceptional circumstances, allow a charity to raise funds on behalf of an individual.
  • Administration
    • Current Act
    • Where a Charity is dissatisfied with a decision of the Charity Commissioners, an appeal can be made directly to the Minister responsible for charities.
    • Proposed Change (4)
    • An Appeals Tribunal will be established.
  • Proposed Change (4)
    • An extra ‘layer' will be inserted between the Charity Commissioners and the Minister where a charity wants to appeal a decision of the Charity Commissioners.
    • The Minister will be able to appoint, from a group of experienced individuals, a Tribunal who will hear and decide upon the appeal.
  • Administration
    • Current Act
    • The Charity Commissioners have no legally prescribed mechanism by which the relevance of a charity to Bermuda can be determined.
    • Proposed Change (5)
    • The Charity Commissioners will use a Public Benefit Test in order to determine how relevant a charity is to Bermuda.
  • Proposed Change (5) (1)
    • The Four Principles or Foundations of the Public Benefit Test are:-
    • 1. There must be an identifiable benefit;
    • 2. Benefit must be to the public, or a section of the public;
    • 3. People on low incomes must be able to benefit;
    • 4. Any private benefit must be incidental.
  • Proposed Change (5) (1)
    • Public Benefit Test (cont’d)
    • Through consultation, charities will have the opportunity to assist in determining how this test be constructed.
    • Also, charities, before making an application of registration, will be asked to determine whether or not they intend to offer a service already provided by a charitable organisation.
  • Administration
    • Purposed Change (5) (2)
    • Notification of Tag Days. The Minister will also require the Registrar General to keep a register of the number and frequency of the tag days held in Bermuda by registered charities.
  • Administration
    • Current Act
    • There is no provision for the distribution of funds on the winding-up of charities.
    • Proposed Change (6 )
    • The constitution of the registering charity will be required to include provisions for winding up which are consistent with the stated charitable purpose.
  • Administration
    • Current Act
    • There is no provision to allow the publication in the Official Gazette of registration or deregistration (or suspension) of charities.
    • Proposed Change (7)
    • The Registrar General will be required to gazette the registration, deregistration (or suspension) of charities.
  • Powers
    • Current Act
    • The Charity Commissioners do not have the power to monitor and investigate complaints against individuals or charities that may be in contravention of the Act.
    • Proposed Change (8)
    • Where the Charity Commissioners have a reason for inquiring into the charitable operations of a charity, the Charity Commissioners will have the power to carry out an inquiry or appoint someone to investigate a charity on their behalf.
  • Proposed Change (8)
    • Charities could also be placed on probation if they have repeatedly failed to submit the required/requested documentation to the Charity Commissioners.
  • Powers
    • Current Act
    • The Charity Commissioners do not have the power to intervene into the charitable operations of an existing operating charity.
    • Proposed Change (9)
    • The Charity Commissioners will have the power to, including but not limited to, restricting the transactions into which the charity can enter.
  • Proposed Change (9)
    • The Government should have the power to protect the interests of the public with respect to the charitable operations of an organisation which have been brought to the attention of the Registrar General or the Charity Commissioners.
  • Powers
    • Current Act
    • The Charity Commissioners can only require an audit
    • for the preceding financial year.
    • Proposed Act (10)
    • The Charity Commissioners will be given the power to order forensic accounting reviews to examine the sources and uses of charitable funds managed by charities.
  • Powers
    • Current Act
    • There are neither offences nor associated penalties for the non-disclosure or non-distribution of funds collected from the public by or on behalf of charities.
    • Proposed Change (11 )
    • Offences and associated penalties that deal with fraudulent activity with respect to non-distribution or non-disclosure of funds will be created.
  • Reporting Requirements
    • Current Act
    • There are no prescribed minimum periods during which registered charities must keep financial records.
    • Proposed Changes (12)
    • Registered charities will be required to maintain and keep their financial records for a minimum of five years.
  • Reporting Requirements
    • Proposed Change (13)
    • A three-tiered structure for financial reporting will be introduced.
    • Small charities, managing $30,000 or less per year, will be required to provide annual financial reports;
  • Reporting Requirements
    • Medium sized charities, managing between $30,000 and $300,000 per year, will be required to submit annual unaudited financial statements.
  • Reporting Requirements
    • Large charities, managing over $300,000 per year, will be required to submit annual audited financial statements.
  • Proposed Change (13)
    • The Government does not propose to place a burden on the small charities with respect to their financial requirements.
    • Small charities will continue to be required to keep good records of income and expenditure and to be financially responsible to the people that their organisations were created to serve.
  • Feedback
    • By email: [email_address]
    • By mail:
    • Ministry of Government Estates and Information Services
    • Government Administration Building
    • 30 Parliament Street
    • Hamilton HM 12
    • Attn: Robert Horton, Permanent Secretary