The Charities (Amendment) Bill 2023 proposes a variety of amendments to a range of areas including governance and financial reporting for charities. For education bodies, there is good news as it has been recognised that education bodies are already subject to oversight by and reporting obligations to other government entities such as the Minister for Education or the Minister for Further and Higher Education, Research, Innovation and Science. The Bill exempts education bodies from certain provisions of charity law where such obligations already exist.
Our Charity & Not-for-Profit team recently highlighted some of the proposed changes in the Charities Bill. In this article, we review the changes contained in the Bill of specific interest to education bodies.
Definition of education body
The Charities Bill removes university foundations from the definition of an education body and removes any other body established solely for the purpose of funding not more than one institution of higher education. As a result, this expands the obligations of university foundations and other similar bodies under charity law. However, it does not alter the charitable status of these bodies.
It is of note that not all charities with charitable purpose of the advancement of education are education bodies for the purposes of the Charities Act 2009. For example, patron bodies of schools, private junior schools and professional bodies registered as charities that may have an education function do not fall within the definition of an education body under the Charities Act or under the new Charities Bill. These organisations, if they are indeed charities, will continue to be subject to the wider provisions of the Charities Act.
Exclusion of liability for trustees of certain education bodies
The Charities Bill offers protection for members of boards of management of recognised schools from personal liability in any civil proceedings, where they can demonstrate that they acted in good faith in those roles. This protection also extends to members of management committees of education support centres. This is an important new section and will be welcomed by those members as it aligns with the protection offered under the Education Act 1998.
Appointing an employee as a charity trustee and payments to charity trustees
The Charities Bill introduces a new provision allowing a charitable organisation, that is an education body, to appoint a current employee as a charity trustee or to engage a charity trustee for the provision of services on a paid basis, without seeking approval from the Authority. This is most welcome, particularly for education bodies which may be required to have a senior executive officer sit on their board. Any remuneration must not exceed what is reasonable and proportionate having regard to the service provided by the relevant person. The Charities Bill will also allow other charities to appoint an employee as charity trustee and to pay trustees for services rendered. However, those charities will have to seek prior approval from the Charities Regulator and fulfil certain other criteria.
In addition, the Charities Bill opens up the possibility of a charity trustee of an education body receiving remuneration for the role of charity trustee of the education body where that is in accordance with another piece of legislation. Other pieces of legislation would include the Education Act 1998, the Higher Education Authority Act 2022 or the Universities Act 1997.
The Charities Bill also clarifies that an education body may provide funding to a charity trustee in the trustee’s capacity as a student of that education body. This would permit a charity trustee to be eligible to avail of a scholarship or grant funding from the education body.
Publishing the annual report
Education bodies are already exempt from certain financial reporting provisions of the Charities Act 2009. These include the obligation to keep accounts or to undergo an annual audit. This is due to the fact that education bodies have existing obligations to the Minister for Education/Minister of Further and Higher Education in that regard. The Charities Bill now proposes an exemption for education bodies from having their annual reports published on the Charities Regulator website. This reflects the current practice of the Charities Regulator.
The requirement to provide information
The Charities Bill will give power to the Charities Regulator to request information on education bodies from the Minister for Education or the Minister for Further and Higher Education, as appropriate.
Minimum number for charity trustees
New provisions in the Charities Bill set out the requirement for a charitable organisation to have at least three charity trustees. The Charities Bill excludes education bodies from this requirement.
Similarly, where the Charities Bill requires a charitable organisation to keep a register of members, education bodies are exempt from the requirement.
Principal duties of charity trustees
The Charities Bill also brings a welcome codification of the duties of charity trustees. This approach echoes the principles already laid down in guidance issued by the Charities Regulator and in company law. These duties apply equally to trustees of education bodies.
The Charities Bill proposes that the duties of a charity trustee of a charitable organisation shall include the following:
- To act in good faith in what the charity trustee considers to be the best interests of the charitable organisation
- To act honestly and responsibly in the advancement of the charitable purpose of the charitable organisation
- To avoid any conflict between the charity trustee’s duties to the charitable organisation and the charity trustee’s other (including personal) interests
- To exercise the care, skill and diligence which would be exercised in the same circumstances by a reasonable person having both:
- The knowledge and experience that may reasonably be expected of a person in the same position as the charity trustee, and
- The knowledge and experience which the charity trustee has
Investigation of affairs of charitable organisation
Education bodies will be subject to the powers of the Charities Regulator regarding enforcement, including the appointment of an examiner or inspector to the charity. The Charities Bill requires the Charities Regulator to notify the Minister for Education or Minister for Further and Higher Education where an examiner or an inspector is appointed in respect of an education body.
Next steps
The Charities Bill was formally introduced to the Dáil by Minister of State, Joe O’Brien in January 2024 and will now undergo detailed consideration by both the Dáil and Seanad. This may result in a range of further amendments to the Charities Bill before its final enactment. We will continue to monitor its progress and provide further updates throughout the process.
For more information on the likely impact of the new provisions on your education body’s operations, contact a member of our Education or Charity & Not-for-Profit teams.
The content of this article is provided for information purposes only and does not constitute legal or other advice.
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