Relevance to the higher education sector
The majority of higher education providers in England and Wales are exempt charities. Only a small number of providers are charities and registered with the Charity Commission.
What is an exempt charity?
The guidance confirms the charitable status of exempt charities and that they are required to comply with charity law.
Exempt charities are not registered with the Charity Commission. They are regulated by a principal regulator and can only be investigated by the Commission as a part of a statutory inquiry at the request of the principal regulator.
Principal regulators for higher education
Each regulator has agreed a memorandum of understanding (MoU) with the Charity Commission as to how the two bodies will work together to share information and regulate the relevant exempt charities. Details of the new MoU between the Charity Commission and the OfS have recently been published.
How are exempt charities regulated?
The exempt charities’ principal regulator is the body responsible for regulating the charity under the relevant legal framework.
A principal regulator:
- must promote charity trustees’ compliance with charity law
- checks charity law compliance
- can ask the Commission to open a statutory inquiry into an exempt charity
- works with the Commission to make sure exempt charities are accountable to the public
- receives any reports of matters of material significance made by the auditor of an exempt charity
Responsibilities of trustees of exempt charities
All charity trustees, including trustees of exempt charities, share the same general duties and responsibilities. These include:
- Ensuring the charity is carrying out its purposes for public benefit;
- Complying with the charities governing documents and the law;
- Acting in the charities best interests; and
- Acting with reasonable skill and care
Specific matters or topics
Specific matters and topics included the Charities Commission guidance include:
- Accounts, auditing and annual reports;
- Land disposals and mortgages;
- Rules on disqualification of trustees and senior staff;
- Funding raising; and
- Financial benefits for exempt charities
The Charity Commission’s updated guidance on exempt charities offers a useful introduction and overview for the trustees of higher education providers which are exempt charities, as well as professional staff working in the area of governance.