The International Journal
of Not-for-Profit Law
VOLUME 11, ISSUE 1, NOVEMBER 2008
By Alison Dunn
Since the low general election turnouts in 2001 and 2005, there has been much debate over the declining participation of the electorate in the political process in England and Wales and the wider UK, and whether it signals a broader decline in the public’s political engagement.1 It has been argued that the low electoral turnout is a product of the country’s political culture and its institutions and can only be remedied by a change in the electoral process.2 But the decline in voting is just one factor in the concern over the public’s apparent diminishing input into political and decision-making processes. The public’s identification with political parties has fallen to almost a quarter of what it was in the 1960s, and attendant party membership has also plummeted.3 Lack of trust in politicians and a failure on the part of the main political parties to clearly communicate their policies and distinguish them from those of the other parties have been identified as key factors in the decline.4 As explanations, these sit alongside the marginalization of the ordinary voter in the face of corporate interests and non-voters’ perceptions that election results are foregone conclusions.5
But the involvement of the public in the political sphere is not as arid as voting turnout and traditional party membership would suggest. If one looks beyond party political lines and traditional forms of democratic engagement, the picture of public participation looks more positive. Many non-voters engage in activity and advocacy within their communities. Indeed, membership in and financial and human resource contributions to voluntary and community organizations remain strong and may well signal a countertrend.6 This form of non-party political engagement, often termed “good causes activism” or “social advocacy,” has prompted the view that there is not so much a decline in political engagement as disaffection with traditional party politics.
Whilst no evidence suggests that contributions to voluntary and community organizations inexorably lead to a propensity to vote, attempts to reengage the public through the sector have been a focus for the current Labour government for some time.7 This concern has at least two aims. The first is to capitalize on the trust placed in voluntary and community organizations and the capital therein for service provision. This enables the state to take advantage of the skills within the sector, often for lower cost, and to offer “choice” to the public, however illusory. Service provision has come to define much of the UK voluntary and community sector in recent years and has caused sharp divisions and differences of opinion on the value of such activities, particularly in terms of whether they threaten the independence of organizations and the wider voluntary and community sector through “state capture.”8
Rather than focus upon that debate, this article is concerned with the second aim of the drive to involve voluntary and community organizations in reengaging the public. This aim, to provide “voice,” is to utilize the trust placed in the sector and to take advantage of their reach and beneficiary base in order to reinvigorate interest in civic affairs through engagement and civic renewal with a particular focus upon stimulating community cohesion.9
The need for voluntary and community organizations to be put at the heart of government initiatives in service delivery and civic renewal has meant that closer attention is being paid to the activities they undertake and how they are regulated. Broader pressures too have had an effect. In particular, the rise in terrorism and counter-terrorism strategies prompted by the alleged use and abuse of sector organizations by terrorist groups have put a focus on regulating the activities of voluntary and community organizations. Whilst much of this regulation has focused upon transparency and governance in terms of financial and resource administration and risk management, the broader political activities of organizations have not escaped scrutiny. This article considers recent legal developments in England and Wales concerning the regulatory barriers that restrict charities from enjoying full democratic engagement through campaigns, protests and other such political activities. In particular, a focus is placed upon the interpretation of the law by the sector’s independent regulator, the Charity Commission for England and Wales. In so doing the point is made that in practice the rules on political activities often apply disproportionately between organizations and that there is a consistent regulatory struggle to reach a balance between engaging the public (as they operate through organizations) and protecting them.
II. Political activity under English and Welsh charity law
The law and policy on the political activities of charities in England and Wales constitute a study in contrasts. On the one hand, politicians and to some extent the government’s Office of the Third Sector, have championed the lobbying role that charities and wider not-for-profit organizations can undertake and have praised their effectiveness in doing so.10 Research has shown the route to democratic participation that voluntary and community organizations offer,11 and movements are afoot to increase campaigning and advocacy infrastructure and capacity in the sector through a national support service.12 On the other hand, there is a lack of a consistent or comprehensive position at a policy level as to the precise role that the voluntary and community sector can play in civic engagement and renewal. Where a focus has arisen it has tended to center upon encouraging volunteering or grassroots community work rather than “upward” activism through lobbying or other forms of advocacy.13 Moreover, the legal framework in which campaigning takes places has been described as “a minefield of confusion, obstruction and outdated interpretations of the law.”14 These difficulties with framework laws apply to determining the legal status of an organization as a charity, which is the most restricted of the sector organizations in terms of political campaigning and advocacy.
(a) Determining charitable status and activities
A charity under English and Welsh law is one which is constituted for at least one of a list of thirteen possible purposes under the Charities Act 2006 and which delivers public benefit.15 Organizations that satisfy these requirements will be registered with the Charity Commission for England and Wales, the charity regulator, and subject to its scrutiny and reporting requirements.16 Organizations that take charity status must be wholly and exclusively charitable, meaning that any non-charitable activity they undertake must be subsidiary to the main charitable purpose and in furtherance of it.17 Political aims do not fall within the list of possible charitable purposes under the 2006 Act and as a result any political activity that a charity undertakes must be subsidiary to and in furtherance of a primary charitable purpose. Political activities are broadly defined and will cover any activity or purpose which furthers the interests of a political party or cause or which seeks to change the laws, policies, or decisions of UK or other governments (with the one exception that enforcing an existing law is acceptable).18 The factors used to determine whether a political activity is subsidiary have never been precisely defined within the law and are instead judged on a case-by-case basis taking into account the type, duration, and extent of the activity and its link to an organization’s charitable purpose.19 In that sense the rule is easily criticized as vague and arbitrary.
Yet there has developed a general perception (or, rather, a misconception) on the part of the Charity Commission and the sector that the level of resources applied to the activity is the decisive factor. This primary focus upon resources, whilst understandably often a significant feature, is without a firm legal authority and adds to the confusion in the interpretation and application of the law. Moreover, it serves to inculcate a level of inequality between organizations. Those charities with greater financial resources can allocate funds more liberally on political activities and stay within the rules by virtue of a proportionate expenditure of their overall budget. Poorly resourced organizations on the other hand may more readily transgress the rules with a much lower campaign expenditure and will probably be less able to mount a wide-reaching campaign or to employ the necessary skills to increase their campaigning capacity.
The cumulative effect of the breadth of the definition of “political,” the shifting boundary of acceptable subsidiary activities, poor awareness of the rules, and the (mis)focus upon resource allocation often lead to the problem of self-censorship within organizations whereby trustees limit even legitimate political activity. It is worth emphasizing that it is not the case that charities cannot undertake political activities. Some are very organized in Westminster. The Samaritans, for example, recently set up its own all-party parliamentary group, and it is one of three charities that have done this, noting that the purpose was to promote “its brand” to Members of Parliament.20 Other organizations are creating new roles specifically for lobbyists,21 and a number of charities already have access to policy makers through privileged rights of entry to the Houses of Parliament.22 Rather, the point is that the rules are vague and imprecise and limit the nature and extent of activities and tend to have a disproportionate bite on smaller organizations or those that lack financial or skill capacities.23 One consequence of the rules, then, is that only a limited selection of sector organizations, neither representative of the whole nor fully engaging with the public, are able to get their voices heard by policy makers.
The rules restricting charitable purposes and activity were developed almost one hundred years ago and remain controversial, not least because they stand on uncertain legal authority.24 Earlier cases, predominantly in the animal welfare field, had been prepared to demonstrate that the judiciary could be neutral on issues of political controversy and so determine charitable status of organizations whose purposes were intrinsically political.25 These cases were later overruled by the House of Lords in National Anti-Vivisection Society v Inland Revenue Commissioners.26 The justifications of the Law Lords were that the judiciary has no means of determining if a political purpose has public benefit; they cannot usurp the functions of the legislature or the executive in allowing a purpose that seeks to change the law or governmental decisions or policy; and in any event, the law is right as it stands and it would ill-behoove the judiciary to suggest otherwise by awarding privileged legal status to a group campaigning for change. Dissenting judicial views have sought to limit these rules to matters of acute political controversy rather than day-to-day political fare and to attempts to change Acts of Parliament only rather than repealing other forms of legal or policy rules or government decisions.27 These alternative judicial approaches have also focused upon distinguishing the means by which a charitable purpose is achieved from the end itself: thus, if the ultimate aim of an organization is to ensure a charitable end—say, protection of the environment—the fact that the only means of achieving that aim is through a political act such as requiring or repealing an Act of Parliament does not of itself turn the charitable end into a political one. The consensus of judicial opinion, however, has favored a broad and deep approach to interpreting and restricting political acts.
Whilst there has been much academic concern with the law in this field,28 there has been a clear and consistent voice from the government and the judiciary that these rules do not require revision. Indeed, calls for the law to accept greater political activity by charities have long been resisted by governments on the policy basis that the public need protection against “fundamentalism,” as do donors and taxpayers who may not wish their fiscal contributions used to further political ends that they may not hold or have not endorsed.29 This view has also been adopted by some sector commentators, who fear that if the rules were to change, there could be hijacking of a charity’s campaigning ability to further corporate agendas or those of other powerful interests seeking to take advantage of a more liberal ability to lobby for political change and that this would not afford protection for the public.30 Indeed, on broad policy grounds most common-law-based societies accept that charities advantaged by legal and taxation status should not support or be political parties. Nevertheless, most charitable objects rely upon some political means for their execution and it is at this juncture that the policy and legal rules become indeterminate.
(b) An agenda for change
Recently, however, there has been a groundswell of support to revisit the rules on political campaigning by charities in England and Wales. A self-styled “Advisory Group” on campaigning and the voluntary sector, chaired by Baroness Kennedy, reported in May 2007 recommending that trustees of charities be able to engage exclusively in political activities in furtherance of their charitable objects, e.g. to eradicate the subsidiary rule.31 The report noted the contradictions in the law, particularly in terms of the view that the court and the Charity Commission were unable to determine the public benefit of controversial political issues at the same time as requiring them to assess public benefit in other contentious areas, such as in the case of independent schools.32 It criticized the breadth of the construction of the term “political” and called for a clarification of the law and for an opening up of the legal rules to allow all political activities save support of political parties.33
In so doing, the report linked engagement of the public in the democratic sphere with liberalizing the charity rules. The report noted the public disengagement from the broad political sphere in terms of a lower propensity to vote, to trust in politicians, or to take up membership of political parties. The report also posited the view, as noted above, that at the same time as voter turnout has declined, members of the public have become more active in their communities as individuals and as members of voluntary and community organizations. Given this pressure from within organizations and their membership, it is argued, there is a natural progression to allow organizations more political leeway to harness the political will of their membership. To turn the policy rationale on its head: far from needing to protect the public from political activity by charities, the law should encourage the public to participate in democratic processes through such organizations. The Advisory Report thus took a two-handed approach to arguing for a revision of the rules in this field, reinforcing the questionable foundations of the law with the pressing policy need to reengage the public in the political sphere.
To different degrees a number of other reports have also emphasized the connection between participative and representative politics, advocating harnessing individual activism into a broader more formal democratic sphere.34 It is certainly the case that membership of voluntary and community organizations has increased at a time when traditional political engagement has fallen. But there is little evidence to link the two or to suggest that membership of a charity or other voluntary and community organization that campaigns as part of its work equates with a political mandate for that organization from its members. There are, of course, many reasons why members may join an organization and for this reason alone membership doesn’t necessarily indicate either that there is support for all of the charity’s aims or that the members are politically engaged with the organization. As demonstrated in the context of UK voluntary and community organizations, it is usually the case that less than 10% of an organization’s members will be “active participants,” and often membership of organizations occurs because the person joining wishes to have access to “information, advice, support and representation” rather than to support a lobbying issue.35 Nevertheless charities and other voluntary and community sector organizations represent a tangible link between the public and the democratic process, whether through active participation or through awareness-raising. The central argument of the Advisory Report is that this link should be given the legal flexibility to develop more fully.
The Advisory Report, although ostensibly presenting little that was new in terms of analysis of the law, nevertheless tapped into the policy push for civic engagement and found favor in government circles, particularly with the then-Minister for the Third Sector, Ed Miliband. The timing was propitious. The Government’s Third Sector Review, published shortly after the Advisory Group’s report, set out four common goals for government and the sector, viz.: enabling voice and campaigning, strengthening communities, transforming public services, and encouraging social enterprise.36 In terms of voice and campaigning, the Third Sector Review recognized the uncertainty in the current law, which requires political activities of charities to be no more than subsidiary to an acceptable charitable purpose. But whilst the Review underlined the overriding need for an organization to have a purpose charitable in law (i.e., not a political purpose or linked to a political purpose), it nevertheless appeared to accept that political means could play a more prominent role in achieving that charitable purpose since “it is surely possible, in a well-run charity, for political activity to be ‘dominant’ within a charity and yet still enable it to further its charitable purpose.”37
This Review’s acknowledgment of the role that political activities can play as a dominant activity was significant, and the first time a UK Government has put forward a view other than the need for charities to keep political activities in check to protect the public.38 The government certainly did not take that view in the run up to the most recent revision of framework regulation, the Charities Act 2006, where it forcefully rejected the idea that the law should change on this issue.39 Yet one year on, reconsidering the rules was thought significant enough to form a pledge in a Government Green Paper designed to develop a regulatory environment for a “modern Britain.”40 Sensing a wave of opinion in their favor, a coalition of charities, including sector umbrella bodies and those originally involved in the Advisory Group, sought an amendment to charity law through the Constitutional Reform Bill to allow charities to devote all their resources to political campaigning, excluding activities that would be party political.41 Although this was ultimately unsuccessful,42 the Charity Commission was separately instructed to take the matter forward by reconsidering its guidance to charities on political activities and campaigning to see if charities could be afforded greater scope in the political field.43 This provoked impassioned discussion in the House of Commons on the propriety of changing the rules and eroding the public and taxpayers’ protection from essentially political organizations, and eventually led the government’s Third Sector Minister to some backtracking in debate.44 Nevertheless, some members of the sector were hopeful that the Charity Commission’s review of its guidance would prompt actual change, not least because of the groundswell of support and the extensive media reporting. With one proviso, this hope went largely unrealized.
(c) Charity Commission review
As regulator, the Charity Commission provides guidance to trustees on a number of matters relating to the running and administration of charities. The Charity Commission first published guidance on political activities by charities in 1995 following an investigation the previous year into the activities of the charity War on Want, and this has been updated frequently since. The purpose of the guidance is to provide trustees with assistance, advice, and support in determining the regulatory boundaries between acceptable and unacceptable political conduct. The guidance does no more than interpret the law and explain the consequences for charities and their trustees of infringement.
With the law both ill-defined and far-reaching, providing guidance in this field is not to be underestimated.45 In the past the Charity Commission has been criticized both for the guidance’s often admonitory tone,46 and its overemphasis upon risk-management.47 As regulator, the Charity Commission has sought to explain the consequences to charity trustees of overstepping regulatory boundaries but in doing so has tended to draw those boundaries quite tightly, particularly in the law’s gray areas. Indeed, on occasion, the guidelines have blurred good practice into legal principle and this has led to the further criticism that the Commission’s guidelines fail sufficiently to encourage political conduct as a legitimate activity by charities and their trustees. In 2007, following a survey published by the Sheila McKechnie Foundation which had found that respondents were of the view that the guidance from the Charity Commission was confusing,48 the Charity Commission published supplementary advice.49 This additional advice was welcomed by some within the sector as being more open and encouraging of campaigning than previous guidance, but uncertainty remained particularly with regard to the distinction between general campaigning (which is acceptable) and political campaigning (which is not).50 Nevertheless, other research has found that the problem goes much deeper in the sense that some charities were generally unaware of the existence of the Charity Commission’s guidelines or of the types of activity which will infringe the rules. Indeed, recent examples of infringement show a pervasive lack of understanding.51 Given this fact, along with the already entrenched degree of self-censorship by charity trustees52 and the penalties that can be imposed for infringing the rules,53 it would appear that many charities are still misdirected when it comes to considering what political conduct they can legitimately undertake.
Following the Third Sector Review, the revised Charity Commission guidelines were considered by the Charity Commission at an open board meeting on 31 January 2008 and formally published in March.54 An explanatory paper by Caroline Cooke, head of Regulatory Policy at the Commission, noted that the new guidelines were informed by changes in the environment in which charities operate, the lack of knowledge on the part of trustees of the guidelines, the phenomenon of trustee self-censorship, and a concern over maintaining public trust.55 It should be noted at the outset that the guidelines are attendant upon the current and existing law since the Charity Commission fills no more than an interpretive role in this field. Given that the actual law has not changed and the Commission has no authority to alter the underlying legal principles, these revised guidelines do no more than attempt to clarify the existing guideline’s explanatory language.56 Were the Charity Commission to do otherwise, it would have been acting outside its statutory powers and have put itself in a position of conflict as a body independent of Government influence.57 Only primary legislation, revision by the Law Lords, or a determination by the new Charity Tribunal can formally change the existing legal rules. For this reason alone, the hope that the Charity Commission would provide sustained change was forlorn.
The Charity Commission’s revised guidelines were drawn up with a focus group of sector representatives and their purpose is expressly to clarify confusion that has arisen over the use of terms “dominant” and “ancillary” activities used in previous guidelines to explain the subsidiary rule. The new guidelines avoid these terms and overall are more encouraging to trustees, emphasizing that political conduct can be a legitimate and beneficial course of action for a charity.58 Where confusion remains, however, is in the phraseology that the Charity Commission has chosen to clarify the terms “dominant” and “ancillary.” The new guidance takes a step back and makes a distinction between general campaigning activities, which can be pursued where they further charitable purposes, and political activities, which can only be pursued if they support charitable purposes.59
Although examples are provided of what could count as a general campaigning and a political activity in this role (viz., the former includes issue awareness raising and calling for existing laws to be enforced, and the latter influencing political parties, responding to government consultations, and seeking public support for a change in the law), a definition of “furtherance” and “support” is absent and leaves the Charity Commission’s guidelines with the same linguistic difficulty as before, if not a more serious one.60 The difference between dominant and ancillary political activity is conceptually clear even if the precise boundary and the unit of analysis are not. The difference between “to further” a charitable purpose by campaigning and “to support” it by political campaigning is not conceptually clear and is hard to explain, and the boundary between the two is difficult to determine. One has to feel some sympathy for the Charity Commission, since they are only interpreting the law, an imprecise and confusing law at that, but these new guidelines may well create new confusion whilst not entirely ameliorating the original one. This is a significant point given, first, that the instruction to reconsider the guidance was to open up the field and, second, that research has shown that the greater “clear, coherent and consistent” structures and frameworks for community engagement, the greater the effectiveness in practice.61 The same is true of the legal framework for political activity: clarity in communication encourages effectiveness in political participation, a point that may have been lost in the new Charity Commission guidelines.
That said, four points worthy of note come out of the revised guidelines. The first is the unprecedented emergence of an explicit statement that a charity can use most or all of its resources on a political campaign provided that the political campaign is not the only activity that the charity carries out and that it does not become the sole reason for the organization’s existence.62 This approach has been criticized for creating a situation whereby organizations could finesse the rules by nominally undertaking a second activity to justify the primary political activity. If this were the case the organization would become essentially political in nature but be able to retain its charitable status through de minimis alternate activities.63
This criticism, however, reflects a lack of understanding of both the current law and of the inability of the Charity Commission to change the rules. It has never been the case that charities could not devote most or all of their resources to a political campaign. The subsidiary criteria have always enabled charities to do this, albeit for a short period of time and provided, crucially, that the political activity is a legitimate means to achieve the charitable outcome.64 As noted above, in determining whether an activity is subsidiary, the courts examine a number of factors, putting the political campaign in the context of the overall work and resources of the charity. The recognition that this is the case puts the Charity Commission’s guidance more in the line with the actual law and is to be welcomed as providing more accurate and encouraging advice to trustees in terms of planning and carrying out political activities.
However, whether this change in the guidelines will be successful in terms of encouraging charity trustees to enter the political arena remains to be seen, particularly in the case of trustees of smaller or less experienced organizations. As noted above, one problem under the current law has not been the law itself, but the lack of awareness amongst charity trustees across the whole sector (i.e., beyond the larger, more organized and politically active organizations) of their rights to undertake political activities. This pervasive lack of understanding extends beyond the regulation to knowledge of the existence of the Charity Commission’s guidelines and to the relevance of the guidance to the work of a trustee’s charity. The Charity Commission’s encouragement of trustees to undertake political activity as a beneficial action in its newly reissued guidelines will amount to little if the much broader process of educating trustees on the nature and extent of their role and their ability to seek to influence the policy process is not undertaken too.
Second, these new guidelines raise the possibility of “regulation creep” with regard to the understanding of a “political” act. Mr. Justice Slade in McGovern v Attorney General made it clear that the term “political” encompassed activities that furthered the interests of a political party or cause or that sought to change the laws, policies, or decisions of UK or other governments.65 In terms of government policy and decisions, this has been broadly interpreted to include not just government departments but also agents of the government that can make policy or governmental decisions. Given the current plurality of government and the extension of public bodies, particularly through the outsourcing of government activities (such as service delivery), this is entirely appropriate within the ambit of a “political” activity. To that end the Charity Commission’s guidance makes clear that government should be construed widely, suggesting as agencies of government the “UN, EU and its bodies, World Bank, NHS trusts, regional assemblies, non-departmental public bodies and agencies except registered charities.”66
But a crucial nuance here is not transparent in this guidance or in its earlier incarnations.67 A body that makes a decision in its capacity as an agent of government and that relates to a matter properly deemed government policy or a government decision will fall within the rules and any attempt by a charity to seek a change in those policies or decisions will be properly regarded as a political act. But the same body that makes day-to-day decisions not pertaining to government policy or government decisions or undertakes other policy matters outside their agency role should not fall within the rules. So any attempt by a charity to seek a change in these latter policies or decisions will not properly constitute a political act under the McGovern definition.
Yet the Charity Commission’s guidance focuses upon the actor being lobbied rather than the real trigger for political engagement, the action that the actor undertakes. Focusing simply on the actor widens the net of the regulation and brings into its scope many activities by bodies that charities may wish to challenge or seek to change but which, following Charity Commission guidance, they could be reluctant to do so, categorizing the activity as political. Of course, it is often difficult in practice and without sufficient information to draw a line between the two, but trustees need to be aware of the distinction that the law makes. It also follows that despite the guidelines’ exclusion of them, registered charities or indeed any organizations that undertake service delivery could qualify as public bodies making government decisions or policy, depending on their scope to act.68 If that is the case, they would also fall within the rules. The application of the regulation thus widens in two directions: one through a lack of detail in the Charity Commission guidelines to all activities of government agents, and the second at a policy level through the increasingly modern trend of using charities and other sector bodies to fulfill state functions.
The third point to arise from the new guidelines is recognition that some purposes defined as charitable in section 2 of the Charities Act 2006 could be interpreted as more explicitly political than others. Four in particular stand out: the promotion of human rights, the advancement of animal welfare, the prevention of poverty, and the advancement of citizenship and community development. It has always been the case that some heads of charity are more intrinsically linked to a political agenda than others. Organizations working in the field of human rights, for example, have had to tread a careful line, particularly in terms of questioning overseas government policy. Intriguingly, the Charity Commission appears to suggest that there may be some room to maneuver in these fields by providing more “tailored guidance,” yet presumably still remaining within the boundaries of campaigning work supporting a charitable purpose.69 The proposal suggested is that the Commission look at individual heads of charity, starting with human rights charities, and consider where there might be greater scope for political activity.
Certainly there has been the argument that the rephrasing of some purposes in the Charities Act 2006 must inherently admit of a political program, e.g., specifically “prevention” (rather than relief) of poverty and “promoting” human rights, which involve, respectively, looking at the root causes of poverty and upholding international law for human rights.70 While welcome for those specific categories of charity, this approach will be questionable if it does not provide parity for all organizations, whatever category of charity they fall within. If the enduring legal and policy rationales have been that the court cannot assess public benefit for a political purpose and that the public, donors, and taxpayers require protection, then to decide otherwise for some heads of charity and not others would be more than a little perverse, particularly given the irony that it was organizations operating in these very fields which first prompted the judicial rule against political purposes and activities a century ago. If there is a rationale to allow some charities more freedom to politically campaign, then there is no policy argument to restrict others across the board.71
A final point is that there is a proviso to the earlier suggestion that the Charity Commission guidelines do not change the law, and that proviso rests on the distinction between the law’s tenets and its application. Despite the fact that the Charity Commission has essentially done no more than undertake an exercise in re-explaining the current law, the regulator’s own approach to applying its guidelines may prompt a change in practice. It remains to be seen whether, following the new emphasis in the guidelines on devoting time and resources to political activities as a beneficial activity, greater leniency is afforded by the Commission as regulator in enforcing the rules and whether there is over time a change in its practice of registering as new charities organizations that are ostensibly political in nature, such as campaigning groups. If the latter occurs, a challenge to that practice brought before the Charity Tribunal or subsequently a higher court would allow for more formal judicial reconsideration of the cogency of the current rules and for the opportunity to either reject the Charity Commission’s approach or accept that the social and policy environment has changed since the political activity rules were first established in 1917. Thus, although initially the Charity Commission’s guidelines do not seem ground-breaking per se, they may well prove to be a significant turning point in the long term.
It is evident from the recent debates and reinterpretations of framework laws restricting the political activities of charities in England and Wales that the regulatory environment has not moved as far as the social or policy context. Whilst charities can undertake political activities, they may do so only in limited circumstances underpinned, first, by a body of case law that has doubtful provenance and, second, by a far-reaching understanding of what encompasses a political act. The failed attempts to refresh the law in this field emphasize the difficulties that charities have in responding to a policy push for democratic renewal through engaging with the public at a participative political level in terms of grassroots civic engagement and upwards advocacy. Whilst the evolution of legal rules is traditionally slow, the mismatch between the regulation and the policy context can create tension where organizations are encouraged to take part in civic engagement but are not given all the legal tools to do so.
Where regulatory barriers are set too high, they can counteract a push for policy development. There is a need to continually reevaluate whether the purpose of the regulation is still feasible and expedient. In recent years, the trend of charity regulation in England and Wales has been to ensure transparency, good governance, operational efficiency and protection both of those that interact with charities, such as users, beneficiaries, donors, and volunteers, and of members of the wider public, who place trust in the charity “brand.”72 One policy behind this trend is a concern with proper financial management of public resources, heightened recently by allegations of the abuse of charities as channels for terrorist financing.73 Although it is clearly necessary to ensure that there is appropriate fiscal governance of charities and that criminal behavior is not allowed to flourish, it is also important to ensure that regulation is appropriate for the circumstances. The legal and policy purpose of the regulation of political activities of charities has rarely been judicially reasoned or rationalized in a modern context. The confusion evident in practice over the scope and interpretation of the legal rules shows why regulators urgently need to reappraise the appropriateness of these restrictions in the current policy climate and ensure that the rules remain proportionate to their aims.
It is also clear outside the regulatory framework that there is a pressing need for greater education of charity trustees. Quite often medium and smaller charities do not take advantage of the legal process, not because they are uninterested in doing so, but either because they lack the appropriate skills or knowledge base or because they have little awareness of the full range of permissible political activities open to them. Urgent investment needs to be made by policymakers and the Charity Commission as regulator in providing education and capacity building outside the guidelines to trustees and their organizations in this field.
The renewed interest in the political activities of voluntary and community sector organizations highlighted above in the recent interpretive developments of charity framework laws comes at a time when transparency in lobbying is in the public eye.74 Sector evidence given to the Parliamentary Public Administration Select Committee on lobbying has emphasized that there should be informed public debate on political issues but that corporate and private interests should not have more influence or greater access than other groups to the policy or decision-making processes.75
The need for the public to be engaged but also protected from lobbying agendas being hijacked by private or extreme political interests underlies much of the regulation in this field, and striking a balance between the two is not always easy. It is not just between the voluntary and community sector and other organizations that there is a difficulty. Striking a balance between organizations within the voluntary and community sector can be difficult when interpretation of the law tends to favor larger, more organized, and well-resourced organizations that are not always representative of the whole sector or of the issues with which the sector is concerned. Indeed, the rules restricting charitable political activity provide us with a recognition that whilst it is not the purpose of the regulatory framework to ensure that all organizations are equal in terms of their ability to contribute to the democratic sphere (which should be left to general market forces), it is the law’s responsibility to provide a framework whereby all organizations are equal in terms of their opportunity to act.
As such, the law should create a level regulatory playing field between organizations within the sector and between sector organizations and other organizations, such as for-profits. Failure to do so creates particular tension where the sector is drawn into public engagement through the government’s civic renewal and community cohesion programs but not given a broader and equal platform to campaign. In the civic engagement agenda, there must be support for the entire voluntary and community sector, most obviously through the regulatory framework to enable charities and other organizations to deal with the communities on the ground, but also to combat policy difficulties through upwards advocacy. Research has shown that there are barriers “to getting heard” within communities, for example through lack of opportunity, poor communication, or of internal community divisions,76 but nevertheless cohesion and political engagement through the regulatory framework remains a necessary component. Ensuring that all are provided with a voice also means translating that upwards to policy-making. Access to formal political structures is important in terms of “opening pathways to decision-making processes”77 and that is why the voluntary and community sector, and charities in particular, require a sustained and sustainable opportunity to engage with the public at a political level and to help promote participative democracy.
* Newcastle Law School. An earlier version of this paper was presented at the International Society for Third Sector Research’s 8 th International Conference, University of Barcelona , 9-12 July 2008. I am grateful to the participants and fellow panelists for their comments.
1 The voting turnout for the 2001 general election was 59.38%, the lowest since 1918, rising just 2% in 2005: see www.ukpolitical.info/Turnout45.htm and UK Election Statistics 1918-2004, House of Commons Research Paper 04/61, p. 17; General Election 2005, House of Commons Research Paper 05/33, p1.
2 See L Baston & K Ritchie, Turning Out or Turning Off? An analysis of political disengagement and what can be done about it ( London, Electoral Reform Society, 2004). Given that turnout rates provide little if any information on why members of the electorate are choosing not to vote and whether they are politically engaged in other ways, the situation is rather more complex than a purely process argument would suggest.
3 The British Election Study Survey’s research ( www.essex.ac.uk/BES/data.html ) has found that those who identified very strongly with the Conservative party has dropped from 48% in 1964 to 14% in 2001. A similar picture is presented for the Labour Party, which has fallen from 41% to 16%. For the Liberal Party, just 7% very strongly identified with the party in 2001, compared with 32% in 1964. See also P Mair & I van Biezen, “Party membership in twenty European democracies, 1980-2000” (2001) 7(1) Party Politics 5-21.
4 See Power to the People: The Report of Power: An Independent Inquiry into Britain’s Democracy (York, The Power Inquiry, 2006), part 1; C Jeffrey, “ Turnout: a crisis in UK politics?” in I Stewart & R Vaitilingam (eds), Seven Deadly Sins ( London, ESRC, 2005). Electoral Commission, An Audit of Political Engagement 3, Research Report (London: Electoral Commission and the Hansard Society, 2006) found that a majority of the public felt they had a lack of knowledge about politics and that only a minority were politically activity (14%), para 3.1. Eurobarometer 68, Autumn 2007 found that just 30% of citizens in the UK trust their government, and just 1 in 4 trust EU institutions.
5 See C Crouch, Coping with Post Democracy (London, Fabian Society, 2000), “Turnout ‘at 80-year low’,” BBC News Online, 8 June 2001, https://news.bbc.co.uk/vote2001/hi/english/newsid_1376000/1376575.stm
6 Baston & Ritchie, n2 above, p8; M Barnes, J Newman & H Sullivan, Power, Participation and Political Renewal (Bristol, Policy Press, 2007); V Lowndes, L Pratchett & G Stoker, Making Participation Count in Local Politics (London, IPPR, 2006).
7 See Electoral Commission, Audit of Political Engagement ( London: Electoral Commission and the Hansard Society, 2004) and Electoral Commission, Rules of Engagement ( London: Electoral Commission and the Hansard Society, 2004), and for Labour policy: E Miliband, Changing Lives, Changing Society, Hinton Lecture 2006 at www.ncvo-vol.org.uk/press/speeches/?id=3621
8 For discussion see A Blackmore, H Bush & M Bhutta, The Reform of Public Services: the role of the voluntary sector ( London: NCVO, 2005). A recent Third Sector Review set out a framework for partnership: The future role of the third sector in social and economic regeneration: final report Cm 7189 ( London: HM Treasury and the Cabinet Office, 2007).
9 See Next Steps on Volunteering and Giving in the UK: A Discussion Document ( London: HM Treasury and Home Office, 2002); The future role of the third sector in social and economic regeneration, ibid, at 3.9. For discussion of the tension between the two aims see A Dunn, “Demanding Service or Servicing Demand? Charities, Regulation and the Policy Process” (2008) 71(2) Modern Law Review 247-270.
10 The Office of the Third Sector is a government department set up in 2006 with the aim of supporting the nonprofit sector. Research with Members of Parliament suggests that two thirds were more persuaded by lobbying by charities (62%) than by business groups (31%), and 91% were of the view that charity lobbyists were effective at communication: P Parvin, Friend or Foe? Lobbying in British Democracy: A discussion paper ( London, Hansard Society, 2007), chapter 2, pp23-26. These figures are to be viewed with a measure of cynicism since there is no independent information or criteria to validate the responses.
11 W Paxton & N Pearce, “The Voluntary Sector and the State” in W Paxton, N Pearce, J Unwin & P Molyneux, The Voluntary Sector delivering Public Services: Transfer or Transformation (York, Joseph Rowntree Foundation, 2005), pp16-17; J Howard & D Sweeting, “Neighbourhoods, democracy and citizenship,” in I Smith, E Lepine & M Taylor (eds) Disadvantaged By Where You Live? ( Bristol, Policy Press, 2007), p119.
13 See Next Steps on Volunteering and Giving in the UK: A Discussion Document (London: HM Treasury and Home Office, 2002); Home Office, Improving Opportunity, Strengthening Society: The Government’s strategy to increase race equality and community cohesion (January 2005); Department for Communities and Local Government, Preventing Violent Extremism – Winning Hearts and Minds (April 2007); Commission on Integration and Cohesion, Our shared future (June 2007), Commission on Integration and Cohesion, Themes, Messages and Challenges (June 2007).
14 Report of the Advisory Group on Campaigning and the Voluntary Sector ( London: Advisory Group, 2007) at www.bateswells.co.uk/Files/News/CampaigningReport.doc p2.
15 UK charity law is administered according to three separate jurisdictions: England and Wales, Scotland and Northern Ireland. This paper covers England and Wales only, although parallels can be drawn with the other jurisdictions. The thirteen charitable purposes listed in section 2 Charities Act 2006 are: “the prevention or relief of poverty; the advancement of education; the advancement of religion; the advancement of health or the saving of lives; the advancement of citizenship or community development; the advancement of the arts, culture, heritage or science; the advancement of amateur sport; the advancement of human rights, conflict resolution or reconciliation or the promotion of religious or racial harmony or equality and diversity; the advancement of environmental protection or improvement; the relief of those in need by reason of youth, age, ill-health, disability, financial hardship or other disadvantage; the advancement of animal welfare; the promotion of the efficiency of the armed forces of the Crown, or of the efficiency of the police, fire and rescue services or ambulance services; any other purposes within subsection (4).”
16 Section 1A Charities Act 1993, inserted by section 6(1) Charities Act 2006. Under section 1B Charities Act 1993 (as amended) the Charity Commission’s statutory objectives are to increase public confidence in charities, promote understanding of public benefit, promote trustee compliance with legal obligations and effective use of charitable resources, and enhance charity accountability.
17 See Royal College of Surgeons of England v National Provincial Bank, Ltd  AC 631 Inland Revenue Commissioners v City of Glasgow Police Athletic Association AC 380 at 402 per Lord Reid.
18 This definition comes from McGovern v Attorney-General  Ch 321 at 334ff, per Slade J.
19 It’s “a question of degree of a sort well known to the courts,” per Lord Normand National Anti-Vivisection Society v Inland Revenue Commissioners  AC 31 at 77.
20 N Thomas, “Samaritans sets up own parliamentary grouping,” Third Sector, 7 February 2007, p7.
21 N Thomas, “New role at Cancer Research for political lobbying,” Third Sector, 14 March 2007, p3.
22 Register of Interests of Lords Members’ Secretaries and Research Assistants, Session 2007-08, https://www.publications.parliament.uk/pa/ld/ldsecret/080707/memi01.htmHelen Warrell, “Lords access: ‘it’s who you know’,” Third Sector, 9 July 2008, p4.
23 Some have argued that the concern with the effect of the rules on smaller organizations is overplayed because, according to the chief executive of Bassac, Ben Hughes, small groups “do not embark on structured mainstream campaigning,” citing instead the problem of skills and knowhow, cited in I Das-Gupta, “Political rules ‘do not harm small groups’,” Third Sector, 21 November 2007, p5.
24 The House of Lords decision in Bowman v Secular Society  AC 406 is taken as the modern starting point of the rule where Lord Parker, obiter, drew upon De Themmines v De Bonneval (1828) 5 Russ 288, 38 ER 1035. A general rule was laid down by the House of Lords in National Anti-Vivisection Society v IRC  AC 31.
25 In much the same way as the court stands neutral on issues of religion: In Re Foveaux  2 Ch 501 at 503 per Chitty J.
26  AC 31, Lord Porter dissenting.
27 Lord Parker’s in Bowman v Secular Society  AC 406 had focused only on these matters. Dissenting views, such as those of Lord Porter and Greene MR in National Anti-Vivisection Society v Inland Revenue Commissioners  AC 31 have tried to narrowly interpret Lord Parker’s dicta but subsequent cases have extended the rule to any political activity broadly defined.
28 See for example, E Burt, “Charities and Political Activity: Time to Rethink the Rules” (1998) 69 Political Quarterly 23; M Chesterman, Charities, Trusts and Social Welfare (London: Weidenfeld and Nicholson, 1979); C Rickett, “Charity and Politics” (1982) 10 NZULR 169.
29 See, for example, White Paper, Charities: A Framework for the Future Cm 684 (London, HMSO, 1989), chapter 2; Private Action, Public Benefit ( London: Strategy Unit, 2002); Charities and Not-for-Profits: A Modern Legal Framework ( London: Home Office, 2003).
30 See N Seddon, Who Cares? How state funding and political activism change charity ( London, Civitas, 2007).
31 The Report of the Advisory Group, n 14 above at p5. It is probably no coincidence that Baroness Kennedy also chaired the earlier Report of Power, n4 above.
32 Specifically the contradiction in National Anti-Vivisection Society v Inland Revenue Commissioners  AC 31, where the House of Lords held that the public benefit to society in terms of the morality derived from preventing vivisection (the aim of the organization) was of lesser importance than the public benefit to the public in health terms derived from the science of animal testing. At the same time the House of Lords declared that the court could not determine the public benefit of a political purpose. Another contradiction, though not one noted in the report, is that a charity cannot have a purpose that attempts to change the law or governmental policy overseas, one rationale being that to do so could affect political and economic relations between this country and the country in which the charity undertakes its activities; yet nevertheless a charity could undertake a political campaign to achieve the same where it is ancillary to primary charitable purpose, even though that might affect political and economic relations in the same way.
33 The Report of the Advisory Group, n14 above, p16.
34 See, for example, The Report of Power, n4 above, G Blake et al, Community engagement and community cohesion (York, Joseph Rowntree Foundation, 2008).
35 G Jordan & W A Maloney, Democracy and Interest Groups: Enhancing Participation? ( Basingstoke, Palgrave Macmillan, 2007), pp164, 130-131.
36The future role of the third sector in social and economic regeneration: final report Cm 7189 ( London: HM Treasury and the Cabinet Office, 2007).
37 Ibid, paras 2.30 -2.31. Creating the right enabling environment for advocacy and campaigning focused upon ensuring better consultations, building skills and capacity, and ensuring rights under the Compact, see para 2.27.
38 See, for example, White Paper, Charities: A Framework for the Future Cm 684 (London, HMSO, 1989), chapter 2; Private Action, Public Benefit ( London: Strategy Unit, 2002); Charities and Not-for-Profits: A Modern Legal Framework ( London: Home Office, 2003).
39 See Charities and Not-for-Profits: A Modern Legal Framework ibid.
40 Green Paper, The Governance of Britain Cm 7170 (2007), 168.
41 I Das-Gupta, “Coalition seeks legislation to permit political campaigning,” Third Sector, 10 October 2007, p1.
42 The Advisory group is now seeking evidence for charities as case studies to show difficulties of the current law and guidance, see I Das-Gupta, “Advisory group to switch tack on campaigning law,” Third Sector, 7 November 2007, p2.
43 n36 above, para 2.32, referring to the Report of the Advisory Group, n14 above.
44 In a House of Commons debate on the government’s Third Sector Review, which took place in mid-October 2007, when Ed Miliband was pushed by Greg Clark, shadow charities minister, whether the government was in favour of charities using 100 per cent of their resources to campaign, he said that that was not his view (HC Deb vol 464 col 980-1056 18 October 2007). Phil Hope, current Minister for the Third Sector, in a letter to Third Sector, 7 November 2007, denied the government had backtracked.
45 A point accepted by the Charity Commission and by the Government: Charity Commission Leaflet CC9 (London: Charity Commission, 1995), para 8; White Paper, n38 above, para 2.38. See also Private Action, Public Benefit, n38 above, para 4.50 where the existing rules were described as “notoriously unclear.”
46 Private Action, Public Benefit n38 above, para 4.56.
47 The emphasis on risk-management was particularly evident in the Charity Commission’s 2004 guidelines, written after an earlier version of the guidelines was thought to be too cautionary in tone.
49 Charity Commission, Campaigning and political activities by charities – some questions and answers ( London, Charity Commission, 2007).
50 See I Das-Gupta, “One step forward for campaigning,” Third Sector, 25 April 2007, p10; N Thomas, “Call to rewrite campaign rules,” Third Sector, 11 April 2007, p3.
51 For example, on 3 January 2008 sixty-three organizations forming the British Muslim Initiative, of which sixteen were charities, posted a letter on the Guardian newspaper’s website backing Ken Livingstone’s bid for reelection as mayor of London, which contravenes the requirement not to support a political party or candidate. In addition, the Smith Institute think tank was found to have poor governance structures which did not ensure party political neutrality: Charity Commission, The Smith Institute inquiry report, 18 July 2008. nfpSynergy research, n48 above, found that up to half of charities surveyed were unaware or not sure about the Charity Commission guidelines. See also A Dunn, “Hippocratic Oath or Gordian Knot? The Politicisation of Health Care Trustees and their Role in Campaigning” (2007) 18 King’s Law Journal 481-502.
52 See nfpSynergy, n48 above.
53 The Charity Commission has the ability to freeze bank accounts and seek injunctions to prevent activity. Excessive political activity may also prompt the Charity Commission to consider where the purpose of the organization is properly charitable.
54 Charity Commission, Speaking Out: Guidance on Campaigning and Political Activities by Charities (March 2008).
55 Campaigning and political activities by charities, Board Paper Number (08) OBM 3.
56 Noted within the guidelines, see Charity Commission, n54 above, para B2.
57 Under section 1A(4) inserted into the Charities Act 1993 by section 6(1) of the Charities Act 2006: “In the exercise of its functions the Commission shall not be subject to the direction or control of any Minister of the Crown or other government department.” See also comments of Francesca Quint in J Plummer, “Is this a new dawn for political campaigning?,” Third Sector, 22 August 2007, p16-17.
58 Charity Commission, n54 above, para B2, C2, E1, G1, Appendix 1.
59 Ibid., n54 above, paras A1, C1
60 “Contributing to the achievement of the purpose” is sometimes used in the guidance as an alternative to “support,” see ibid, paras C1 and C5.
61 Blake et al, n34 above, p36 drawing on the experience of community cohesion and community engagement strategies in three case studies.
62 Charity Commission, n54 above, paras C1, C5-6.
63 “It creates a whopping great loophole: any charity could make political campaigning its dominant activity so long as it took a single other activity, however small,” N Seddon, “Beware the rise of the political charity,” Third Sector, 6 February 2008, p15.
64 See Charity Commission, n54 above, paras C1 and C3.
65 n18 above.
66 Charity Commission, n54 above, para B5.
67 A Dunn, n51 above, pp492-493.
68 Charities providing care home services were rejected as public bodies for the purposes of human rights legislation by the Court of Appeal in R (Heather) v Leonard Cheshire Foundation  2 All ER 936 on the basis that the contract between the charity and the local authority determined the nature of their relationship as private. But the House of Lords in YL v Birmingham City Council  3 WLR 112 linked the for-profit status of an organization providing service delivery as a determining factor in whether it was a private body, leaving scope for future interpretation of nonprofit organizations to be classed as public bodies.
69 Charity Commission, n55 above, paras 10-11
70 Letter of Rosamund McCarthy, Third Sector, 12 September 2007, p13.
71 There is the hint that it may ultimately lead to changes across all heads: Charity Commission, n55 above, para 11.
72 See Private Action, Public Benefit, n38 above, Charities and Not-for-Profits: A Modern Legal Framework, n38 above.
73 See Home Office and HM Treasury, Review of Safeguards to Protect the Charitable Sector (England and Wales) from Terrorist Abuse: A Consultation Document (Home Office, May 2007) followed by Home Office and HM Treasury, Review of Safeguards to Protect the Charitable Sector from Terrorist Abuse: Summary of Responses and Next Steps (December 2007).
74 The Parliamentary Public Administration Select Committee chaired by Tony Wright MP launched an ongoing inquiry into the lobbying industry on 21 June 2007, considering in particular if there should be external regulation of lobbyists to encourage transparency over the activities lobbyists undertake and for whom and for what agenda they undertake them.
75 Minutes of evidence taken by the committee, 15 May 2008, https://www.publications.parliament.uk/pa/cm200708/cmselect/cmpubadm/c137-vii/c13702.htm
76 Blake et al, n34 above, pp31-32.
77 Ibid., p49.