Retaining Charitable Status

Retaining your group’s charitable status requires your Charity Trustees to ensure that:

  • they comply with their statutory Charity Trustee duties

  • the charity’s purposes remain charitable - in accordance with the charitable purposes defined in the Charities and Trustee Investment Scotland Act 2005

  • the charity’s services and activities continue to provide public benefit.

  • the charity’s documents, promotional leaflets, website etc all comply with the legal requirements for referring to the name, charity number and status of the charity

  • statutory reporting requirements are adhered to

  • they seek prior permission (consent) from the Office of the Scottish Charity Regulator (OSCR) for certain changes (42 days before those changes can take place)

  • they notify OSCR immediately of any changes to the contact details of the principal contact

  • they notify OSCR of any other changes (not requiring consent) within 3 months of the change taking place

OSCR monitors all the registered charities in Scotland ensuring that they comply with the legislation set out in the Charities and Trustee Investment (Scotland) Act 2005. OSCR’s powers to intervene or conduct investigations in response to public complaints (concerning alleged misconduct or mismanagement of a charity) are also set out in the charity legislation.

In cases of serious misconduct or mismanagement of a charity’s assets, OSCR has the power to apply to the Court of Session, transfer assets and ultimately remove a charity from the Scottish Charity Register. Where a charity and its trustees breach their duties under the Charities and Trustee Investment (Scotland) 2005 Act they can face fines and/or imprisonment with possible personal liability for costs.

Rolling Review of Scottish Charities

Since April 2006 all groups seeking charitable status for the first time have been assessed using the Charity Test. However there are still many charities on the Scottish Charity Register who were granted charitable status prior to the Charities and Trustee Investment (Scotland) Act 2005 and the establishment of the regulatory body OSCR.

Over time, these charities will be assessed as part of a rolling review to check that they meet, and continue to meet, the Charity Test. The rolling review is not a review of the governance, financial viability or effectiveness of charities. It looks specifically at the charity’s purposes in relation to the purposes defined as charitable in the current charity legislation, alongside their activities and services to see if these are providing public benefit.

OSCR’s rolling review process has already produced three key lessons for all charities to consider prior to assessment:-

  • to make sure that your constitution is up to date, meets the requirements of the Charities and Trustee Investment (Scotland ) Act 2005 and accurately reflects what your charity seeks to achieve

  • to ensure that the Charity Trustees' Annual Report (which forms one of several component parts of the charity's annual accounts) describes what the charity does and illustrates how it provides public benefit

  • where the charity is part of a membership or group structure, to consider implementing or updating a model constitution

Visit the OSCR website for more about the Rolling Review as the way in which it has been operated is changing with more of an ongoing emphasis on annual reporting.