A committee report has concluded that the Charities Registration and Regulation Act 2019 has placed “additional administrative burdens” on charities.
It has left some small organisations struggling to cope and others winding up as a result.
The Legislative Council committee examined the impact of the 2019 Act which fully came into force in April 2020.
It found that while the Act has modernised the definition of ‘charity’ and combined regulatory functions within the Attorney General’s Chambers, it has also created significant challenges for the island’s volunteer-run charities.
Complicated
In written evidence, Peter Hayhurst, treasurer of two cultural charities, said the process was “complicated, over legalistic, frustrating and demoralising,” adding that “weeks of time” had been taken away from charitable work.
The Committee heard that the Attorney General’s Chambers lacks data on how many charities are ‘small’, but noted that “some charities have decided to wind up their activities”.
The Interfaith Group Isle of Man stated in its submission that “the benefits of charitable status had become outweighed by the burdens”.
The report makes several key recommendations, including that the Attorney General should consider exempting small charities with low income and assets from registration, while allowing them the option to register if desired.
Attorney General Walter Wannenburgh acknowledged in his evidence that the legislation had “been a shock to some of the well-established kitchen-table charities”.
The Committee also called for greater acceptance of electronic filings and discretionary powers to exempt charities receiving large one-off donations from full audit requirements.
You can read the full report here.