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1. What is a linked charity, and what is its purpose? |
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A linked charity is a distinct charity which is related to a reporting charity for the purposes of registration and/or accounting, either: |
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- as the result of a uniting direction under s.96(5) or s.96(6) of the 1993 Act (see section 2 below) either contained within a scheme or made separately; or
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- because it is a special trust of the reporting charity.
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- Our general policy is to minimise the administrative burden on charity trustees in relation to accounting and reporting - provided proper accountability is retained. We therefore normally encourage the linking of charities where there is an element of legal choice, and linking is compatible with the accounts of the linked charities giving a true and fair view.
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- There is no legal choice if charity A is a "special trust" of charity B. Charity B has to be the reporting charity and charity A has to be a linked charity. The definition of "special trust" is in section 97 of the 1993 Act. If it is clear that the special trust does not need to be registered and that it will be accounted for correctly by the related reporting charity then no action is needed at registration. However, if the special trust is registerable (or in some cases because the charity wishes to register it for clarity and consistency) then a uniting direction will have to be made if it is - in accordance with our normal policy - to be registered under the same number as that of its related reporting charity.
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- Where there is no special trust relationship, a uniting direction may or may not be made under section 96(5) or (6), linking two or more charities for accounting purposes. A uniting direction may in some cases be made to resolve any doubt whether one charity is or is not a special trust of another. Again if two or more charities are linked in this way for accounting purposes, then they should normally also be linked for the purposes of registration.
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- Note: Caseworkers should be aware that there is a difficulty with the Charity Database in the infrequent case of a Uniting Direction being made under s.96(5) for registration purposes, where the linked charities do not share a common trustee body. Because the database allocates all trustees to the reporting charity, it is not possible to tell which of the linked charities each trustee represents, so a note should be included in the trustees' name and address details.
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2. Linking via uniting direction |
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Sometimes Schemes appoint trustees and provide for two or more charities to be administered together by the same body of trustees but do not legally amalgamate them into one charity. |
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An example might be where a number of small charities with largely similar purposes for the benefit of a particular parish are gathered together under one name, although they are not similar enough to be legally amalgamated. |
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- These charities retain their distinct objects. For them to become linked charities, a uniting direction must also be made under s.96(6) (either in the scheme, if we are in the process of making one, or by written direction) enabling all the charities to be registered under the same number, and normally also to prepare one annual report and one set of accounts.
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In other cases, we can use a uniting direction to achieve the desired administrative outcome. Broadly speaking, ss.96(5) and (6) of the 1993 Act allow us to link charities together for "all or any" purposes of the 1993 Act. In practice, this is usually confined to the purposes of registration and accounting. |
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An example might be where it is clear that a number of prize funds are set up as distinct charities and are special trusts of an incorporated school charity. The direction would be under s.96(5) directing the funds to be treated as part of the incorporated charity for the purposes of registration. Section 96(6) cannot be used here because the company is itself likely to be the trustee of the funds, whilst the directors are the charity trustees of the incorporated charity. |
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- However, situations also arise where the same trustees are responsible for several different charitable trusts that, although working in similar areas, do not have such a close relationship that all but one of the charities can be identified as special trusts of that one. Technically separate accounts would be necessary for each trust unless a uniting direction is made.
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As this could be onerous and of little benefit to the users of such accounts, a uniting direction on the basis of common trusteeship may be made under s.96(6). This will most often be in the context of NHS charities, but the example above of charities operating for the benefit of a particular parish could also apply. There is in fact no limitation on the specific type of charity that might be subject to such a direction, provided that transparency on the Register is maintained and that there is benefit in terms of administrative convenience. |
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It should be noted that bodies that are not distinct charities should never be included in a Uniting Direction. |
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Some charities were recorded as being administratively connected in Parliamentary Reports before the establishment of the Register, eg poors' or parish charities. Normally these charities will have similar objects and the same trustees. These too may be the subjects of a uniting direction. |
