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When is a charity not a charity?


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This article makes a category error. There are loads of charities that are in the public sector, for example

  • British Library
  • Thousands of schools that are in Academy Trusts
  • Further Education Colleges (on which the ONS have recently opined)
  • etc etc
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I always thought CRT is a "Chartible Trust" not a "Charity" in the conventional meaning of the word.

 

Charity overview, CANAL & RIVER TRUST - 1146792, Register of Charities - The Charity Commission

 

Canal & River Trust - Wikipedia

 

What is the difference between a charity and a charitable trust? The main difference between a charity and a charitable trust is that your money is just a donation for the former. Then it will not come back to you while a charitable trust is more of an investment where you or designated beneficiaries get a part of its profits as payment which can be used for charity or other purposes.

charity.JPG

 

Narrowboatworld has always taken a distorted view of CRT, IMHO.

Edited by Ray T
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6 minutes ago, Ray T said:

I always thought CRT is a "Chartible Trust" not a "Charity" in the conventional meaning of the word.

 

Charity overview, CANAL & RIVER TRUST - 1146792, Register of Charities - The Charity Commission

 

Canal & River Trust - Wikipedia

 

What is the difference between a charity and a charitable trust? The main difference between a charity and a charitable trust is that your money is just a donation for the former. Then it will not come back to you while a charitable trust is more of an investment where you or designated beneficiaries get a part of its profits as payment which can be used for charity or other purposes.

charity.JPG

 

Narrowboat World has always taken a distorted view of CRT, IMHO.


I am really not convinced there is much difference between a charitable Trust and other forms of charity - the test applied to its objects is the same (ie what it can do), and other constraints (eg on payment of Trustees, handling conflicts of interest, and all the other areas covered by the CC guidance). Some charities are also companies, and some are unincorporated.

There is a major difference in terms of who appoints the Trustees, eg in charities with members, they appoint the Trustees (who appoint the Chief Executive), but this is not the case for CRT (I think).  There will have been quite a debate back in 2012 about exactly how to set up CRT and transfer assets and liabilities to it.

https://www.gov.uk/guidance/charity-types-how-to-choose-a-structure

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Its very tedious that whenever a bad boater is threatened with any sort of action they complain that CRT is a charity and so should be caring for them (by letting them live on the water for free). I expect these are the very same people who are complaining about the proposed increase in licence fees.

Its all very simple, if CRT start giving their money away then the licence has to go up even more to pay for this 😀.

 

It would be probably be better if a new type of company was devised, something like a "public service company forbidden to pay dividends".

The utility and oil companies could be forced to adopt this status, that would be good

 

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47 minutes ago, Ray T said:

I always thought CRT is a "Chartible Trust" not a "Charity" in the conventional meaning of the word.

 

 

 

CANAL & RIVER TRUST is a charitable company limited by guarantee (registered in England and Wales with registered company number 07807276 and registered charity number 1146792) whose registered office is situated at First Floor North, Station House, 500 Elder Gate, Milton Keynes MK9 1BB (“CRT”).

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What difference would it make if the charitable company status was removed?

From  reading on this forum it could save C&RT the expense of trying to collect donations?

 

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1 minute ago, MartynG said:

What difference would it make if the charitable company status was removed?

From  reading on this forum it could save C&RT the expense of trying to collect donations?

 

Charitable status gives CRT tax advantages. Which in effect is government support by another route, but which doesn't show 'above the line' in government accounting.

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2 hours ago, dmr said:

It would be probably be better if a new type of company was devised, something like a "public service company forbidden to pay dividends".

 

I'm no expert but I think that it what a "Company limited by guarantee" is. 

 

With no shareholders, there is surely no-one expecting a dividend.

 

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Before privatisation, our water was supplied by the Essex Water Company, a statutory not-for-profit company, so the concept is not new.

 

I used to belong to a motoring orgsnisation that was a "company limited by guarantee". The small print in the bumph that I received on joining explained that this meant that, in the event of the company becoming insolvent, all members would be liable to pay no more than £1 each, this being the guaranteed amount of members' liability. 

Edited by Ronaldo47
typos
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2 hours ago, MtB said:

 

I'm no expert but I think that it what a "Company limited by guarantee" is. 

 

With no shareholders, there is surely no-one expecting a dividend.

 

 

Having made a loss of £7.2m (2021/22) in their core business activities (listed as 'charitable activities' in the accounts) no one should expect a 'bonus' of any sort. (2020/21 was a loss of £5.9m)

 

Fortunately the sale of assets and the return on their investments from the property portfolio, plus a Pension actuarial gain put them (overall) into profit.

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4 hours ago, Scholar Gypsy said:


I am really not convinced there is much difference between a charitable Trust and other forms of charity - the test applied to its objects is the same (ie what it can do), and other constraints (eg on payment of Trustees, handling conflicts of interest, and all the other areas covered by the CC guidance). Some charities are also companies, and some are unincorporated.

There is a major difference in terms of who appoints the Trustees, eg in charities with members, they appoint the Trustees (who appoint the Chief Executive), but this is not the case for CRT (I think).  There will have been quite a debate back in 2012 about exactly how to set up CRT and transfer assets and liabilities to it.

https://www.gov.uk/guidance/charity-types-how-to-choose-a-structure

As I have replied elsewhere, CRT's status as a trust or charitable trust is not the issue.

The issue is that a charities trustees must be independent.

The ONS justification for classification was quite clear that this is not the case -

 

Quote

The Canal & River Trust is judged to be under government control in particular through the provisions of enabling instruments whereby the Secretary of State for the Environment and Rural Affairs has the power to approve or deny certain corporate decisions (e.g. dissolution).


... which is why Defra are attempting to amend enabling documents to remove those powers such that CRT can continue to remain a charity.
 

2 hours ago, David Mack said:

Charitable status gives CRT tax advantages. Which in effect is government support by another route, but which doesn't show 'above the line' in government accounting.

Yes.
The tax advantage stated in 2012 was £1m pa. No doubt grant was lowered by a similar amount to compensate ...

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14 minutes ago, Alan de Enfield said:

Having made a loss of £7.2m (2021/22) in their core business activities (listed as 'charitable activities' in the accounts) no one should expect a 'bonus' of any sort. (2020/21 was a loss of £5.9m)

 

This is to miss the point I was making.

 

There are no shareholders to expect a 'bonus', regardless of whether a company limited by guarantee makes a loss or a profit. 

 

 

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18 minutes ago, MtB said:

 

This is to miss the point I was making.

 

There are no shareholders to expect a 'bonus', regardless of whether a company limited by guarantee makes a loss or a profit. 

 

 

I think AdeE might have been agreeing with you ...

3 hours ago, David Mack said:

Charitable status gives CRT tax advantages. Which in effect is government support by another route, but which doesn't show 'above the line' in government accounting.

If I can expand on this a bit -


One of those tax advantages is to allow CRT's subsidiary companies to return profits as donations (with gift aid) rather than taxable dividends.

For many years, CRT's performance figures on the Charity Commission website  included  profits from such as BWML as donations.

When CaRt was found out, this happened -

Screenshot from 2023-03-02 00-44-33.png

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13 hours ago, Scholar Gypsy said:

This article makes a category error. There are loads of charities that are in the public sector, for example

  • British Library
  • Thousands of schools that are in Academy Trusts
  • Further Education Colleges (on which the ONS have recently opined)
  • etc etc

I note that Allan(nbAlbert) has made no comment on this post. Does he agree with it and if so does he consider it is also a problem for these other public sector charities as he alleges it is for CRT?

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9 hours ago, Allan(nb Albert) said:

As I have replied elsewhere, CRT's status as a trust or charitable trust is not the issue.

The issue is that a charities trustees must be independent.

That is not obvious from the NBW article which starts:

 

"Allan Richards lifts the lid on the charity that is not a charity but a government body"

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7 hours ago, Orwellian said:

I note that Allan(nbAlbert) has made no comment on this post. Does he agree with it and if so does he consider it is also a problem for these other public sector charities as he alleges it is for CRT?

If we take the Univesities as an example,  they are exempt charities under the Charities Act. They may not register with the independent Charity Commission and are not subject to its control.

 

CRT, as a company limited by guarentee, registered with the Charity Commission in 2012. 

 

 

Charities should be inependent of government and the ONS decission may well result in CRT's charitable status being removed. 

 

To avoid this, it would appear that Defra are attempting to remove its control over CRT.

 

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3 minutes ago, Allan(nb Albert) said:

If we take the Univesities as an example,  they are exempt charities under the Charities Act. They may not register with the independent Charity Commission and are not subject to its control.

 

CRT, as a company limited by guarentee, registered with the Charity Commission in 2012. 

 

 

Charities should be inependent of government and the ONS decission may well result in CRT's charitable status being removed. 

 

To avoid this, it would appear that Defra are attempting to remove its control over CRT.

 

Thanks for that. It sounds like neither CRT not DEFRA (nor the Charities Commission for that matter) were aware that this might be a problem when they did what they did. Or has charity law changed since 2012?

3 minutes ago, Alan de Enfield said:

 

 

If that happens, then presumably any future payments from DEFRA will become a charitable donation, rather than a grant.

There's a risk that if they give up control they stop giving money. Could this issue explain the delay in making a decision on renewal of grant?

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4 minutes ago, Orwellian said:

 

There's a risk that if they give up control they stop giving money. Could this issue explain the delay in making a decision on renewal of grant?

 

 

That was my (unspoken) thinking.

Sorts out the legal (charity) issues and finally gets the mill-stone from around HMG neck.

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20 minutes ago, Orwellian said:

Thanks for that. It sounds like neither CRT not DEFRA (nor the Charities Commission for that matter) were aware that this might be a problem when they did what they did. Or has charity law changed since 2012?

There's a risk that if they give up control they stop giving money. Could this issue explain the delay in making a decision on renewal of grant?

There was an accusation that the papers used to support CRT's registration were incorrect in terms of government control so the Commission may not have been fully in the picture.

 

I have yet to look into this.

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20 hours ago, MtB said:

 

I'm no expert but I think that it what a "Company limited by guarantee" is. 

 

With no shareholders, there is surely no-one expecting a dividend.

 

Any company, wishing to survive in the longer term, has to make an operating profit. The difference is in what happens to that profit - in all cases some will be re-invested in the business (see depreciation) whilst in other companies the profit is distributed to shareholders. Companies limited by guarantee have shareholders (aka Members) but no share capital, beyond the Membership contributions, typically £1 a head. The profit after retentions is   not distributed.

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