The Charity Commission issued draft guidance in February 2016 in relation to what Trustees need to consider before deciding whether to make a grant to an organisation which is not a charity to carry out charitable activities or projects. While making grants to non-charitable organisations may present new opportunities to further your own charitable purposes, your Trustees will need to understand the risks and boundaries of doing so as non-charitable organisations are not required to deliver public benefit or stick to charitable objectives.
The guidance is clear on the limits on funding organisations which are not charities and, as a charity can only fund charitable activity that is intended to further its purposes, the draft guidance stress that:
- a charity cannot give an unrestricted grant to a non-charity
- a charity can only allow a grant to cover costs that are directly connected to carrying out the activities it has agreed to fund
- a charity cannot fund the core costs (overheads) of a non-charity
What does this mean for churches and PCCs?
If your PCC makes grants (e.g. mission giving):
- check whether the receiving organisation is a charity
- if not, set conditions for what purpose the grant is to be used and ensure the receiving organisation accepts them
- check to ensure the funds have been used as specified
Further details can be found on the Government website.