Since the end of last summer, charities and charity lawyers have been asking for more clarity from the Charity Commission on whether charities could take a position on the EU referendum.
Many, not unreasonably, have formed the view that the outcome of the referendum could have important consequences on their activities and mission, and that they would therefore be failing their charitable purpose (and their beneficiaries) if they did not speak out.
Contrary to some of today’s media statements, this is not just about environmental charities: Universities UK for example launched Universities for Europe, a campaign on behalf of the higher education sector to highlight how the EU helps universities benefit individuals, the economy and society in the UK.
The Prime Minister himself has clearly expressed his wish that NGOs and other organisations shouldn’t hold back from engaging in the debate.
So it is likely that the Charity Commission’s regulatory guidance for charities on the EU referendum published today is going to be an unwelcome surprise for many, due to its negative and prescriptive approach. The sector will be concerned this guidance further seeks to limit their ability to campaign within the law.
What is helpful?
The guidance provides a clear statement that public involvement in the debate will amount to political activity. This is a helpful reminder to charities that they must follow the stricter rules on political activities.
The guidance also highlights that the possibility of a loss of funding is not in itself a justification for political activity directed at a ‘remain’ vote. This is important, because the key issue is how remaining or leaving the EU would affect a charity’s purposes.
What is wrong with the guidance?
The guidance suggests that only in ‘exceptional’ circumstances will it be appropriate for charities to advocate a particular outcome in the referendum. This fails to recognise the otherwise generally accepted view that the EU referendum is a constitutional issue with cross generational significance.
The guidance is interspersed with various warnings that are not appropriate for a piece of regulatory guidance, such as ‘be aware that a decision to engage in political activity will be closely scrutinised’ and ‘any referendum related activity may attract adverse comment’. While these are certainly issues charities should consider, and NCVO would encourage them to do so as good practice, it is an entirely different standard to set in regulatory guidance.
Furthermore, charities are told that they ‘must not allow’ a political party to exploit the charity’s participation in policy discussions for its own benefit. Again, while this is a risk charities should consider, it seems unreasonable to expect them to not allow it to happen since ultimately it will be outside of their control.
What is our view of the guidance?
NCVO fully appreciates that the Commission wishes to ensure that trustees engage prudently with any advocacy and campaigning activity, particularly political activity.
But we are concerned that this guidance suggests that the Commission’s message to charities is that they cannot advocate a particular outcome in almost any circumstances, even if they have considered appropriate evidence and risks and come to a reasonable decision that doing so has an impact on the charity’s purposes.
A much more encouraging approach would have mirrored the guidance issued by the Office of the Scottish Charity Regulator (OSCR) in advance of last year’s referendum on Scottish independence.
This guidance endorsed the ability of charities to campaign for a yes or no vote, provided this was supported by virtue of a clear link to the purposes of the charity. The guidance also made clear that this would not in itself be advancing a political party, which was a reasonable approach in the context of a debate on a major constitutional policy choice, with political parties often falling on different sides of the divide.
These arguments apply just as much to the EU referendum, if not more so.
Elizabeth was head of policy and public services at NCVO until 2020. 
