General election 2015: charities should be aware of campaigning restrictions

Campaigning has always been an important part of some charities' activities.  But since the Transparency of Lobbying, Non-party Campaigning and Trade Union Administration Act 2014 amended the Political Parties, Elections and Referendums Act 2000 (PPERA), campaigning charities have had to register with the Electoral Commission if they exceed a registration threshold for expenditure which might reasonably be regarded as intended to promote or procure (or prejudice) the prospects of particular parties or candidates, including candidates united by policy position.  This is described by the Electoral Commission as the "purpose test".

Can charities still campaign at the general election?

Campaigning and political activity can be legitimate and valuable activities for charities to undertake.  However, political campaigning or political activity, as defined in the Charity Commission's guidance CC9, must be undertaken by a charity only in the context of supporting the delivery of its charitable purposes. Unlike other forms of campaigning, political campaigning or political activity must not be the continuing and sole activity of the charity.

If a charity's trustees breach these restrictions, the Charity Commission may intervene to protect funds which are at risk of being misapplied or to recover funds from the trustees.

What about PPERA?

PPERA has increased the regulatory burden on campaigning charities which must now incur additional expenditure on legal advice and compliance to make sure that (a) they do not need to register with the Electoral Commission or (b) they do register and then comply with rules regulating reporting of expenditure and donations.

Many charities have expressed concern that by registering with the Electoral Commission they could be misconstrued as inappropriately having a political bias.  Charities are prohibited from supporting particular political parties or candidates a basic matter of charity law.  However, the purpose test under PPERA is an objective test of what a reasonable person might think was an intention of an activity, rather than a subjective test of the charity's actual intention.

It is worth reiterating that PPERA does not prohibit a charity from carrying on regulated activity (apart from at levels of expenditure likely to be relevant only to a small minority of charities).  PPERA simply requires a charity:

(i) to register with the Electoral Commission if expenditure on regulated activity is over a prescribed threshold; and

(ii) to report on expenditure and donations.

What sanctions could a charity face if it breaches PPERA?

The consequences could be serious for a charity and its trustees.  PPERA contains various civil and criminal sanctions for breach.  The Electoral Commission can issue compliance notices and stop notices requiring organisations in breach of the rules to take or cease particular actions.  The Electoral Commission can also issue fines of varying levels.  The Commission can refer serious breaches to the police for investigation.

For more information please contact Chris Hook on 0191 211 7929 0r [email protected].