Playing by the rules

The allegation that Prince Charles has used his architecture charity as a platform to influence decision-makers is a timely reminder that charities must remain independent at all times, and should approach political campaigningand lobbying with caution.

One of the difficulties is that there is very little case law directly on when and how charities may engage in political activity.

The Charity Commission describes its publication, Speaking Out: Guidance on Campaigning and Political Activity by Charities, as 'a mixture of case law, charity law, and good practice'. Its analysis begins with a read-across from the cases on charitable status. Those cases establish clearly that a political purpose cannot be charitable. In McGovern, Mr Justice Slade, examining the existing case law, concluded that a purpose that involved promoting a political party or promoting political change (a change in the law or in government policy, whether of this country or another) cannot be charitable. The rationale for that conclusion is that the court does not have the means to decide whether or not political change would be for the public benefit so as to be charitable. Moreover, even if it had the means, it would be improper for the court in effect to dictate to government that a particular change of policy or of law would be for the public benefit. Subsequent cases have made it clear that purposes that involve resisting political change cannot be charitable either.

The courts have nonetheless accepted that charities may undertake political activity. However, the basis on which they may do so has not been set out with any degree of consistency. Political activity has been described variously as a subsidiary means, an incidental power, or as an ancillary non-charitable activity.

The difficulty arises from the court's declared inability to determine whether or not political change is for the public benefit. If the court is unable to decide whether a purpose directed at political change is necessarily for the public benefit, it must also be unable to decide whether activity directed at political change is for the public benefit. Because a charitable purpose is one that is characteristically carried out for the public benefit, it follows that the court is not able to treat political activity as the means (at least, in any straightforward sense) by which a charitable purpose can properly be carried out.

Facilitating charitable work

The conclusion to which the cases point is that political activity may be incidental and ancillary to the work of the charity. Political activity is permissible therefore where it facilitates the work of the charity in some way. The relevant legal test is whether it does so and the expense involved has in that context been reasonably and properly incurred.

For example, a charity concerned with relieving a particular medical condition may carry out its object by encouraging beneficiaries to apply for a statutory allowance. The charity discovers that beneficiaries are deterred by the complicated application form specified in the regulations. The charity therefore lobbies ministers for simplification of the regulations.

That sort of political activity plainly facilitates the work of the charity. By contrast, free-standing political activity, entirely divorced from the work of the charity, could not be regarded as ancillary. An animal welfare charity, for example, might try to persuade farmers and gamekeepers to use snares in a humane way and in accordance with a voluntary code of conduct. A campaign to give legal effect to that code would be an acceptable political activity. On the other hand, a charity whose only involvement with snaring is to campaign for it to be criminalised would not be engaged in ancillary activity.

Claims and assertions made in the course of political campaigning that turn out to be inadequately unsupported by evidence may indicate that the campaign is not really ancillary to the work of the charity. At the very least, it is likely to show that the trustees have not exercised their discretion properly in deciding how to conduct the campaign. Accordingly, factual accuracy is an issue which trustees do have to be satisfied about.

In addition, trustees are bound to take reputational issues into account in deciding whether and how to undertake political activity. Charities must, of course, abide by the same rules that apply to everyone else who takes part in political activity. Charities must comply, for example, with the codes enforced by the ASA, the criminal law on incitement and the civil law on defamation. However, there seems to be no legal requirement that charities should engage in political activity only in a 'responsible' way, or that they should avoid emotive language or controversy.

In deciding whether or not to take part in political activity, the charity must satisfy itself that the activity in question will facilitate the work of the charity, and to an extent that justifies the money spent. Where lobbying or campaigning has indeed resulted in political change, it may not be difficult to show that the cost was reasonably and properly incurred. However, political activity that does not result in political change may be more difficult to justify. It may be, for example, that the charity is able to demonstrate increased public support for the change. But it will also need to show that the money it spent contributed to that increase in support.