Notwithstanding the debate and controversy, this case provides an interesting and useful insight into the Commission’s approach when considering new charity registration applications, in particular in the context of equality legislation and how it applies to charities, and is likely to be of interest to anyone thinking of applying for charitable registration.
The following article considers the Commission’s responses to the key objections raised to the registration, the implications of an appeal, and the Commission’s role in determining whether an organisation meets the legal test for charitable status.
Charity registration of LGBA
LGBA is a company limited by guarantee incorporated on 28 November 2019. LGBA’s objects are, in summary, to promote equality, diversity and human rights, in particular, of lesbian, gay and bisexual people.
LGBA’s work in advocating for biological sex over gender and gender identity, including on its social media platforms, has arguably sparked the most attention and opposition from its opponents. While some view its stance as inherently political, transphobic, trans-exclusionary or otherwise undermining transgender rights, LGBA contends that the “new ideologies conflating biological sex with the notion of gender identity and replacing ‘sex’ with ‘gender’” pose a threat to the organisation’s beneficiaries” (LGBA website, Vision Statement).
On 13 March 2020, LGBA applied to the Charity Commission to register as a charity. Objections were raised to the registration, including an online petition receiving over 40,000 signatures.
On 20 April 2021, the Commission published its decision to enter LGBA on the register of charities. In addressing the key objections to charitable status, the Commission held that:
- LGBA’s purposes did not have the effect of unlawfully discriminating against transgender people under the Equality Act 2010. Referring to the charities’ exception, the Commission concluded that a purpose of promoting the equality and human rights of lesbian, gay and bisexual people is not inherently discriminatory and does not necessarily have the effect of inhibiting the rights of transgender people. Some of the language used by LGBA on social media may have been regarded as inflammatory, offensive and not in furtherance of LGBA’s purposes. However, the Commission stated that it had raised concerns with LGBA, and LGBA had since reviewed and revised its social media policy. In addition, LGBA’s social media activity represents a part (but not the totality) of its activities
- there was no evidence that LGBA’s purposes did not express its true purposes, or represent a sham
- LGBA’s campaigning activities were undertaken in furtherance of its stated charitable purposes and were ancillary to those purposes
- LGBA presented evidence of public benefit in support of its application, including raising awareness and educating the public about equality and diversity issues and providing support to lesbian, gay and bisexual people
- LGBA’s purposes, as properly construed, are charitable and beneficial to the public. The consequences of furthering those purposes would not necessarily be detrimental to the public.
The case for an appeal
On 1 June 2021, the charity, Mermaids – which supports transgender, non-binary and gender-diverse children and young people (and their families) – launched a crowdfunded appeal to challenge the Commission’s decision to register LGBA as a charity in the First-Tier Tribunal (Charity). The appeal has since raised £63,358 of a £65,000 target from 2,307 pledges (at the time of writing).
The appellant is seeking an order to quash the Commission’s decision and remove LGBA from the register of charities on the grounds that the Commission erred in its decision to register LGBA is a charity. In summary, the appellant claims that LGBA’s actual purposes are distinct from the purposes as set out in its articles, and instead include the promotion of the beliefs of the current members and directors of LGBA in relation to biological sex, gender identity and transgender rights, which are discriminatory, political and do not satisfy the public benefit requirement for charity registration.
A response from the Commission is expected by 13 July, and the tribunal hearing is likely to take place later this year. It remains to be seen what the outcome of this appeal may be.
What is a charity?
It is clear that the Commission considered the key legal components of charitable status in concluding that LGBA is a charity in law. In order to be recognised and continue to be recognised as a charity, an organisation must be established for exclusively charitable purposes. A charitable purpose is one that:
- falls within one or more of the descriptions of purposes capable of being charitable set out in the Charities Act 2011; and
- is for the benefit of the public.
Public benefit is not clearly defined in the Charities Act 2011. However, a charitable purpose must be capable of providing benefit to the public in general, or a sufficient section of the public to satisfy the legal test.
LGBA’s purposes at Article 2 of its articles of association appear to fall within the charitable purpose for the advancement of human rights, equality and diversity (section 3(1)(h) Charites Act 2011).
It has been established in the courts that if an organisation has clearly stated purposes, the motives and intentions of the founders are irrelevant to the interpretation of its governing document and an examination of the activities that an organisation has been (or will be) carrying out is permitted only if there is any ambiguity about what an organisation’s purposes actually are (see James Miller & Partners Ltd v Whitworth Street Estates (Manchester) Ltd  AC 583; Incorporated Society of Law Reporting for England and Wales v Attorney General  EWCA Civ 13 (at paragraph 99E), as applied in Helena Partnerships Limited v HMRC  UKUT 271 (TCC)). For this reason, the Commission struggled with the argument that LGBA’s purposes in the governing instrument did not declare its true objects, in the absence of alleging a sham.
The Commission also found that the public benefit requirement was satisfied on the evidence, including raising awareness and educating the public about equality and diversity issues and providing support to lesbian, gay and bisexual people.
While an organisation will not be charitable if its purposes are political, it is legitimate for charities to engage in campaigning and political activity in the context of supporting the delivery of their charitable purposes, provided that this is not the sole activity of the charity. The Commission concluded on the evidence that while some of LGBA’s campaigning activities were political in nature (such as advocating for law reform) such activity did not represent LGBA’s sole activity and did not prevent it from being charitable.
An organisation will also not be charitable if its purposes are unlawful or contrary to public policy. This includes purposes that unlawfully discriminate against an individual or group with a protected characteristic (including gender reassignment) as defined by the Equality Act 2010. However, charities may avail of the ‘charities’ exception’ if the restriction can be justified as either tackling a particular disadvantage faced by people who share that characteristic, or being a proportionate way of achieving a legitimate aim. In this case, the Commission held that a purpose of promoting the equality and human rights of lesbian, gay and bisexual people is not inherently discriminatory, despite agreeing that LGBA’s social media activity may have caused offence.
The Commission’s role in assessing applications for charitable status
In handing down its decision, the Commission also sought to highlight its function when assessing applications for charitable status, particularly where the organisation promotes controversial activities:
“It is not the Commission’s role to make value judgements about the aims or ideas put forward by any organisation. Instead, its role is to decide whether an organisation’s purposes fall within the legal definition of charity.”
This is not the first time the Commission has highlighted this position. The Commission’s Chief Executive Helen Stephenson CBE succinctly captured the Commission’s role in assessing applications for charity registration when commenting on the registration of controversial charities in 2019:
“If something is legally charitable, we have to put it on the register.”
The Commission’s regulatory remit
Whether the Commission was correct in its determination that LGBA satisfies the legal test for a charity may be clarified by the First-Tier Tribunal on appeal. In the meantime, opponents of this decision may find comfort in the fact that, once established with exclusively charitable purposes, the overriding duty of charity trustees is to operate the charity in furtherance of the specific purposes for the benefit of the public.
The Commission has the power to take regulatory action where a charity is found to be acting outside its charitable purposes (see, for instance, the Commission’s regulatory compliance case against National Rifle Association). The Commission hinted in the present decision that it would be willing to do so if, for instance, a charity promotes the rights of a group or groups whilst demeaning or denigrating the rights of others (see paragraph 39).
LGBA faces enhanced regulation, accountability and scrutiny now that it falls within the Charity Commission’s regulatory remit and many will be primed to alert the regulator of any examples of non-compliance.
For further advice on the implications of this decision for your charity, please contact Liz Brownsell or another member of the Birketts Charities Team.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. It should also not be taken as endorsing any opinion or ideology promoted by any of the organisations or campaigns mentioned. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at June 2021.