New legislation approved by Jersey's government last week will help confirm the jurisdiction as a leading, mature and flexible centre for global philanthropic work, according to Jersey Finance.
The Charities (Jersey) Law, approved by the States of Jersey on 18 July 2014, creates a robust and modern legal framework to support all types of international philanthropic and charitable enterprise.
In taking care to make sure the new legislation is as flexible as possible, catering for the needs of small local charities as well as global philanthropic structures, Jersey has introduced a unique framework that is expected to prove attractive for a wide range of philanthropic and charitable organisations whilst at the same time providing the appropriate levels of governance and accountability so crucial in this area.
Highlights of the new law include:
- The introduction of a charity test, determined by the Charity Commissioner, for all registered charities, which guarantees that a registered charity can only have charitable purposes and must provide public benefit.
- An entitlement for registered charities to receive charitable tax reliefs and to call themselves a charity.
- A requirement for the governors of a charity (e.g. trustees, directors or foundation council members) to ensure the charity acts in accordance with the law, pursues the stated charitable purposes and delivers public benefit.
- The introduction of restrictions on the use of the terms 'charity' and 'charitable', with only a registered charity being able to call itself a 'charity' and regulations being developed to restrict the use of the term charitable by non-registered entities that undertake any public fund-raising activities.
Jersey already boasts the full complement of company, trust, fund and foundation structures to administer charitable or philanthropic purposes. Now in its fifth year, the number of Jersey Foundations formed in 2014 is currently running at nearly double that of 2013. Research indicates that around a third of foundations formed are directed towards philanthropic activity.
Philanthropy is a growing industry in itself, with the 2014 Capgemini/RBC Wealth Management World Wealth Report 2014 finding that driving social impact was 'very or extremely important' to 60% of high net worth individuals around the world, with those under 40 and those in emerging markets leading the trend.
Geoff Cook, Chief Executive Officer of Jersey Finance, said:
"For some time, Jersey has evidenced a strong philanthropic element as part of its wealth management services, largely through its well-used trusts, foundations and corporate vehicles. This new law, however, will add a welcome degree of clarity and structure to Jersey's charitable framework, setting it apart from other centres and furthering its reputation as a leading centre for global philanthropy.
The new law achieves the sophisticated balance between the flexibility required by industry and the governance and accountability required by the giving public. It has been tailored to meet the needs of a wide variety of charitable and philanthropic organisations, embracing of the requirements of small local charities and equally attractive to the big global philanthropic organisations. No other jurisdiction offers a better and more flexible framework to conduct philanthropic and charitable endeavours and, for this reason, we expect the introduction of this law to be of particular interest to the growing number of high net worth individuals, family offices and their advisers in key markets around the world who are increasingly engaged in this area."
Jersey's Chief Minister, Senator Ian Gorst, added:
"I am delighted to see the introduction of a Charities Law for Jersey. It is an initiative that is very timely and important for the future of Jersey. A fit-for-purpose, modern Law will, first and foremost, support local charities to flourish for the benefit of our whole community. In addition it also paves the way for the introduction of proportionate, common sense regulation, which will increase both consumer and observer confidence and reduce the potential reputational risks in the charities sector for Jersey.
The Government, together with the wealth management sector of the finance industry, are actively positioning Jersey as the leading international finance centre for philanthropic wealth structuring. We are delivering on a clear commitment made in the Government's Financial Services Industry Policy Framework released in April this year , namely to provide a new legislative regime for charities in Jersey which will further advance the Island as a leading jurisdiction for Philanthropic wealth management."
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