The role of a member of the governing body of a registered charitable organisation must not be taken lightly. Where a trust or institution has successfully applied for registration as a charitable organisation in Jamaica, care should be taken to ensure compliance with the ongoing filing obligations imposed by law. Failure to comply with certain statutory and regulatory obligations is likely to result in the suspension or revocation of a charitable organisation’s certificate under the Charities Act, 2013 (the Act).

Registered charitable organisations are generally designated as such under the Act to carry out objectives which fall under one or more of the charitable purposes listed in the Act, such as the prevention or relief of poverty, the advancement of education, the advancement of religion and the advancement of health or saving of lives, among others. Once registered, a charitable organisation is entitled to benefit from the tax concessions available to it under the Act.

A registered charitable organisation certificate (certificate) is granted as evidence of approval, by the Charities Authority (the authority) to a charitable trust or institution whether, incorporated or not, which (a) is established for a charitable purpose exclusively; (b) is intended to and does operate for the public benefit; and (c) has no part of its net income or assets enuring to the personal benefit of any governing board member or settlor of the organisation or any private individual, provided that the application requirements have been met.

A certificate is generally valid for a period of two years, unless otherwise determined by the authority, and an application for the renewal of the certificate ought to be submitted to the authority at least two months prior to the expiration date of the certificate. This is to ensure that there is no time lag between the issuance of a new certificate and the last one obtained. The validity of the re-issued certificate will also be for two years, except in special circumstances.

Duty to Prepare, Keep & File Records

The fact that a trust or institution is registered as a charitable organisation must be reflected on all notices, advertisements and other documents issued by it. The charitable organisation has a duty, under the Act, to manage and invest its funds in accordance with the provisions of its constitution, prepare and keep audited financial statements and minutes of each meeting of its board members to enable the authority to assess its activities.

The books and financial records of a charitable organisation are to be kept in accordance with the Revenue Administration Act and annual returns are required to be delivered to the Authority and Tax Administration Jamaica. If a registered charitable organisation is a company, that company is also required to deliver annual returns and audited financial statements to the Registrar of Companies.

The Act also prohibits a registered charitable organisation from altering its charitable purpose(s), as provided for in its constituent document(s), without the prior written approval of the authority and the authority must be notified of such change, or of any change of name, registered address, governing board member or of its constitution, no later than twenty eight (28) days after the charitable organisation becomes aware of such change.

Depending on the size of a charitable organisation, its governing board is responsible for oversight and planning, while delegating management of daily activities to an executive director or chief executive officer. Where a charitable organisation is small, it is common for the board members themselves to be directly involved with the daily activities of the organisation as they generally run solely on volunteer power, with little option of delegating duties to someone else. Notwithstanding the size, it is the board’s responsibility to establish a proper governance structure in which it carries out reasonable diligence to ensure that the applicable ongoing statutory and regulatory obligations are satisfied.

Intervention of the Authority

If the authority is satisfied that a charitable organisation is not operating in compliance with the provisions of the Act, and public interest requires its intervention, remedial or protective actions are likely to be taken by the authority in connection with charity property or the administration of that charitable organisation, including, but not limited to, the following actions:

(a) serving on any person in possession or control of any charity property, a notice in writing requiring that the money so held or other property be delivered to the authority or as the authority may direct; or

(b) taking possession of any records or documents belonging to or in possession or under the control of the charitable organisation and may for that purpose enter and search the relevant premises pursuant to a warrant issued under the Act.

Revocation or Suspension

Further, if a charitable organisation fails to meet any of the obligations under the Act or any term or condition subject to which the certificate was granted has been breached, the authority may elect to suspend or revoke that charitable organisation’s certificate. In deciding whether to revoke the certificate, the authority ought to consider the:

(a) nature, significance and persistence of any contravention of the Act, the Proceeds of Crime Act, the Terrorism Prevention Act or any law relating to fraud or dishonesty by the charitable organisation;

(b) what action the authority or the charitable organisation, could take or has taken

(i) to address such contravention or non-compliance; or

(ii) to prevent any similar contravention or non-compliance;

(c) the desirability of ensuring that contributions to a charitable organisation are applied consistently with the charitable purpose of the charitable organisation;

(d) the extent, if any, to which the charitable organisation is conducting its affairs in a way that is harming or jeopardising, or is likely to harm or jeopardise the public trust and confidence in charitable organisations;

(e) the welfare of members of the public, if any, that receive direct benefits from the charitable organisations; and

(f) any other matter that the authority considers relevant.

In light of the above, it is quite clear that public interest and statute demands accountability of the boards of charitable organisations and some boards may be operating with weak governance models, causing them to run afoul of the applicable laws. Boards may need to re-evaluate their governance models, with the help of good counsel, with the goal of finding the best model that suits their charitable organisation and which will positively influence governance, allow them to stay on top of their ongoing obligations and create a record to easily silence any negative criticism.

Jezeel Martin is an Associate at Myers, Fletcher and Gordon, and is a member of the firm’s Commercial Department. He may be contacted at jezeel.martin@mfg.com.jm or www.myersfletcher.com. This article is for general information purposes only and does not constitute legal advice.