Charities: charitable status to be stripped from adoption agency favouring same-sex couples

OSCR, the Scottish charities regulator, may strip an adoption agency of its charitable status because it discriminates against same-sex couples. St Margaret’s Children and Family Care Society is an adoption agency based in Glasgow with ties to the Catholic Church.

The regulator’s investigation was triggered by a complaint that, when selecting parents for adoption, the charity gives preference to couples who have been married for 2 years. OSCR considered this to be a breach of the Equality Act which makes it unlawful for a service provider to discriminate on the grounds of a ‘protected characteristic’ such as sexual orientation.

OSCR’s finding follows the English Charities Commission’s decision to refuse to allow an adoption agency to amend its constitution to restrict its services to heterosexuals. That decision fuelled public debate and was challenged in the English tribunals but was eventually upheld.

This case is also set to divide public opinion: UK adoption legislation makes it clear that same-sex couples can adopt, but should a charity be restricted from setting selection criteria in accordance with its religious principles? Yes, says OSCR. Whilst there are some religious exceptions to the Equality Act, they do not apply to charities when they are carrying out services for the public, such as an adoption agency.

What does this mean for charities? Charities need to consider whether they discriminate on the grounds of any ‘protected characteristic’ under the Act; these are:

• Age
• Disability
• Gender identity and gender reassignment
• Marriage or civil partnership (in employment only)
• Pregnancy and maternity
• Race
• Religion or belief
• Sex and sexual orientation

The law recognises that charities sometimes restrict the kind of people they benefit because this helps prevent or compensate for disadvantage (such as Age UK (previously Age Concern and Help the Aged), or is a justifiable way to achieve a beneficial aim (such a drop in centre for female crime victims who would not go if it was open to men).

St Margaret’s Children and Family Care Society has until 22 April 2013 to amend its procedures and assessment criteria to meet the requirements of the Act or its charitable status will be removed. The decision is open to appeal.

Sarah Winter
Senior Solicitor, Charities Team

Everyone is talking about SCIOs!

SCIOs or Scottish Charitable Incorporated Organisations are a new type of vehicle specially designed for charities.  SCIOs are like charitable companies in some ways but, unlike companies, they are regulated only by the Office of the Scottish Charities Regulator (OSCR) and not Companies House.

From 1 January 2012, charitable companies will be able to convert to SCIO joining the various new charities on the register which have had the right to incorporate as SCIOs since 1 April 2011.  When we last checked, there were 58 SCIOs registered at OSCR, ranging from citizen’s advice bureaus to after school care centres to neighbourhood watch groups.  So what makes the SCIO an attractive vehicle to new and existing charities? 

For new charities, the SCIO vehicle, like the charitable company, brings separate legal personality for the organisation.  That means that the charity can hold property, enter into contracts, sue, be sued and employ staff in its own name rather than in the name of its committee members or trustees.  Existing companies may choose to convert to SCIO to be subject to the lighter regulatory regime.  However, all charities are different and it is important for each charity or proposed charity to consider its individual circumstances in order to decide upon the most appropriate legal status.

Something worth noting is that a SCIO’s members are under a duty to try to ensure that the organisation acts in a manner which is consistent with its purposes.  Whilst company directors and charity trustees are under similar duties to their organisations, their ordinary members are not.  An active membership may be a reason to choose to incorporate as a SCIO.  Other reasons include where the organisation has contractual or employment commitments and where the charity trustees require protection from personal liability. 

If you have any questions or would like further advice on SCIOs, please contact Sarah Winter in the Charities Team on 01382 229222.

Sarah Winter
Senior Solicitor – Corporate & Commercial