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Corporate Responsibility

Brexit Law: A Briefing for Charities, NGOs and Social Enterprises

28 September 2016

For charities, now is the time to take stock and ensure that funding challenges and potential economic changes can be absorbed

By Mark Mansell, Co-head of Corporate Responsibility at Allen & Overy

The biggest demerger in history, a bitter divorce, a return of sovereignty, Brexageddon. Three months since the United Kingdom voted to leave the European Union, the dust is starting to settle.

While new Prime Minister Theresa May has committed to implementing this decision to leave, many questions remain. What Brexit will look like, when the Article 50 process to formally leave the EU will be triggered and when it may be complete, is not clear.

As a global law firm, we have been working with some of the world's biggest companies to help mitigate this uncertainty. Many of the charities we support through our Pro Bono and Community Investment Programme face similar challenges and we have collaborated with TrustLaw, the Thomson Reuters Foundation, to prepare a paper addressing key issues facing the third sector in dealing with Brexit.

Some charities, like companies, will be considering their geographic options for offices. London's position as a global philanthropic hub, as well as a banking centre, may change. The UK’s influence regarding protection of human rights or the environment may wane. In this context, some organisations are exploring whether to add or expand a mainland European presence to ensure a platform to engage with the world's largest economic grouping, the EU.

The reduced value of the British pound has already brought challenges for British-based charities in meeting funding commitments to international programmes. For charities operating or based outside the UK, a key question will be whether the UK Government's commitment to foreign aid funding will remain at the same level of 0.7 percent of national income, which the Prime Minister states she is committed to doing.

The vote clearly signalled dissatisfaction with the transnational model of law offered by the EU, but this does not mean a rejection of the UK’s leading position in supporting the rule of law globally. For those who campaigned to leave the EU, one argument was that it would allow the UK to take a greater role on the international stage. Let’s hope we see continued outward-looking and creative efforts from the UK to tackle global issues, such as the migration crisis.

For charities, now is the time to take stock and ensure that funding challenges and potential economic changes can be absorbed. Simultaneously, it is a time to be open to new opportunities. We should think about changes to availability and methods of funding as further drivers to encourage the development sector to become more self-sustaining. As ever, charities will find success in refining and adjusting their approaches.

The symbolic impact of the UK’s vote to leave the EU is substantial, but must be managed with cool heads. The divisions in UK society illustrated by the Brexit vote were already apparent to many of the charities that we partner with. Now, more than ever, it is essential that they are supported in rebuilding cohesion and trust between communities and helping redress inequalities at home and abroad.

As lawyers, we tackle tangible problems, and try to find innovative ways to resolve them. Our lawyers did over 31,900 hours pro bono and community investment work in the last financial year, and we will continue trying to harness our energies to make positive social change.

When it comes to Brexit, we don’t have all the answers – indeed we have only just begun identifying some of the questions.

In the meantime, we are committed to sharing our take on how to manage the challenges of Brexit on our specialist website at www.allenovery.com/brexit.

You can read the Brexit briefing that we have prepared for the third sector in full here.

This article was originally published here.

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