Part 1: Purposes, Powers and Governing Documents Section 7: Proceeds of fund-raising: power of charity trustees to apply cy-près
Prior to the commencement of section 7 of the Act, where the proceeds of a failed fundraising appeal were applicable cy-près, those funds could only be used for other charitable purposes if the Charity Commission made a cy-près scheme. Section 7 inserts a new section 67A into the Charities Act, which allows charity trustees to apply the proceeds of a failed fundraising appeal to other purposes, without the need to obtain a cy-près scheme. Where the proceeds exceed £1,000, the charity trustees must obtain the consent of the Charity Commission. The financial threshold of £1,000 can be amended by regulations: section 67A(5).
	The power is available whenever proceeds from a fundraising appeal are applicable cy-près (section 67A(1)).
In the case of an initial failure of the appeal (typically where insufficient funds have been raised so the purpose of the appeal cannot be achieved), the default position is that the requirement for, and absence of, a general charitable intention prevents the proceeds from being applicable cy-près. That default position is ameliorated by section 63A (inserted by section 6(1)). The proceeds will therefore only be applicable cy-près if a condition in section 63A is satisfied.
In the case of a subsequent failure of the appeal (where there is a surplus after achieving the purpose of the appeal), there is no requirement for a general charitable intention and the proceeds are therefore applicable cy-près without the need to consider section 63A. Such proceeds will be applicable cy-près by virtue of section 62(1)(a) or (b).
	The section 67A power is exercisable by the charity trustees passing a resolution that the proceeds should be used for different charitable purposes. In making that decision, the trustees must have regard to the two matters in section 63A(2), which broadly mirror the considerations that must be taken into account by the Charity Commission when it is deciding (i) whether to consent to an unincorporated charity changing its purposes under section 280A (see section 3 of the Act), (ii) whether to consent to a charitable company or CIO changing its purposes under sections 198 and 226 (see sections 1 and 2 of the Act), and (iii) whether to make a cy-près scheme (see section 67 of the CA 2011).
	If the proceeds do not exceed £1,000, the resolution of the trustees under section 67A takes effect immediately. If the proceeds exceed £1,000, the resolution takes effect when the Charity Commission consents to it: section 67A(4). To ascertain whether a resolution can take effect without Charity Commission consent based on the value of the proceeds not exceeding £1,000, it is necessary to calculate the total value of all the donations to a single appeal that are applicable cy-près. If a fund comprises two donations of £5,000 (which are not applicable cy-près because section 63A does not operate) and 90 donations of £10 (which are applicable cy-près because section 63A(3) operates), the total value of donations in the fund that are applicable cy-près is £900 (i.e. 90 x £10). The section 67A resolution in respect of those donations totalling £900 would not require the consent of the Charity Commission. The fact that the fund also includes £10,000 which is not applicable cy-près does not mean that the trustees need Charity Commission consent in respect of their resolution to use the £900 (which is applicable cy-près) for other purposes.
	The amendment to section 337 of the C 2011 by section 37 gives the Charity Commission a discretion to require the trustees to publicise the resolution (or to publicise it itself) and seek representations on it before consenting to it.