Charities charging ‘high’ fees face public benefit challenges
April 2008
The Charity Commission has published draft supplementary guidance for consultation on public benefit and fee-charging.
This advises charities on a number of options to help them meet the requirement and that ‘we will take account of the level at which a charity decides to set its fees. This will have an effect on the question of what other opportunities to benefit the charity must offer to those who cannot afford to pay the fees it charges’. Charities cannot just opt out and deregister ‘it is not an option for the trustees of an existing registered charity simply to decide that the organisation will no longer call itself a charity, ask to be removed from the register of charities and keep its charitable land, money and other assets’, the Commission warns.
Jonathan Shephard, CEO of the Independent Schools Council accuses the Commission of trying to create the law rather than apply it. ‘In its current form the draft guidance is heavily biased in favour of wealthier charities, which can fund-raise or use endowments to widen access. These charities do a superb job, but are a tiny minority of the charitable estate. Most charities – including schools and retirement homes – have little spare cash’, he comments.
Nick Sladden of Baker Tilly confirmed that ‘shallow concessions, lightweight subsidies or token discounts’ would get the high fee-charging charities nowhere when it came to meeting their public benefit test. The key test for this group is ‘not to exclude the poor from the opportunity to benefit’, he says. Offers of 100% subsidies are unlikely to be the only answer in meeting the requirement and even free services would probably not be enough on their own. He suggests ‘Some charities may need to change their method of working or explore other ways of providing an opportunity to benefit. Independent schools are likely to contribute heavily towards meeting the requirement if they are able to find innovative ways of working in partnership with state schools by, for example, supply teaching staff for subjects the state schools don’t cover’.
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