Charity Commission clarifies rules on public benefit
February 2008
The Draft Public Benefit Guidance issued by the Charity Commission in March 2007 has finally culminated in the publication of its general guidance: Charities and Public Benefit, issued on 16 January 2008.
Andrew Hind, the Commission’s CEO reminded Caritas ‘Charities are special and the public benefit they deliver is core to this. The new reporting requirement will make this explicit and I hope this guidance is both a practical tool to help trustees identify and report on the benefit they bring, and one which encourages them to think creatively and innovatively about how they do so.’
A detailed explanation of the legal implications of the requirement can be found in Jonathan Burchfield's article 'Public Benefit?' in this issue and the impact on independent schools with charitable status – among the first charities to be assessed from next year - has prompted much debate in national media. Of the 2500 independent schools in operation, around 900 to 1000 independent schools[1] have the charitable status with the accompanying tax breaks amounting to some £100m a year.
The launch issue of Caritas (December 2007) highlighted some of the arguments in the Viewpoint feature (see Tony Little's and Steve Sinnot's articles). The Commission is very clear that public purse savings are not enough on their own ‘where…charging restricts the benefits only to people who can afford to pay the fees charged, this may result in the benefits not being available to a sufficient section of the public’.
Eton College raised the important issue of how the new rules affect the goodwill of trustees in its original response to the consultation. ‘Trustees need to be cherished, but their confidence and willingness is sure to be stretched further by the additional burdens now being imposed on them’. There is no question that all charities – from schools to almshouses - who charge for their services face more onerous regulatory and administrative requirements, and that they will need to gear up for this.
The principle of ensuring that ‘people in poverty are not excluded from the opportunity to benefit’ gives charities opportunities to find innovative ways of offering inclusion. The United Learning Trust, a Christian educational charity that manages range of independent schools as well as being UK’s largest sponsor of academies are responsible for many successful partnerships between the schools and the academies, but these sorts of initiatives may not be enough.
Stephen Lloyd, Head of Charity And Social Enterprise at Bates Wells and Braithwaite LLP told Caritas ‘charities that charge fees will need to ensure that they are taking appropriate steps, given their resources , to afford poor people the opportunity to benefit from the charity's activities. These opportunities need to be more than just token- they will need to be tangible, although what this will mean in practice will become clearer over time as sector guidance is published. I do not consider that partnerships between independent schools and the state to establish academies will be sufficient of themselves to satisfy the pubic benefit test- schools will need to give poor people the opportunity to benefit directly from their charitable activities’.
However Jonathan Burchfield of lawyers Stone King commented that the essence of such partnerships is the sharing of educational knowledge and resource between the independent and the state sector and exactly what the provision of public benefit is all about
[1] CaritasData holds records of 750 schools on its database, including umbrella bodies such as the GDST.
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