The Charity Commission’s new Public Benefit Guidance was published in September 2013. The new guidance comes as a result of the findings of the Upper Tribunal in the Independent Schools Council’s judicial review of the original guidance.

The Commission makes quite clear that this new guidance is not the law on public benefit but rather high level guidance on this complex area of the law. Trustees are obliged to have regard to this statutory guidance when making decisions to which it is relevant.

The new guidance is much improved, clearer and reflects a key finding of the Upper Tribunal namely that how public benefit is delivered is ultimately a matter for the charity’s trustees.

The guidance is broken down into three sections:

PB1 “The public benefit requirement” deals with the requirement that a purpose must be for the public benefit in order to be charitable. In explaining what public benefit means in this context reference is made to the principle adopted by the Upper Tribunal: that no purpose can be charitable if it excludes the poor. PB1 is explained as being primarily relevant to those organisations seeking to register as charities, or those charities seeking to amend their objects. This reflects the Commission's acceptance that the formal public benefit requirement relates to the purposes of an organisation, not the way in which it operates.

PB2 “Running a charity” explains that charity trustees have a duty to carry out their charity’s purposes for the public benefit as part of their general duties as charity trustees. This is not the public benefit requirement laid down in statute, but part of the general duties of charity trustees. The Commission does not seek to indicate what might constitute a right or wrong decision, but rather seeks to explain how to approach them. PB2 includes three Annexes which attempt to identify the particular issues that are relevant in running charities that operate a membership (Annex A); provide facilities to the public (Annex B); and charge for their services (Annex C). The focus of Annex C is the principle that the poor cannot be excluded from benefit and that provision for those who are poor must not be minimal or token.

PB3 “Reporting” emphasises that public benefit reporting is not a compliance issue but should be part of everything that a charity does. Reporting should clarify how a charity has carried out its charitable purposes for the public benefit. It notes that it is not necessary for public benefit to be reported on in a separate section of the Trustees' Annual Report (though many charities may choose to do so).

Overall the new guidance is clear, accessible and easy to navigate. It links well with other Commission material and will be a far more useful tool for trustees than the previous guidance.

If you would like further information on this subject or have any comments please contact Gerald Kidd or your usual contact at Pothecary Witham Weld.


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