Until recently many established charities were presumed in law to operate for the public benefit.

To counter the potential for abuse by, for example, private schools, the Charities Act 2006 made it a requirement that all charities would have to exist for a wider public benefit and to report on how they had delivered on this as part of the accountability of their continuing charitable status.

At its simplest the test is that there must be:

  • an “identifiable benefit, or benefits” (it must be clear what the benefit actually is, how it relates to the Objects or aims; there should not be any overall net “harm” that results from the activities) and
  • that these benefits must be available to the public, or a section of the public (not unreasonably restricted by geography or by people’s ability to pay, with some provision for access by people in poverty; any private benefit that arises must be merely incidental)

What will this mean for you?

If you are a new organisation, or newly seeking to register with the Commission, you now have to explain very clearly in Section C of the application form how the activities you will be doing to achieve your Objects (the legal purposes of your organisation) will meet the Public Benefit test for EACH of your Objects.

Remember, the Community Groups Legal Advice Service can give you advice and support with filling in this section and on your application as a whole.

Existing charities will have to meet a new requirement to report on the charity’s “delivery” of public benefit when they submit their Trustees Annual Report.

This has to cover two aspects:

1) The Trustees will now have to make a formal statement that they have complied with the requirement that they governed the organisation with “due regard” to the Public Benefit Guidance issued by the Charity Commission.

Trustees need to become familiar with this guidance, found at www.charitycommission.gov.uk/publicbenefit/publicbenefit.asp.

Make sure that the implications for the work of the charity are discussed at a governance meeting and, ideally, included in the annual work plan.

2)The Trustees Annual Report will, from now on, need to set out how its activities have resulted in benefit to the public, or the wider community, as explained above.

This new requirement will take effect for the first report sent in for activities starting on or before 1 April 2008. This may seem like another bureaucratic burden, however, accountability for public benefit goes to the heart of the “public covenant with charities: the basic “deal” as to why your organisation should have certain privileges as a charity.

Clarity about how your activities have a beneficial impact on the wider community – and being able to explain this briefly and clearly - could be the key to your fund-raising success.

Graham Partridge
Community Groups Legal Advice Worker
Avon & Bristol Law Centre
Telephone: 0117 924 8662
Email: grahamp@ablc.org.uk