Fee-charging charities must show public benefit 'imaginatively' says commission

Finance | Gareth Jones | 1 Apr 2007

The Charity Commission has called on fee-charging charities to be 'innovative and imaginative' in maximising the benefits they offer to the public, particularly those who cannot afford high fees.

In its Consultation on Draft Public Benefit Guidance the Commission also says that if an organisation is unable to provide sufficient public benefit, it may need to ensure that any charitable assets are applied for other charitable purposes.

In the consultation the Commission is calling for views that will inform a new public benefit requirement for all charities, to come into force early next year. The 52-page document explains the Commission's approach to public benefit, and sets out four key principles: there must be an identifiable benefit; benefit must be to the public or a justifiable section of the public; people on low incomes must be able to benefit; and any private benefit must be incidental. It sets out, with illustrative examples, what each of these principles means and how it proposes to apply them when assessing charities' public benefit.

The document states that charities can charge for their services but where the charges are so high that they effectively exclude people on low incomes from benefiting, this is likely to affect public benefit. The document also explicitly states that the benefit to society sometimes cited of charities relieving public funds, for example, where an independent school educates pupils who would otherwise have to be educated at public expense, will not be enough.

Directory: Charity Commission

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