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Charities have five years to satisfy Charity Commission on public benefit

Governance | Vibeka Mair | 7 Oct 2009

Charities could have a five-year period to adequately meet new public benefit requirements without penalty from the Charity Commission, according to its chair Dame Suzi Leather.

Speaking at the Headmasters and Headmistresses conference today, Leather (pictured) said: “While we are looking for a demonstrable commitment, year on year, to satisfying the public benefit requirement, where we judge that a charity needs an extended period of time to make the necessary changes, we will be prepared to give that charity time.

“We would not normally expect that period to be longer than five years. We recognise developing partnership activities or building up a bursaries fund will take time. We also recognise that in the current economic climate it is more difficult. We know you can’t pull a rabbit out of the hat.”

Leather told delegates that she expected legal challenges to the Charity Commission’s interpretation of the Charities Act 2006 which stipulates that all charities have to prove public benefit, ending automatic charitable status for organisations that advance religion, education, or prevent poverty.

“There is no doubt that, in due course, the law in this area will be reviewed and clarified by the tribunal and the courts. We accept and welcome this as part of the process of the rational development of the law. Unless and until this happens, and our legal interpretation is overturned, then we are all working with the public benefit reporting requirement and our guidance with regard to the operation of the principles as they stand.”

The Independent Schools Council has threatened to take legal action against the Commission's interpretation of the Charities Act on public benefit, as a last resort, in the wake of two independent schools failing the Charity Commission's initial public benefit assessments in July.

Leather also slammed claims that the Charity Commission had been politically motivated in its approach to public benefit.

“There are some who seem determined to believe that the Charity Commission is politically-motivated,” said Leather. “This is, as we have repeatedly said, untrue. The Commission, let me remind you, is independent of ministers and accountable not to the government of the day but to parliament, and through parliament, to the wider public.

"Our motivation comes straight from one of the statutory objectives we are charged by parliament to deliver – to promote awareness and understanding of the operation of the public benefit requirement. We are the regulator and under the Charities Act this is our responsibility.”

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