Public benefit
Under the Charities Act 2006, all charities have to justify their legal status by proving they are for the public benefit.
The Charity Commission, as arbiters of the new requirement, has produced guidance for charities on how to meet the public benefit test. This 19,744-word document published in January 2008 tries to describe what public benefit is and outlines what charity trustees should consider in order to show that their charity’s aims are for the public benefit.
This guidance identifies and explains the two key principles of public benefit:
- There must be an identifiable benefit or benefits
- Benefit must be to the public, or a section of the public
Independent schools must provide public benefit too
In its summary of the most controversial part of the document, the section relating to independent schools and hospitals, the Commission states that schools charging high fees might have to “think about other ways that people who can’t afford those fees, can benefit”. The Commission suggests that “working in partnership with a local state school” might be one such way.
The new public benefit provisions came into force in April 2008, and from April 2009 charities will have to start declaring in their annual reports how they meet the public benefit test. The level of detail required will depend on whether the charity is above or below the audit threshold.
