Trustees of independent schools and other fee-charging charities will have “huge discretion” to decide whether and how poor people can access their services under the Charity Commission’s new public benefit guidance, a Commission manager told a public meeting yesterday.
And they will not be at risk of losing their charitable status even if they are not running their charity for the public benefit, provided their charitable purposes are for the public benefit.
Jo Edwardes (pictured), head of status and public benefit at the Commission, told the Charity Commission meeting in Nottingham that the revised guidance, due to be published by early August, would separate the public benefit requirement in relation to charitable status from the public benefit test in relation to the charity’s operations.
This should reassure trustees of charitable schools and other charities that charge high fees, that the Charity Commission is not going to strip them of their charitable status if they fail to run their charity for the public benefit, she said.
The Commission was ordered by the Charity Tribunal to rewrite its public benefit guidance after the Independent Schools Council mounted a successful legal challenge to it two years ago.
The regulator issued its new draft for consultation last summer and since then has been working to amend it to take into account all the feedback.
Edwardes said the new guidance would comprise three short, high-level guides on three distinct contexts:
- The public benefit requirement (in relation to charitable status)
- Running a charity for the public benefit; and
- Public benefit reporting
Issues such as whether fee-charging charities are providing access to their services for poor people will be covered in the second guide. Edwardes said the guidance would emphasise the importance of trustee decision-making in relation to running a charity, and would make clear that charitable status will be removed only if the charitable purposes had failed to be for the public benefit.
Decisions on access to services lie with trustees
Asked what would happen if the Commission received a complaint that a fee-charging charity was not providing sufficient access to poor people, Edwardes said the Commission’s remit would be limited to assessing whether trustees had properly considered the matter. The final decision rests with the trustees, she said, “as long as they have discharged their duty and followed due process”.
“They must make those decisions within a range of decisions that would be reasonable for any body of trustees to make in the circumstances, but there is a huge amount of discretion there for trustees.
“It is for your trustees to decide whether your fees are more than the poor can afford, it is a decision for you to make about what level of provision you are going to make for the poor to benefit, provided it is more than minimal or token.”
Edwardes added that sometimes in very extreme cases, issues that crop up to do with running a charity can indicate a problem with its charitable purposes.
But she insisted: “No charity would ever be rejected at registration stage or removed from the register on the basis that they are not running the charity for the public benefit, it would always be because ultimately their purposes are not for the public benefit.”
Revise bespoke guidance
The new guidance will be available in online and offline formats, in response to criticism that the online draft was confusing and difficult to navigate.
Edwardes also said the policy team would soon review and reposition the tailored guidance on poverty, education and religious charities, and issue new guides on descriptions of charitable purposes.
Nobody from the Commission was able to answer a question on whether the new Sorp, due to be published for consultation next week, would require charities to report their achievements in relation to the public benefit requirement.
