Charities - The Public Benefit Test

Among the provisions detailed in the Charities Act 2006

is the requirement that the aims of all charities be for the public

benefit.

On 1 April 2008, the Charities Act 2006 definition of a charity

came into effect. The new definition introduces a wider range of

purposes ? 13 in all ? which better reflect the

diversity of charities that exist today and makes the public

benefit test a legal requirement.

Prior to the introduction of the Charities Act 2006, there were

only four charitable purposes.

The advancement of religion.

The advancement of education.

The relief of poverty.

Any other purposes beneficial to the community.

Those charities with aims falling under the first three purposes

did not have to prove they existed for the public benefit. However,

the Act has removed the presumption that the advancement of

religion and education and the relief of poverty are automatically

charitable. All charities, regardless of purpose, now need to prove

that their aims are for the public benefit.

The 13 Charitable Purposes

The prevention or relief of poverty.

The advancement of education.

The advancement of religion.

The advancement of health or the saving of lives.

The advancement of citizenship or community development.

The advancement of the arts, culture, heritage or

science.

The advancement of amateur sport.

The advancement of human rights, conflict resolution or

reconciliation or the promotion of religious or racial harmony or

equality and diversity.

The advancement of environmental protection or

improvement.

The relief of those in need by reason of age, ill health,

disability, financial hardship or other disadvantage.

The advancement of animal welfare.

The promotion of the efficiency of the armed forces of the

Crown, the police, fire and rescue services or ambulance

services.

Other purposes currently recognised as charitable and any new

charitable purposes similar to another charitable purpose.

Determining Public Benefit

There are two key principles to the public benefit test.

There must be an identifiable benefit.

The benefit must be to the public, or a section of the

public.

Meeting The 'Benefit' Principle

There are three factors to consider when determining whether the

'benefit' principle has been met.

It must be clear as to what the benefits are

The benefits must be recognisable, but do not have to be

measurable. For example, there are many charities that produce

intangible benefits, such as the appreciation of a beautiful

landscape or...