Public Benefit Update

The issue of public benefit has been a contentious one within in the sector since the public benefit presumption for education, religious and poverty-relief charities was removed by the Charities Act 2006. The Act also required that the Commission provide guidance as to the operation of the public benefit requirement and, in turn, that charity trustees must have regard to that guidance when exercising relevant powers.

The Charity Commission's publication of specific guidance on public benefit and fee-charging caused much disquiet particularly in relation to fee-charging independent schools and hospitals.

This week, the Attorney General, Dominic Grieve, has referred to the Charity Tribunal a series of questions that relate to the Charity Commission's analysis and interpretation of charity law in its public benefit guidance.

This reference is said to be intended to clarify the law underpinning the statutory Guidance issued by the Charity Commission in 2008. This Guidance includes the Commission's over-arching guidance on charities and public benefit published in January 2008 and the sector-specific supplementary guidance papers published in December 2008 on:

Public Benefit and the Prevention or Relief of Poverty Public Benefit and the Advancement of Religion Public Benefit and Fee-Charging Additional sector-specific guidance on public benefit and the advancement of moral or ethical belief remains in draft form following the close of a consultation period ending January 2009.

As all trustees are legally required to have 'due regard' to the guidance and confirm this in their annual reporting, the guidance documents have had wide-ranging impact and been subject to particular scrutiny. Particularly controversial has been the proposition in the Guidance that 'people in poverty' must not be excluded from benefitting by the level of fees charged for charitable services, a requirement particularly applicable to fee-charging schools, care homes, hospitals and arts organisations.

There have also been calls since the publication of the...