Charity Commission Issues New Guidance On Public Benefit Test

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The Charity Commission has today updated the guidance offered to Charity trustees in respect of the Public Benefit test. 

No definitive interpretation has been provided however the Commission aims to produce draft guidance by March 2012 which will then undergo a 3 month public consultation before being published in Summer 2012.

The changes potentially affect all charities, however it is clear that fee paying schools face the most significant risk of falling short of the amended ‘public benefit’ test as they were the subject of the Upper Tribunal decision which sparked this alteration.

The Upper Tribunal found that fee paying schools must ensure that their charitable purpose must be more than minimal or tokenistic, which in practice means that fee levels cannot completely exclude the poor and provision should be made for potential poor applicants to fee paying schools, whether by way of bursary or other means.

The Upper Tribunal was reluctant to ‘draw a line in the sand’ over what would and would not pass the public benefit test, and each charity will have to assess their public benefit on a case by case basis. Charities can charge for what they do but must show how the public benefit test is satisifed in those circumstances.

Further information on the updated Charity Commission guidance and the Q&A responses can be found at http://www.charitycommission.gov.uk/Charity_requirements_guidance/Charity_essentials/Public_benefit/default.aspx

The Charities Group at Forbes solicitors regularly advises on all aspects of charity law, including the public benefit test.  Please contact Daniel Milnes if you require assistance.

Daniel Milnes

About Daniel Milnes

Dan is a Partner and Head of Contracts & Projects. Dan’s blogs cover the areas in which his specialities lie in commercial, regulatory and governance law which cover a broad range of matters dealing with contracts, projects, corporate and group structures, funding and compliance with a range of legal regimes including data protection. This also involves writing and advising on various forms of commercial contracts including joint ventures, development and construction agreements and intellectual property contracts including IT agreements, sponsorships and other rights licensing arrangements.
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