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Public Benefit Guidance

by Ian Francis, Development Officer

Meeting the new public benefit requirements from the Charities Commission is an important issue for all existing and potential charities.  After a lengthy period of consultation there is now a new membership requirement that all Charities will have to meet these statutory requirements as of 1^st April this year.  Current guidance from the Commission states that all Charity Trustee’s are now required to have regard for the new guidance, further to this the Commission explains in it’s “Summary Guidance for Charity Trustee’s on Charities and Public Benefit” that “….from this point, all organisations wishing to be recognised as charities must demonstrate, explicitly, that their aims are for the public benefit”. 

So what is public benefit and how do you demonstrate it?  According to the Charity Commission public benefit is “the legal requirement that every organisation set up for one or more charitable aims must be able to demonstrate that its aims are for the public benefit if it is to be recognised, and registered, as a charity in England and Wales”. This is known as ‘the public benefit requirement’.  Within this definition of public benefit there are two key principles which must also be met.  Firstly, benefit or benefits must be identifiable and related to the organisations aims. Secondly, these benefits must be for the public or proportion of the public and that any private benefits are incidental.  This seems obvious enough but how does an organisation go about demonstrating these requirements?

  It is now the responsibility of the Charity Trustee’s to report on their individual Charities public benefit.  For smaller Charities where the income falls below the requirement for an audit, i.e. below £500K, trustee are required to provide a brief summary in their Trustees’ Annual Report of the main activities undertaken in order to carry out the charity’s aims for the public benefit. Using the Charity Commission example, a charity with legitimately small numbers of beneficiaries might be one that offers only a small number of places for the services it provides, such as a small number of available rooms in an alms house or care home.  What is important is that anyone who is eligible to apply can be considered for those places.

 For larger Charities above this threshold a more significant and detailed report will be required to incorporate the following. Details of aims and objectives in light of current activities, strategies adopted and activities undertaken to achieve those aims and objectives, alongside details of the achievements to date within the context of aims and objectives set.                     

            In order to help Charities who are unclear on where to start with assessing their own public benefit, the Charity Commission has published a list of questions within its main statutory guidance which is available on their website, www.charity-commission.gov.uk.                

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