The Charity Commission has published its general guidance for charities on public benefit, with public benefit provisions in the Charities Act 2006 expected to come into force in late March 2008.

The guidance highlights the two key principles of public benefit, namely that there must be an identifiable benefit, and that benefit must be to the public or a section of the public. Most initial mainstream reaction to the guidance has focussed on this latter point, particularly in relation to the charitable status of fee-paying schools, as the opportunity to benefit must not be limited by “unreasonable restrictions” and people in poverty must not be excluded.

The Commission plans to consult with fee-charging charities, charities established for the advancement of education, advancement of religion and the prevention and relief of poverty, with sector specific guidance for those areas intended for the latter half of 2008.

Commission chair Dame Suzi Leather said that no charity would be expected to make changes overnight, and that new reporting requirements would not come in until next year. These include outlining a charity’s public benefit in the Trustees’ Annual Report.

“There is a two-way relationship between charities and society,” Dame Suzi said. “Registered charities enjoy considerable benefits in terms of their reputation and the tax advantages that go with their status. In return, they should publicly account for what they do to benefit society, including people in poverty.”

Stephen Bubb, chief executive of Acevo, said: “The updated guidance on public benefit will be good both for individual charities and the charitable sector as a whole. The requirement to report on public benefit will give charities the opportunity to prove their worth and demonstrate a further level of accountability to the public.”

NCVO’s chief executive Stuart Etherington said it will be up to individual charities to determine how they put public benefit principles into practice, but that it was right that every charity should do so. “This is not about whether particular types of organisation should or should not be charities; it is about what charity means today. Public benefit is at the heart of this question. It is what charities are for and all charities should be able to demonstrate this.”

To view the full the guidance, visit the Commission’s website at:
www.charity-commission.gov.uk/publicbenefit/default.asp