This section defines a number of the terms we have used in the public benefit assessment reports or elsewhere in this section of the website. There are two categories:
We use this term when talking about what organisations do in order to carry out their aims.
We use this term to mean the purposes of an individual organisation.
The Charity Commission's role in assessing public benefit is about assessing whether an individual registered charity has aims that are capable of being charitable for the public benefit and, if it does, whether or not its trustees are fulfilling their duty to carry out those aims for the public benefit.
Beneficiary or beneficiaries
The people an organisation's aims are intended to benefit.
The Charities Act 1993 as amended by the Charities Act 2006.
A ‘charitable purpose’ is one which falls within the descriptions of purposes in the Charities Act 2006 AND is, demonstrably, for the public benefit. That Act specifically provides there is no automatic presumption that an organisation with a stated aim or object that falls within one of the descriptions of purposes is by that fact alone charitable. An organisation’s aim is only a charitable aim if it is also demonstrated that it is capable of being and intended to be carried out for the public benefit.
Conflict of interest
This occurs when the interests of the charity may conflict with either the personal interests of one or more charity trustees or with the pursuit of a duty that one or more charity trustees may owe to some other organisation. Where trustees are required to make a decision that affects the personal interests of one of the trustees, that person should not be present at any discussion or vote on the matter.
Descriptions of purposes
The Charities Act contains a list of thirteen descriptions of purposes. Those ‘descriptions of purposes’ describe broad areas of potentially charitable activity e.g. the advancement of environmental protection or improvement.
Detriment or harm
Evidence of significant detrimental or harmful effects of an organisation carrying out its aims is relevant to a public benefit assessment. If the detrimental or harmful consequences are greater than the benefits, the overall result is that the organisation would not be charitable.
A governing document is a legal document setting out a charity's aims and, usually, how it is to be administered. It may be a trust deed, constitution, memorandum and articles of association, will, conveyance, Royal Charter, Scheme of the Charity Commission, or other formal document.
Intangible or non-quantifiable benefits
In assessing public benefit, we take account of intangible benefits – that is, benefits that cannot be counted or measured but where it is clear what the benefits are. This would include, for example, benefits to the public generally from conserving the environment.
Material opportunities to benefit
Material means significant, important, relevant and tangible. A material opportunity to benefit cannot be something that is minimal or tokenistic or which happens by chance.
Memorandum and articles of association / articles of association
These form the governing document of a company and set out its aims and the manner in which it is to be administered. As a result of changes in the law, the document is now called the ‘articles of association’.
An organisation's aims (or purposes) are usually expressed in the 'objects clause' of its governing document. However, not all charities have a governing document with an objects clause, and sometimes the objects clause does not adequately or fully express the organisation’s aims. There is therefore sometimes a distinction between an organisation's aims and the words that appear in its objects clause.
People in poverty
Although ‘poverty’ can sometimes be interpreted to mean people who are financially and/or socially disadvantaged, the legal meaning of poverty in charity law means people who are financially disadvantaged. The Oxford English Dictionary defines ‘poor’ as ‘of a person or people; having few, or no, material possessions; lacking the means to procure the comforts or necessities of life, or to live at a standard considered comfortable or normal in society; needy, necessitous, indigent, destitute’. While this is not an absolute definition of what ‘people in poverty’ might mean, it does reflect well the circumstances of people regarded in charity law terms as being ‘poor’.
These are any benefits that a person or organisation receives other than as a beneficiary of a charity. The term does not, therefore, include the sorts of personal benefits people might receive as a beneficiary, such as receiving education, or medical treatment, or a charitable grant.
The public in general; the rest of the public not covered by a defined class of beneficiaries.
Public benefit requirement
The legal requirement that every organisation set up for one or more aims within the descriptions of purposes in the Charities Act 2006 must be able to demonstrate that its aims are for the public benefit if it is to be recognised as a charity in England and Wales.
Public benefit reporting requirement
This means the statutory requirement for charity trustees to report in the Trustees' Annual Report on their charity's public benefit.
A restriction which limits the benefits of a charity, for example to people living in a particular geographical area.
Statutory guidance on public benefit
We published Charities and Public Benefit in January 2008. This is statutory guidance to which the trustees of all charities must have regard. It provides guidance about what the law says about public benefit. We have also produced supplementary statutory guidance which describes in more detail how the law on public benefit applies to certain types of charity. To date, we have produced supplementary guidance for charities that advance education or religion, prevent or relieve poverty or charge fees.
Totality of benefits
This refers to the totality of the opportunities to benefit that an organisation provides in carrying out its aims.
Unincorporated charity trust
This is a charity which is not also a company. The governing document will usually be a trust deed or a constitution and the property of the charity is usually held by trustees or their nominees.
Bursary fund scheme
A bursary is a form of means-tested financial support which enables a student to pursue his/her studies.
Continuity of Education Allowance (CEA)
A grant awarded by the Ministry of Defence to assist Service personnel to achieve continuity of education for their children in the independent school sector that would otherwise be denied in the maintained school sector if their children accompanied them on frequent assignments both at home and overseas. The allowance is available to qualifying Service personnel of all ranks.
Early Years Foundation Stage (EYFS)
The term used to describe integrated care and education for young children.
This is a widely recognised international educational programme of qualifications.
Local authority funding
In the context of residential care homes, this relates to means-tested funding by a local authority for people who are assessed as needing residential care. If a person is deemed to be eligible for a place in a home following an assessment of their care needs, a financial assessment will be conducted to establish how the costs of care will be met. What proportion of the fees an individual may be required to pay by the council depends on their savings, capital and income. The savings limit above which an individual was expected to meet the full cost of fees until April 2009 was £22,250 for England and £22,000 for Wales. The limits below which savings were ignored were £13,500 and £19,000 respectively.
This is an investigative process undertaken to determine whether or not an individual or group is eligible to qualify for financial help.
Palliative treatment is designed to relieve symptoms and improve quality of life rather than cure an illness.
This refers to an interval of rest or relief for carers, when the person they are caring for stays in a care home for a short period of time.
Restricted bursary fund
This is a portion of a charity’s funds dedicated for the use of bursaries.
Top up fees
Any fees that are required to cover the difference between the extent of local authority funding and the fees charged by a care home (see ‘local authority funding’ above) are generally known as top up fees.
The amount that the local authority offers to pay towards an individual’s care may be enough to enable them to find a home that meets their assessed needs. It is, however, up to the individual to find the care home that most suits them. If someone chooses a home where the cost of providing care is more than the local authority is prepared to fund, the local authority (or care home, depending on local arrangements) may seek ‘top up’ payments to cover the shortfall from third parties such as family members. In some cases, the care home may choose to waive the top up payment.
Elsewhere in this section of the website you can find the following information:
If you have questions or comments about our public benefit assessment work please contact us.
Press and media enquiries should be directed to the press office.
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