The Regulator for Charities in England and Wales
Every charity must benefit the public. It sounds so obvious, doesn’t it? Naturally, activity meriting charitable status should mean more than pursuing a private interest. It should mean more than benefiting a narrow, exclusive group. And it should mean, surely, those on low incomes can benefit too.
In fact, shouldn’t public benefit be something we all understand? Perhaps not always something we can hold in our hands or measure – how do you quantify a beautiful landscape? - but nonetheless something we all recognise as valuable to society.
Today the Charity Commission begins the process by publishing our consultation Charities and Public Benefit, setting out the essential principles which are the basis of the legal test. Our task is to decide how this test should operate, articulating how these concepts can apply to every charity in practice.
Our consultation marks a significant watershed and paves the way towards making the public benefit test a reality. It may also contain some surprises.
Take the benefit of relieving public funds. Charities sometimes do this – for example, independent schools saving the state the cost of educating their pupils, private hospitals saving the NHS the cost of caring for their patients Charities may carry out incidental activities, not directly related to their charitable aims. Prized art collections are rarely housed in portacabins; the buildings they inhabit are often a source of long-standing civic pride in their own right. We acknowledge these other benefits, but will not consider them in weighing up public benefit. An opera charity with the sole purpose of advancing the arts will be assessed against whether people on low incomes can experience opera, not the glory of its architectural façade. An effective test needs effective oversight, and we propose all charities should report on how they meet the public benefit requirement. We think that those which charge high fees where the public benefit may not be obvious should report the value of the benefits they provide against the benefits they receive - including of course the tax breaks. This consultation is an important springboard for charities but it’s not the only one. Today we also publish Citizens’ Standards on Public Benefit, a snapshot of public perceptions of the benefits of charities. These include the ability to respond to need, foster a sense of community and enhance lives – active indicators far removed from the narrow, passive or exclusive. The Citizens’ Standards hold up a mirror to charities, and it’s vital the sector looks back and responds honestly. Alongside the legal test of public benefit is the opportunity for a debate about what it really means to be accountable to the public, and how charities respond to public expectations. This is the time to examine pre-conceptions and remember that public benefit is not an intellectual exercise, but relevant, meaningful, and ultimately a demonstration of impact. I hope all charities will make the most of this opportunity. This article originally appeared in the Guardian newspaper