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01 September 2009

Charity Commission Review of Public Benefit

Charity Commission Review of Public Benefit

Evangelism and Public Benefit

In July 2009 the Charity Commission published its first public benefit assessments to remind all charities they need to demonstrate what makes them charities.
The requirement for charities to demonstrate public benefit was introduced in the Charities Act 2006. In the latest phase of its work to raise awareness and understanding of the new requirement, the Charity Commission has published assessments of the public benefit of 12 charities. The charities assessed include some advancing religion (including United Christian Broadcasters and the Church Mission Society), fee-charging residential care homes and fee-charging schools. Of the 12 assessed, eight are currently meeting the public benefit requirement and four are not.
Dame Suzi Leather, Chair of the Charity Commission, stated that “Charities do a fantastic amount of good and have a unique place in society, which is why they enjoy such high levels of public trust and confidence. They receive the reputational benefits of being charities, as well as tax breaks, so in return it’s right that they demonstrate how they bring real benefit to the public."

The Commission has also published its Emerging Findings report with additional information for trustees about meeting the public benefit requirement. The report contains points of interest from the assessment process which will be of interest to all charities. The Charity Commission published its general guidance for charities in January 2008, followed by supplementary guidance in December 2008, following extensive consultation. Example trustee annual reports are available on the Commission’s website.

All 12 of the assessed charities have already seen their reports and have been advised as to whether they are currently meeting the public benefit requirement. The charities that are not currently meeting the requirement have three months in which to confirm that they have considered their assessment report and will put a plan in place to enable the charity to meet the public benefit requirement, and then a further nine months to submit a suitable plan to the Commission.

All charity trustees are legally required to have regard to Charity Commission guidance to ensure that they carry out their charity’s aims for the public benefit and report on it correctly. The assessments published by the Commission are primarily for the charities that participated in the initial round of assessments, but they are also intended to help other charities appreciate what factors to take into account in reviewing and reporting their own public benefit. To help draw out key factors more clearly the Commission has published the Emerging Findings report which should be closely studied by trustees since the Commission comments on crucial issues such as charitable aims, assessment of public benefit, assessment of detriment or harm,  definition of beneficiaries, private benefit, and questions regarding fee-charging.
Where a charity does not meet the new requirements they will not be stripped of their charitable status. Instead, where a charity is having difficulty demonstrating its public benefit it doesn’t necessarily follow that its charitable status is at risk. The Charity Commission promises to work with the charity and will not insist on changes overnight. The Commission has consulted widely on how it is expected that particular types of charity will meet the public benefit requirement and has produced extra guidance and examples. If a charity continues not to meet the requirement or does not take action to do so, the Commission may take further action, but this will vary on a case by case basis. Where the Commission has identified actions that trustees must take they will work with the charity on a consensual basis. However, if the Commission is forced ultimately to use its regulatory powers, a charity may appeal to the Tribunal at some future stage.

The Commission’s report on the Church Mission Society, for example, is enlightening and states:

“The charity engages in a very wide range of missionary and outreach activities … always carried out with the intention that, on an entirely non-coercive and invitational basis, people should become followers of Christ. Some of the benefits delivered are difficult to quantify and may be viewed as intangible. In assessing public benefit, we take non-quantifiable benefits into consideration, provided it is clear what the benefits are. Benefits which are clear and identifiable and related to the aim are:

  • contributions to founding the church – the charity states that it has taken a significant part in founding about two thirds of the national churches that form what is now known as the Anglican Communion;
  • equipping people for mission work by providing training and support for people undertaking the work, whilst bearing witness to the Christian faith;
  • contributions to education, community health, agriculture and economic development;
  • support of environmental projects; and
  • promotion of human rights.

Benefits which are less tangible or quantifiable but which arise as a result of the beliefs and practices that are promoted by the charity included:

  • contribution towards the development of civil society through imparting positive values, attitudes and skills:

The charity attributes this to the contribution of faith to people’s well-being and the subsequent creation of societal bonds and cohesion. It may be difficult to identify clearly all of the benefits which may arise from the CMS carrying out its aim. There are however some clear benefits to civil society resulting from what the charity does in promoting its moral framework, for example:

  • mediating in times of civil unrest;
  • encouraging churches in Britain to play an active part in community development;
  • encouraging altruism and volunteering;
  • encouraging people to live with simplicity and a commitment to serve other people.
  • providing opportunities for intercultural interchange and international friendship including:
  • participation in the mission work;
  • educational resources fostering cultural enrichment and international understanding”

It is encouraging to note that the Charity Commission appears to be fulfilling its own guidelines in confirming that mission and evangelism convey public benefit.

Up to date information guidelines on public benefit are available from the Charity Commission website http://eauk.co/N8fM3d