Questions and Guidance for Trustees
Content
You can also view a PDF version of the Public Benefit Assessment - Questions and Guidance for Trustees.
A. Introduction
We send this document to each charity included in our public benefit assessment programme. Its purpose is to help you provide the information we need as part of our assessment of whether your charity exists and operates for the public benefit.
A1. Using this document
We start the assessment by asking for information about the charity's aims and the ways in which it carries out those aims - see section 1.
We then ask a number of key questions in sections 2 - 6, which ask for information that will help us to assess your charity against the public benefit principles set out in our publication Charities and Public Benefit:
Principle 1 - there must be an identifiable benefit or benefits
Principle 2 - benefit must be to the public, or a section of the public.
To help you address these questions, this document provides guidance on the issues to consider for each one.
A2. How to provide the requested information
We ask you to provide a statement of the charity's aims, your response for each question, and any relevant supporting information you may wish to attach.
Please read the notes for each section before answering the questions. Annex A gives examples of the sorts of supplementary information which, if relevant for your charity, would be useful for you to provide in support of your response. To avoid duplication, when answering the public benefit questions you may find it helpful to cross refer to relevant passages within these documents.
In all cases, we also ask you to supply:
- a full up-to-date copy of the charity's governing document, if not already provided;
- a copy of the charity's latest report and accounts, prepared according to the requirements for your charity - for further information follow this link to our guidance: Accounting and Reporting; and
- a copy of any draft report and accounts, if available, and (if due) your estimate of when the finalised documents will be filed.
Please attach your response to the completed Public Benefit Assessment Charity Details cover sheet (POL-1206) and send it to the Public Benefit Review and Reporting team by email: publicbenefitassessments@charitycommission.gsi.gov.uk.
A3. Relevant guidance to read before completing this questionnaire
To help you address the questions, we have provided some further guidance and references to the most relevant sections of our public benefit guidance, which consists of the following:
A4. Data protection
We will handle the information you send us in accordance with the law relating to data protection. Our data protection statement is set out at Annex B.
B. Your charity's aims
Please read these notes before answering the questions in this section
At the heart of our assessment of public benefit is a consideration of the aims of the charity. This is because the public benefit requirement is that each of a charity's aims is for the public benefit.
We ask that you begin your response by stating the charity's aims and how you interpret them. We can then check that we are assessing public benefit against an agreed statement of the charity's aims.
Section 1
What are the charity's aims?
We use the term 'aims' to mean the purposes of an individual organisation. A charity's aims 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 charity's aims.
Carrying out the charity's aims
Assessing what a charity's aims are, and whether they are being carried out for the public benefit, is not simply a case of considering the words in its objects (or a statement of the aims) in isolation. It is about ensuring that the aims, as they are understood and applied by the trustees, are in fact carried out for the public benefit. After all, no one can benefit from a charity, however well its aims are expressed, unless the charity takes action to carry out its aims.
We therefore ask you to tell us about the ways in which your charity carries out its aims.
We also ask you to list any other significant activities that the charity carries out which do not directly advance the charity's aims. This information is helpful in identifying whether any change to the charity's aims may be needed to fully reflect all of the work that the charity does, or identify any areas where the charity may be experiencing 'mission drift', where it has strayed from its original aims. We recognise that, over time, charities develop and change as the needs of their beneficiaries, and the social and economic circumstances in which they operate, change.
Charities may work with, or for, other organisations in delivering services or facilities that meet the aims of both parties. In doing so, there might be areas where these aims coincide, and others where they differ. In assessing public benefit we look at how charities manage the relationship with their partners, including any conflicting or diverging objectives, and how they maintain their independence in pursuing their aims for the public benefit.
Questions
Please:
1.1 State the charity's aims (as expressed in the charity's objects where appropriate).
1.2 Describe what the charity understands these objects to mean in the present day context.
1.3 Describe what the charity does to carry out its aims.
1.4 Describe any significant activities the charity carries out which do not directly advance the aims and why the charity carries out these activities.
1.5 State whether the stated objects (as expressed or understood) fully and accurately reflect all of the present day work of the charity.
1.6 If relevant, please advise if your charity works with other organisations to deliver your charity's services, or to deliver services on behalf of that organisation. If this is the case:
- provide details of the terms or nature of the relationship and how the trustees manage their relationship
- if your charity has a formal agreement or contract to provide services on behalf of another organisation, please provide a copy of this document with your supporting information
C. Assessing the public benefit of your charity's aims
Please read the notes before answering the questions in this section
The questions which follow are designed to gather information about how each of your charity's aims satisfies the principles of public benefit. We ask you to consider these questions in providing your response. Please address each question as fully as you can, bearing in mind that not all of them will apply equally to your charity. Each question is accompanied by further guidance to help you in providing your response and includes references to the relevant passages in our general guidance Charities and Public Benefit.
Principle 1: There must be an identifiable benefit or benefits
Principle 1a It must be clear what the benefits are
Principle 1b The benefits must be related to the aims
Principle 1c Benefits must be balanced against any detriment or harm
The first principle is about the benefits which flow from carrying out your charity's aims and whether any detriment or harm might also arise which outweighs the benefits. Section E of Charities and Public Benefit looks in detail at this principle:
Section 2
Benefits arising from your charity's aims
Looking at each of the charity's aims, we ask you to describe, separately, the benefits that flow from each one.
Describing the benefits is not the same as simply describing what the charity does (that is covered in the section on your charity's aims). It is about describing the ways in which the public benefits as a result of what the charity does.
For example, providing facilities for sport and recreation may give rise to benefits for people's physical and/or mental health, or improve their conditions of life.
Not all of the people who can benefit from the charity's work will necessarily benefit in the same way, as the needs of different types of beneficiary may vary. The benefits to the public should be capable of being recognised, identified, defined or described but that does not mean that they also have to be capable of being quantified or measured. We also ask you to indicate how the charity can identify or assess these benefits. Where any claimed benefits to the public are unclear, or debatable, this may need to be shown by evidence. You will find examples that illustrate what is meant by this and further guidance at section E of Charities and Public Benefit
Some benefits to the public may also arise from activities the charity undertakes which are not related directly to advancing the charity's aims. Although those benefits cannot be used as a way of demonstrating that the aims are for the public benefit, and so are not taken into account when assessing the public benefit of those aims, it may be that a change to the charity's aims is needed in order to reflect that aspect of the charity's work. It is therefore helpful to know what benefits to the public might arise from those activities if the aims were amended.
Questions
Please:
2.1 Describe the benefits to the public that arise from carrying out each of the charity's aims and how the trustees have identified or assessed those benefits (based on evidence if necessary).
2.2 Describe any benefits to the public that arise from carrying out any significant activities that do not directly advance the charity's aims.
Section 3
Potential or actual detriment or harm arising from your charity's aims
The achievement of a particular aim may be of some benefit to the public but, in achieving that benefit, may also have (potential or actual) detrimental or harmful effects. In assessing the public benefit of individual charities, we will consider any evidence of significant detrimental or harmful effects of that charity carrying out its aims in its particular circumstances. There would need to be some real evidence of detriment or harm; it cannot just be supposed.
The existence of detriment or harm does not necessarily mean that the organisation cannot be charitable. It is a question of balancing the benefits against the detriment or harm. If the detrimental or harmful consequences are greater than the benefits, the overall result is that the organisation would not be charitable.
Examples of potential detriment or harm arising from the charity's aims are as follows:
- in the case of a charity providing facilities for sport and recreation, the detrimental effects of providing facilities for dangerous sports where the risks of injury are not properly managed or mitigated;
- charities which offer coaching by people who are not suitably qualified to provide it;
- charities which offer services or facilities for children without having suitable child protection policies and procedures in place;
- charities which do not have adequate health and safety policies and procedures to ensure the facilities and equipment are properly maintained would undermine any health or other benefits that might otherwise arise from the provision of those services and facilities.
For further information about assessing (potential or actual) detriment and harm please refer to section E4 of Charities and Public Benefit.
Questions
Please:
3.1. Describe any (potential or actual) detriment or harm that might arise from carrying out the charity's aims and what steps the trustees take to manage or mitigate the risks.
3.2. If your charity is subject to inspections by other regulators or funders, please provide copies of, or refer to extracts from, any recent reports where these assess the activities of the charity against agreed standards.
Principle 2: Benefit must be to the public, or a section of the public
Principle 2a The beneficiaries must be appropriate to the aims
Principle 2b Where benefit is to a section of the public, the opportunity to benefit must not be unreasonably restricted:
- by geographical or other restrictions or
- by ability to pay any fees charged
Principle 2c People in poverty must not be excluded from the opportunity to benefit
Principle 2d Any private benefits must be incidental
The second principle is about who benefits from the charity carrying out its aims. Section F of Charities and Public Benefit looks in detail at this principle.
Section 4
Who benefits from your charity's aims?
In most cases this will be obvious from the wording of the objects clause. If it is not, it will be necessary to consider all the relevant information about how the charity carries out its aims and who has the opportunity to benefit.
What matters is that the benefits from carrying out the charity's aims are to the public at large, or to a sufficient section of the public. What is 'sufficient' will vary depending on what the charity is set up to do. The beneficiaries of a charity should therefore be considered in the context of its aims, and must be appropriate to the aims. Section F2 of Charities and Public Benefit provides further guidance on this.
Where the benefits are available, specifically, to the public at large, or where who can benefit from the charity is not defined or restricted (either in its stated aims or in practice) then sub-principle 2a is likely to be met.
Where the benefits are available to a section of the public, the opportunity to benefit must not be unreasonably restricted. A charity can restrict benefits to a section of the public where doing so is reasonable and relevant to the charity's aims. The ability of the charity to satisfy principles 2a and 2b will be affected only where the restrictions are unreasonable.
There are a number of possible ways in which who can benefit from a charity's aims might be defined as, or restricted to, a specific section of the public.
In some cases the restrictions on who the aims are intended to benefit are evident from the wording of the charity's aims: For example, one or more of the following might apply :
- a geographical restriction - where the beneficiaries are defined on the basis of where they live (see section F4 of Charities and Public Benefit);
- restrictions based on charitable need - where the beneficiaries are defined on the basis of some common need, such as poverty, age, ill-health, disability, social or economic circumstances (see section F5 of Charities and Public Benefit);
- restrictions based on personal circumstances - where the beneficiaries are defined by reference to their gender, race, religion, age or other defining characteristics (see section F6 of Charities and Public Benefit).
Where this is the case, we will be able to clearly see from the objects what restrictions are in place and will consider whether those restrictions are reasonable in the charity's circumstances. We will ask how the trustees apply and interpret those restrictions in practice.
In some cases the restrictions may not be evident from the wording of the charity's aims, but they exist in practice: For example, one or more of the following might apply:
- Restrictions on access to facilities - where there are limitations placed on who can have access, what can be accessed or the degree of access that people can have (see section F7 of Charities and Public Benefit).
- Restrictions based on eligibility for membership - some charities have a membership structure under which the members are also beneficiaries. In such a case, any restrictions placed on who may join as a member should be reasonable and justifiable in the circumstances and linked to the charity's purposes (see section F8 of Charities and Public Benefit).
- Restrictions based on trustees' discretion - where the benefits are restricted to a particular group of people purely on the basis of the exercise of trustees' discretion (see section F9 of Charities and Public Benefit).
- Restrictions based on ability to pay any fees charged (this sort of restriction is dealt with separately below).
Where this is the case, we will ask for details of those restrictions and how they operate in practice. We will consider whether those restrictions are reasonable in the charity's circumstances.
For example, in the case of a charity that provides facilities for sport and recreation, benefits might be delivered via a membership structure which is limited to people who are resident in a specified geographical area. We will be interested to know: the size of that geographical area; whether membership numbers are limited (perhaps for reasons of health and safety); whether membership is open to anyone in the area or whether new members must be nominated and seconded by existing members; whether playing members must satisfy a test of ability; whether team structures are in place to accommodate playing members of different abilities; whether certain facilities are available exclusively, or predominantly, for players of the highest ability, etc.
The type of restrictions that may be relevant to your charity might include the selection of beneficiaries on the basis of (for example) talent or ability, or the existence of a competitive structure which determines how beneficiaries access the benefits available.
We would like you to tell us if any such restrictions exist in practice and, if they do, describe what they are and why they are necessary;
Questions
Please:
4.1. Describe who your charity's aims are intended to benefit.
4.2. Where any restrictions on who the aims are intended to benefit are evident from the wording of the charity's aims, provide details (as appropriate) on:
- Whether, and how, all the restrictions are applied in practice.
- Whether the trustees experience any difficulties in applying those restrictions.
- What views (if any) the trustees have on whether the restrictions are reasonable in the charity's circumstances.
- Whether the trustees consider any of the restrictions to be inappropriate or no longer applicable.
4.3. Where any restrictions on who the aims are intended to benefit are not evident from the wording of the charity's aims but exist in practice, provide details of:
- Any restrictions on access to facilities (such as set opening hours, or limitations on what areas people can access, or limitations on who can have access) and any justification for those restrictions.
- Where people have to be a member of the charity in order to benefit, any restrictions on who can be a member (Is it open to anyone? Are there team structures which require levels of ability to be demonstrated? etc), how those restrictions are applied in practice and the justification for such restrictions, whether different sorts of benefits or access to services are available for different types of member.
- Where who benefits is decided at the discretion of the trustees, what criteria the trustees use to decide who can benefit and the justification for such restrictions.
Section 5
Charging for your charity's services or facilities
All charities have to be able to show that the opportunity to benefit from their aims are not unreasonably restricted by reason of people's ability to pay any fees charged and that people in poverty are not excluded from the opportunity to benefit. This relates to public benefit principles 2b and 2c, further guidance on which can be found in Charities and Public Benefit, sections F10 and F11, and in our separate guidance on Public Benefit and Fee-charging. All charities have to demonstrate that they satisfy these principles; charities that do not charge for any of their services or facilities, or which charge low fees (which most people could afford) are usually able to do so without difficulty.
Charities can charge for the services or facilities they provide. They can also charge fees that more than cover the cost of those services or facilities, provided that the charges are reasonable and necessary in order to carry out the charity's aims, for example in maintaining or developing the service being provided. There must be opportunities to benefit throughout the range of people who cannot afford the fees, including people in poverty.
Trustees should have a rational basis for setting fees and consider the impact of them on who can benefit.
Questions
Please describe:
5.1 What fees, if any, your organisation charges for its services or facilities; the standard price tariff, list of charges or fee levels for each area of activity.
5.2 Any reduced rates (for example, for members, families, groups, those on state benefits). In providing information about reduced rates, please include details about each type of reduction, including:
a. the basis for each reduction and how people qualify for it;
b. what the reduced rates are;
c. any targets for the number and/or overall value of reduced rates offered and taken up;
d. what steps are taken to draw the fee reductions to the attention of those who might benefit from them;
e. the total value of income foregone as a result of reduced charges as compared with the standard prices.
5.3. How prices, charges or fee levels are set; for example, are charges intended to cover, or exceed, the cost of the activity, or is some other formula used? Where different formulae are applied for different activities, please indicate the formula used for each activity.
5.4. Whether the charity carries out any means testing and, if so, how any such test operates.
5.5. Whether there are any formal funding schemes, subsidies or grants which either help your charity to keep fees down or which are available to help beneficiaries meet the charges. If so, please provide details of their terms, the organisations involved and how much such funding is worth.
5.6. Any other ways in which the charity provides opportunities to benefit to those who cannot afford the standard fees or charges. (You may find the examples in Annex C of Public Benefit and Fee-charging and section G of Public Benefit Assessments: Emerging Findings from the Charity Commission's public benefit assessment work: 2008-09 helpful in this respect.) In this case, please detail:
a. the activities;
b. who they are aimed at;
c. any associated costs to the charity;
d. how these costs are covered;
e. their frequency; and
f. how the trustees promote the work of the charity and to whom and how the charity advertises to potential beneficiaries the availability of its services.
Section 6
Benefits to individuals or organisations who are not beneficiaries
'Private benefits' are benefits that people, or organisations, may receive other than as a beneficiary.
Where individuals or organisations benefit in some 'private' or non-charitable way from what a charity does this is acceptable so long as those benefits can be considered 'incidental'. Private benefits will be incidental, in this respect, if it can be shown that they directly contribute towards achieving the charity's aims and/or are a necessary result or by-product of carrying out those aims. This will be the case where:
- the benefit is a necessary result of some action that is taken, and is only taken, with the intention of furthering the charity's aims; and
- the amount of private benefit is reasonable in the circumstances.
Private benefits are not limited to financial benefits. Examples include:
- payments to trustees or any related party;
- payment of salaries to people other than the charity's staff (eg payment of professional players in a sports team);
- commercial benefits to private businesses;
- membership benefits or earnings;
- benefits to individuals' careers or reputations as a result of coaching, development or promotion by the charity.
For further information about private benefits please refer to section F12, Charities and Public Benefit.
We need to know what private benefits arise from the charity carrying out its aims, and the circumstances in which they arise, so that we can determine whether these are incidental benefits.
Questions
Please:
6.1. Provide full details of any private benefits that arise from carrying out the charity's aims, including:
- in the case of payments to trustees or connected parties, the amount of benefit received during the last financial year, the authority for the payments, the reasons for providing the authority including the grounds on which they were regarded as reasonable, how any conflicts of interest are managed;
- in the case of membership benefits, how these are justified as being in the interests of advancing the charity's purposes for the public benefit;
- in the case of benefits to an individual's career or reputation, what these typically entail and how these are justified as incidental to the charity carrying out its aims for the public benefit;
- other types of payments other than the standard costs of running the charity;
- any other private benefits not mentioned above.
ANNEX A
Supporting Information
We ask you to provide some further information in support of your response. To avoid repetition, you may wish to cross-refer to these documents in your answers.
Please provide the following:
- A full up-to-date copy of the charity's governing document, if not already provided.
- A copy of the charity's latest report and accounts, prepared according to the requirements for your charity.
- A copy of any draft report and accounts, if available, and (if due) your estimate of when the finalised documents will be filed.
- Details of any umbrella body or other organisation to which the charity belongs.
Because our assessment is evidence based, we ask you where possible to provide documentary evidence which supports your statements about the public benefit provided by your charity. Examples of the types of documents you might like to include, if available to you, are listed below:
- A business plan, budget and any statistical information, particularly where this is relevant to question 7 on charges.
- Any recent evaluation/inspection report, undertaken by other agencies, describing the charity's activities.
- Correspondence, promotional material and agreements with other organisations with whom you work in order to deliver your aims.
- Other promotional literature.
- A copy of a recent newsletter.
- Any other relevant evidence that the pursuit of your aims may demonstrate the public benefit requirement.
These are suggestions only. Where this information is available online, please provide us with details of how these documents may be accessed.
Finally, if you would like us to return any documents to you, please let us know. In line with the Commission's policy for the retention of hard copy documents, we will retain these documents for five weeks from when we receive them, after which time they will be destroyed.
ANNEX B
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Data Protection Statement
Any information you give to us will be held securely and in accordance with the rules on data protection. We will treat personal details as private and confidential and safeguard them. We will not disclose them to anyone unconnected with the Charity Commission unless you have consented to their release, or in certain circumstances where;
- we are legally obliged to do so;
- disclosure is necessary for the proper discharge of our statutory functions; or
- disclosure is necessary to comply with our function as regulator of charities and is in the public interest.
We will ensure that any disclosure made for this purpose is proportionate, considers your right to privacy and is dealt with fairly and lawfully in accordance with the Data Protection Principles of the Data Protection Act.
The Data Protection Act 1998 regulates the use of 'personal data', which is essentially any information, whether kept in computer or paper files, about identifiable living individuals. As a 'data controller' under the Act, we must comply with its requirements.
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