(February 2008)
Contents
Foreword
Dear Reader,
All charities must have charitable purposes or ‘aims’ that are for the public benefit. This is known as ‘the public benefit requirement’. Although all charities already have to meet this requirement, the Charities Act 2006 highlights it by explicitly including public benefit in the definition of a charitable purpose. All organisations wishing to be recognised as charities in England and Wales must now demonstrate, clearly, that their aims are for the public benefit. Previously the law presumed this to be the case for charities that advance education or religion or relieve poverty.
Recently, the Charity Commission published Charities and Public Benefit, our general guidance for all charities on public benefit. That guidance explains what public benefit means and what charity trustees should consider in order to show that their charity’s aims are for the public benefit.
That guidance applies to all charities including those that are concerned with preventing or relieving poverty. However, because, for those charities, the law has changed we have prepared draft supplementary guidance to help charities for the prevention or relief of poverty to better understand how the principles of public benefit set out in Charities and Public Benefit apply specifically to them.
We found the response to our public consultation on Charities and Public Benefit very helpful. We hope that this further consultation will give charities operating in this area the opportunity to comment on this draft supplementary guidance tailored to their particular needs, and thereby to help us produce guidance that is as clear and as helpful as possible.
We invite and encourage everyone with an interest in this area to let us have their views.
Dame Suzi Leather Chair
Andrew Hind Chief Executive
About the consultation on draft supplementary guidance on Public Benefit and the Prevention or Relief of Poverty
1.1 The purpose of this consultation
This draft supplementary guidance explains how the principles of public benefit set out in Charities and Public Benefit apply specifically to charities for the prevention or relief of poverty.
We recognise that many charities concerned with preventing or relieving poverty will also be involved in the promotion of social inclusion. We have therefore taken the opportunity to issue alongside this consultation document, draft guidance for charities which are involved with the Promotion of Social Inclusion. We would be very interested to receive answers to the consultation questions contained in that draft guidance in particular from charities that are working, or wish to work, in this area, together with any other comments they wish to make.
It is important to note that this is draft supplementary guidance. We recognise that it requires further development and refinement. We wish to use this consultation as an opportunity to elicit more examples to illustrate points that are made in it, to explore different views and approaches where questions are raised and to consider where there might be gaps or omissions where further guidance would be helpful. This draft supplementary guidance may raise questions as well as provide answers, but we hope that the consultation process will ultimately result in more meaningful and helpful supplementary guidance.
1.2 Why this consultation is important for charity trustees
All trustees are required by law to have regard to our statutory guidance on public benefit, contained in Charities and Public Benefit. This consultation concerns our draft supplementary guidance on Public Benefit and the Prevention or Relief of Poverty, which explains in more detail how the principles of public benefit set out in Charities and Public Benefit apply to charities concerned with the prevention or relief of poverty. It also explains what the prevention or relief of poverty, as a charitable aim, means. Trustees of charities for the prevention or relief of poverty will be required by law to have regard to sections on public benefit in this supplementary guidance when it is published in its final form.
The principles of public benefit set out in Charities and Public Benefit are the general principles upon which we will assess the public benefit of all charities. We are not expecting large numbers of poverty charities to be unable to meet the public benefit requirement, but neither can there be any guarantees that every poverty charity currently on the register will be able to show that it meets that requirement. Where a charity has difficulty meeting the public benefit requirement we will work with its trustees to help them refocus or reconstruct the charity so it can meet the requirement where that is possible.
The public benefit requirement is not a new requirement for charities. The change is that organisations that prevent or relieve poverty used to benefit from a presumption in law that they did so for the public benefit. However, this presumption has been removed and the trustees of some charities for the prevention or relief of poverty, who might not have thought about their charity’s public benefit, will need to start thinking about this now. We would like to know if charity trustees find our draft supplementary guidance helps them to think about whether their charity meets the public benefit requirement.
1.3 Consultation with specific types of charity
This consultation on draft supplementary guidance on Public Benefit and the Prevention or Relief of Poverty is just one of a series of sub-sector consultations we are carrying out on the effect of the principles of public benefit for specific types of charity.
Other sub-sector consultations include:
- Public Benefit and the Advancement of Education
- Public Benefit and the Advancement of Religion
- Public Benefit and Fee-charging
It is important to stress that, once our supplementary guidance has been published, we will be carrying out a great deal of discussion and consultation about how it is expected that particular types of charity meet the public benefit requirement. No charity will be expected to make changes overnight. We will take reasonable account of how much time and resources might be needed by a charity in its particular circumstances to make any necessary changes in order to meet the public benefit requirement. Similarly, we will not take any regulatory action without having first discussed the matter with the trustees and, where appropriate, their advisers other than in exceptional cases.
We are keen to receive feedback from charities concerned with the areas listed above and will be actively engaging with charities in those sectors as part of those sub-sector consultations.
We will also discuss the issue of public benefit with charities that form part of a particular charity sub-sector, with representative professional and umbrella bodies and with users and potential users of those charities’ services.
1.4 How we will make decisions concerning the public benefit of charities for the prevention or relief of poverty pending the publication of supplementary guidance for those charities
Our decisions on the public benefit of charities for the prevention or relief of poverty will be based upon the principles of public benefit set out in Charities and Public Benefit.
Our draft supplementary guidance on Public Benefit and the Prevention or Relief of Poverty does not introduce any new, or special, principles of public benefit for those charities. It is intended only to give a more detailed explanation of how the general principles of public benefit apply specifically to charities for the prevention or relief of poverty. However, the feedback we receive during our consultations on the public benefit of specific charity sub-sectors will help inform our approach to public benefit as will any decisions taken by the new Charity Tribunal or the courts on public benefit.
1.5 Timetable for our public benefit consultations
The following table sets out an indicative programme for the Commission’s broad approach to public benefit. It includes tentative dates for each stage of the work. These dates will be reviewed as the work progresses and might vary depending, for example, on the volume or nature of the response to the consultations.
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16 January 2008
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Commission publishes general public benefit guidance – Charities and Public Benefit
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29 February 2008
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Start of four month consultations on draft supplementary guidance on:
- Public Benefit and the Prevention or Relief of Poverty
- Public Benefit and the Advancement of Religion
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12 March 2008
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Start of four month consultations on draft supplementary guidance on:
- Public Benefit and the Advancement of Education
- Public Benefit and Fee-charging
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Late March 2008
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Expected date on which the public benefit provisions in the Charities Act 2006 come into force (sections 1, 2, 3 and 5)
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30 June 2008
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End of four month consultations on draft supplementary guidance on:
- Public Benefit and the Prevention or Relief of Poverty
- Public Benefit and the Advancement of Religion
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11 July 2008
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End of four month consultations on draft supplementary guidance on:
- Public Benefit and the Advancement of Education
- Public Benefit and Fee-charging
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By end 2008
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Supplementary guidance on public benefit published
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Late March 2009
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From this date, charity trustees will begin reporting on public benefit as part of their Trustees’ Annual Report
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1.6 How, where and when to send comments on this consultation
Everyone is welcome to respond to this consultation and we would be grateful for all responses in writing, which should be headed ‘Consultation on Draft Supplementary Guidance on Public Benefit and the Prevention or Relief of Poverty’ and sent by post to:
Charity Commission Direct
PO Box 1227
LIVERPOOL
L69 3UG
or by e-mail.
Please state clearly which consultation you are responding to and provide us with the following standard information, in the order requested, as part of the introduction to your response. This will allow us to manage the responses and use the information more effectively as well as enabling us to keep you up to date with any progress:
1. Organisation/Charity name (if applicable)
2. Charity number (if applicable)
3. Contact name
4. Position within organisation (if applicable)
5. Contact number
6. Contact address
7. Contact e-mail
8. Confidentiality Statement (if applicable - see following sections)
9. Consultation response/answers to consultation questions
The closing date for responses regarding the Consultation on Draft Supplementary Guidance on Public Benefit and the Prevention or Relief of Poverty is 30 June 2008.
Where appropriate we encourage you to provide evidence in support of your response. If you are a representative group, such as a CVS, please provide a summary of the people and organisations you represent as part of your response. If you represent a charity it would be helpful if you could state your organisation’s charitable aims. And finally we would be particularly keen to hear from charities that represent minority groups such as people with disabilities, elderly people or minority ethnic groups.
1.7 How we will treat the information provided
All information contained within the responses (including personal information) may be published or disclosed in accordance with the access to information regimes, primarily set out in the Freedom of Information Act 2000, the Data Protection Act 1998 and the Environmental Information Regulations 2004.
If you want information given in response to the consultation to be kept confidential it will only be possible to do so if it is consistent with our legal obligations. There is a statutory Code of Practice under the Freedom of Information Act 2000 which public authorities must comply with. This sets out how confidential information must be dealt with. We cannot give assurances that all information will be kept confidential but we will take into account any representations made by you.
If you object to any of the information (including your personal details) which you are giving in response to the consultation being published, please say so. It would be helpful for any such objections to be supported with an explanation of why you regard the information to be confidential so that a decision can be made as to whether there are grounds for not publishing such information.
1.8 What will happen at the end of the consultation period?
All responses will be recorded and used by the Charity Commission to inform any amendment and further work that we do relating to charities and public benefit.
We will review our draft supplementary guidance, Public Benefit and the Prevention or Relief of Poverty, taking into account the comments that we have received by the end of the consultation period. We will then aim to publish a summary of the responses to this consultation on our website and issue our supplementary guidance Public Benefit and the Prevention or Relief of Poverty by the end of 2008.
1.9 Further information
If you have any further queries about this consultation please contact:
Patrick Smidmore
Charity Commission Direct
PO Box 1227
LIVERPOOL
L69 3UG
Or email us.
1.10 Monitoring responses to this consultation
We are keen to take account of the opinion of everyone who can help us develop our policy and guidance.
We want to ensure that we are reaching as diverse and representative a group of charities as we can. We are taking steps to make sure that everyone who wants to do so has the opportunity to contribute to our consultations.
To help us monitor the responses to this consultation will you please complete and return the monitoring form which is available on our website.
It is not compulsory to complete this form but, if you do respond, we will ensure that it is detached from your consultation response on receipt and that the information remains confidential. Alternatively you can send this form separately to:
Customer Services Manager
Charity Commission Direct
PO Box 1227
LIVERPOOL
L69 3UG
1.11 Consultees
A copy of this consultation document has been sent to a number of key sector umbrella bodies and other organisations and individuals who have expressed an interest in the subject. If you think there are particular interested parties who should be consulted, please let us know.
1.12 Cabinet Office Code of Practice on Consultation
This consultation has been designed to comply with the six consultation criteria in the Cabinet Office Code of Practice on Consultation:
1. Consult widely throughout the process, allowing a minimum of 12 weeks for written consultation at least once during the development of the policy.
2. Be clear about what your proposals are, who may be affected, what questions are being asked and the timescale for responses.
3. Ensure that your consultation is clear, concise and widely accessible.
4. Give feedback regarding the responses received and how the consultation process influenced the policy.
5. Monitor your department’s effectiveness at consultation, including through the use of a designated consultation co-ordinator.
6. Ensure your consultation follows better regulation best practice, including carrying out an Impact Assessment if appropriate.
Respondents are invited to comment on the extent to which the criteria have been adhered to and to suggest ways of further improving the consultation process. If respondents have comments or complaints about the consultation process they should contact:
Sue Smith
Charity Commission Direct
PO Box 1227
LIVERPOOL
L69 3UG
Telephone: 0845 300 0218