Charity Commission Public Benefit Consultation – what next for charity trustees?

Charity Commission Public Benefit Consultation – what next for charity trustees?

The Charity Commission’s Consultation on its draft Public Benefit guidance closed on 26 September.

The timing for the re draft was triggered by the ISC case of course. But the requirement for the Charity Commission to provide guidance ‘in pursuance of its public benefit objective’ is to be found in section 17 (1) of the Charities Act 2011. That public benefit objective, set out in section 14 of the 2011 Charities Act, is ‘to promote awareness and understanding of the operation of the public benefit requirement.’ (The public benefit requirement, just to complete the picture, being ‘the requirement in section 2 (1) (b) that a purpose falling within section 3 (1) must be for the public benefit if it is to be a charitable purpose ‘– section 4 (1) of the Charities Act 2011).

  

The draft public benefit guidance reflected the Charity Commission’s view, that that statutory objective means that any guidance it produces needs to deal with the duty of charity trustees to administer their charity for public benefit, just as much as it needs to deal with public benefit as part and parcel of a charitable purpose.

   

There will, no doubt, be different views about the Charity Commission’s approach. Some will take the view that the Charity Commission has gone too far: that its guidance should just deal with public benefit as it applies to consideration of charitable purposes. Others will be more comfortable with the approach set out in the draft guidance on public benefit.

The NCVO for instance, has made known their position expressed during the consultation, cautioning against a ‘light touch’ approach to regulating the public benefit requirement, in terms of the duties of charity trustees to run their charity for public benefit.

The Charity Commission has said that it hopes to issue the guidance in its final form later this year or early next. It will be interesting to see what changes are made to the draft public benefit guidance. Given the analysis of the law relating to public benefit produced by the Charity Commission which accompanied the draft guidance, it is perhaps unlikely that there will be a shift away from its current approach to guidance on the public benefit requirement.

Whatever changes might appear to the draft public benefit guidance in due course, charity trustees will still be required by those regulations made under section 162 of the 2011 Charities Act to report annually on public benefit. Complying with the Charities (Accounts and Reports) Regulations 2008 will require charity trustees to describe how they have carried out their charity’s purposes for public benefit. The reality for charity trustees is that, no matter what the final form of the public benefit guidance looks like, on a practical level they will need to continue to be able to demonstrate, each year, just who benefits from the work of their charity and how.