Charity Commission
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Commission updates timetable for public benefit guidance for charities
The charity regulator has published a revised and updated timetable for the development of its advice and guidance for charities on public benefit. This follows consultation earlier this year on draft guidance on the principles of public benefit and the operation of the public benefit requirement. The consultation, which closed in June, received over 900 responses from charities, professional advisers and members of the public.
Key dates for the development of the public benefit requirement include:
January 2008 General public benefit guidance for all charities published January-February 2008 Start of three month consultations on draft supplementary guidance on public benefit for - Charities for the prevention and relief of poverty - Charities for the advancement of education - Charities for the advancement of religion - Fee-charging charities Late March 2008 Expected date on which the public benefit provisions in the Charities Act 2006 come into force (sections 1, 2, 3 and 5) July-December 2008 Supplementary guidance on public benefit published Late March 2009 Charities will begin reporting on public benefit as part of their annual reports to the Commission from this date
Under the 2006 Charities Act, all charities - including charities which advance education or religion, or to prevent or relieve poverty - must be able to demonstrate that they are established for the public benefit. The Act gives the Commission, as the independent regulator, responsibility for raising awareness about the public benefit requirement. However, the Act does not contain any new definition of public benefit. The Commission is responsible for interpreting the law through its guidance, which is intended to help charities understand their responsibilities under the Act.
Once the public benefit provisions in the Act come into force, charity trustees will have a duty to consider the Commission's guidance on public benefit and whether their charity meets the public benefit requirement. Supplementary guidance exploring in more depth the public benefit of charities advancing education or religion, or preventing or relieving poverty and charities which charge fees will be published. The Commission will assess organisations applying to be registered charities to see whether they meet the public benefit requirement, and will take a risk-based approach to assessing the public benefit of existing charities, which also have a new duty to report on their public benefit.
Andrew Hind, Chief Executive of the Charity Commission, said
"We recognise charities are keen to understand the timescale for the development of public benefit guidance, and so we are publishing a revised timetable. Nearly a thousand organisations and individuals responded to our consultation and their detailed responses deserve considered thinking - so we will now be publishing our revised guidance for all charities on the principles of public benefit in early January.
"We will continue to engage charities and other stakeholders as we finalise our public benefit guidance, to help charities understand what public benefit means in the context of their work. Clearly every charity is different, and we will apply these general principles to each charity in an appropriate way. The public benefit requirement is not something any charity should fear - on the contrary it is an opportunity for charities to articulate even more clearly the value they bring."
The revised timetable, a summary of responses to the draft guidance on the principles of public benefit, and other information about public benefit and the Charities Act 2006 is available on the Commission's website at http://www.charitycommission.gov.uk
Notes to Editors:
1. The Charity Commission is the independent regulator for charitable activity in England and Wales. See http://www.charitycommission.gov.uk for further information or call our contact centre on 0845 300 0218.
2. The Charities Act 2006 (which received Royal Assent in November 2006) gives the Charity Commission a new objective, "to promote awareness and understanding of the operation of the public benefit requirement".
3. Previously, charities which were established to advance education or religion or those relieving poverty were presumed to have purposes which benefit the public, and didn't have to demonstrate this further. The Charities Act 2006 removed this presumption and all charities now have to demonstrate that their purposes meet the public benefit requirement.
4. The Charity Commission published Consultation on Draft Public Benefit Guidance on 6 March 2007, and the consultation closed on 6 June. The Commission has published a summary of responses received on its website. Individual consultation responses are available on request, unless the respondent has asked for their submission to be kept confidential.
5. Proposals for the reporting of public benefit are contained in the draft Charities (Accounts and Reports) Regulations 2007, which were published for consultation between 14 June and 14 September 2007. The proposals in the draft 2007 Regulations include different requirements for smaller charities. The trustees of charities with an annual income of £500,000 or less would be required to give a brief summary of how the charity's purposes have been carried out for the public benefit during the year. Larger charities, above the audit threshold, would be required to provide a more detailed account of how the charity's purposes have been carried out for the public benefit during the year. Assuming a twelve month annual reporting period, the first charities to include public benefit in their accounts and annual report will be those reporting in April 2009.
6. The Office of the Third Sector in the Cabinet Office has published a timetable for the implementation of the Charities Act, along with a plain English guide to the Charities Act and other information, produced with the Charity Commission, on its website at http://www.cabinetoffice.gov .uk/third_sector
7. The Commission has set out an indicative programme for its broad approach to public benefit on its website at http://www.chari tycommission.gov.uk/news/pbnewsindex.asp . These dates will be reviewed as the work progresses and may vary, for example depending on the volume and nature of responses to further consultations.
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