Charity begins with public benefit - launch of public debate

Every charity must show it is for the public benefit, the Charity Commission announces today as it publishes a consultation on the priciples of public benefit.

The charity regulator is calling for views on draft guidance which paves the way for a new public benefit requirement for all charities, to come into force next year.

Under the 2006 Charities Act, for the first time all charities - including charities which advance education or religion, or relieve poverty - must show 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 and carrying out public benefit checks on charities.

Consultation on Draft Public Benefit Guidance explains the Commission's approach to public benefit, and sets out the four key principles of public benefit it has identified:

• There must be an identifiable benefit
• Benefit must be to the public, or a justifiable section of the public
• People on low incomes must be able to benefit
• Any private benefit must be incidental

The consultation sets out, with illustrative examples, what each of these principles means and how the Commission proposes to apply them when assessing charities' public benefit.

In addition to consulting on the principles of public benefit, the Commission is seeking to encourage a wider debate about the accountability of charities and the role of public expectations.  Alongside the consultation are published some Citizens' Standards on Public Benefit.  These are not a legal requirement for trustees but help demonstrate the public's expectations of charities.

Launching the consultation, the Commission's Chair, Dame Suzi Leather said,

"Charities can take many different forms and there is no one size fits all approach to public benefit. We believe that every charity shoudl be able to show a real benefit to the public - not just private interests - and that people on low incomes should be able to benefit. The best charities show continuous improvement and assess their performance against public expectations - we want to encourage the rest of the sector to follow their example.

"All charities should report what they do for public benefit. We think that those which charge high fees where the public benefit may not be obvious should assess and report the value of the benefit they provide alongside the valie the benefits they receive - including of course the tax breaks."

The consultation document is available on the Commission's website at www.charitycommission.gov.uk or can be ordered by telephone on 0845 300 0218. The consultation closes on 6 June 2007.