The Charity Commission has now published its statutory guidance on public benefit (“the Guidance”). Independent schools have been at the heart of the debate about public benefit with press headlines suggesting that the Charity Commission is to ‘crack down’ on independent schools with bank accounts being frozen, buildings being seized and governors removed. The opposite, and more realistic view, being taken by the Charity Commission is that most independent schools will be capable of providing sufficient public benefit and that there will be a very small number of cases that require the Charity Commission to take ‘action’. Any action is most likely to be in the form of a dialogue about what steps could be taken by a particular school to increase the amount of public benefit provided.

The Guidance states that there are two key principles both of which must be met in order show that an organisation’s aims are for the public benefit:

		There must be an identifiable benefit
		The benefit must be to the public, or a section of the public.

Whilst the Guidance runs to 40 pages there are a couple of key points that are of particular relevance to independent Schools.

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The benefit must be related to the aims of the charity

This means, for example, that a school with charitable objects to advance education by running a XYZ school could not satisfy the public benefit test by letting out its hall to a community music or sports team; it would have to provide sufficient public benefit in how it runs XYZ school. Also if there is more than one charitable aim then all aims must be for the public benefit. Therefore a charity that has running a school as one aim alongside other charitable aims of promoting community cohesion for example, would have to provide sufficient public benefit in the way in which it pursued both objectives. This means that independent schools are going to have to provide sufficient public benefit in the way in which they advance education, irrespective of other charitable activities that they might be involved in.

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People in poverty must not be excluded from the opportunity to benefit

A part of this principle is the requirement that the benefit must not be overly restrictive and in particular not exclude people in poverty from the opportunity of benefiting. The Guidance makes clear that “the fact that charitable facilities/services will be charged for, and will be provided mainly to people who can afford to pay the charges, does not necessarily mean that the organisation does not have aims that are for the public benefit; however an organisation that excluded people from the opportunity to benefit because of their inability to pay any fees charged would not have aims that are for the public benefit.”

The guidance does not provide any surprises in this respect, stating that the benefit must be more than ‘token’ and giving examples about collaboration and partnerships with state schools. Linked in with this requirement is a clear rule that in all cases “people in poverty must not be excluded from the opportunity to benefit”. The Guidance has been watered down from the draft guidance which specifically stated that “poverty” meant those on 60% of the average national income. The Guidance now recites the OED definition of “poor” which frees the Charity Commission from a strict test of 60% of average income (although this is stated in an example given) and allows more scope for considering the particular circumstances of an independent school. Importantly, the requirement is for there to be the “opportunity” for those in poverty to benefit and so an independent school could not be held to be failing merely because there were no “poor” benefiting from its educational work, provided there were opportunities for such benefit.

The Charity Commission are due to publish sub-sector guidance on fee charging charities and charities advancing education for consultation within the next month.