Benevolent funds face benefit test

The possibility that charitable benevolent funds could fail the Charity Commission's forthcoming test on public benefit because they do not reach a sufficiently large section of the public was raised at the Association of Charity Officers' annual conference last week.

Among those affected could be the commission's own benevolent fund - the Charity Commission Office Benevolent Fund - which provides grants and loans to staff and their dependants.

Charities that limit their beneficiary groups to people linked by common employers are no longer covered by the presumption that the relief of poverty is of public benefit, which was removed by the Charities Act 2006.

The commission's guidance on the public benefit organisations will have to provide to justify charitable status has been the subject of consultation and will be issued in final form next month.

"They might be making a rod for their own back," said Ian Davis, a partner at law firm Trowers and Hamlins. "But we don't know the exact details of their beneficiary group, and it could be larger than at first glance."

Sarah Atkinson, head of corporate affairs at the commission, said the commission's own fund would not be granted special treatment. "Like any charity, it is going to have to show it is of public benefit," she said.

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