New January deadline for public benefit guidance

The Charity Commission's guidance on public benefit requirements will be published in January, three months behind the original schedule. The delays have been caused partly by a massive response to the commission's consultation on draft guidance earlier this year.

At the beginning of 2008 the regulator will also begin its three-month consultation on guidance for fee-charging charities and charities working in the fields of poverty, education and religion. Under the Charities Act 2006, these charities are no longer assumed to be charitable and must demonstrate they provide public benefit.

The results of the consultation, which will be staggered between July and December, will allow the charities affected to get more detailed advice on the implications of the public benefit test for their work. The public benefit provisions of the act will come into force in March 2008, with charities expected to start reporting on public benefit in their annual reports in 2009.

“We recognise that charities are keen to understand the timescale for the development of public benefit guidance, so we are publishing a revised timetable,” said Andrew Hind, chief executive of the Charity Commission. “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.”

Unlike the Charities and Trustee Investment (Scotland) Act 2005, the Charities Act does not define public benefit. It therefore falls upon the commission to interpret the law and disseminate that interpretation to charities through its guidance.

The end of the charitable assumption caused concern among many charities, particularly faith-based organisations and fee-paying charities, which feared they might no longer be deemed charitable. The commission has insisted, however, that it does not intend to strike charities off the register.

“Clearly, every charity is different," Hind said. "We will apply the 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.”

New charities will be required to demonstrate their public benefit during their registration processes, but the commission will apply a risk-based approach for existing charities by simply asking them to report on their public benefit credentials.

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