Public benefit and fee charging

Rachel Holmes, a solicitor in the charities team at Farrer & Co, looks at the issues

In December, the Charity Commission published its final public benefit guidance on charities and fee charging. Although the guidance is easier to read than the consultation document and goes into more detail on some points, in substance it has not changed much.

The guidance says a charity that charges for any of its charitable services must ensure the benefits it offers are available to all: from those who can afford the fees to the very poorest.

Common sense principles apply: the higher the fees, the more likely they are to exclude some people from the opportunity to benefit from the service. If fees are charged only for a small part of the charity's activities, the opportunity to benefit is unlikely to be deemed unduly restricted. But if high fees are charged for the charity's main or only activity, the commission might well conclude that the poor are being excluded from the opportunity to benefit. If this is so, the trustees will need to put mechanisms in place to widen access - by offering free or subsidised access to the service for which fees are charged, or by offering alternative, free services to further their charitable purposes. Or they can do both.

The guidance offers suggestions about how trustees of different fee-charging charities can widen access, and emphasises that any alternative benefits offered must be more than token. But it also says the commission will take a charity's resources and circumstances into account when assessing if it is doing enough.

The guidance is not law, and a number of charity law experts have questioned whether all aspects of it have a sound legal basis. That said, trustees of all charities that charge fees have a statutory duty to consider the guidance when carrying out relevant functions; so if your charity charges fees (or plans to charge fees), you must be familiar with it and be prepared to justify any departure from it.

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