Public benefit: The prevention and relief of poverty

Phil Watts, a senior manager in the charities team at Anthony Collins Solicitors, explains the principles

The prevention and relief of poverty appears to be the least controversial of the four cause areas dealt with by the Charity Commission's finalised public benefit guidance, published last December. The consultation on the draft document elicited only 58 responses - far fewer than the other areas.

The guidance recognises that there is no absolute definition of poverty: people in poverty in a developing country might have very different needs from those in the UK. It also acknowledges that poverty can be addressed in many ways other than direct financial assistance, such as by addressing underlying social conditions, poor health or lack of educational opportunities.

It is now specifically recognised that financial hardship need not be the same as poverty. The accepted distinction seems to be that financial hardship might be temporary, as a result of particular circumstances, whereas poverty is a longer-term condition.

The commission also accepts that it is often difficult to distinguish between the prevention and relief of poverty and takes the view that, generally speaking, one includes the other. Consequently, a charity whose objects refer only to the relief of poverty does not need to amend them if it wants to take steps to prevent poverty.

Historically, charities that relieve poverty have been accepted even if their beneficiary groups are very small: for example, trusts that exist to relieve poverty among the members of a particular family, the employees of a particular employer or the members of a particular club or society. It does not dismiss existing case law, but the new supplementary guidance suggests that such small groups of beneficiaries might not be accepted as charitable in the future. The commission has indicated that it will issue separate guidance in due course on how single employer and occupational benevolent funds can meet the public benefit test.

 

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