Random checks will feature in new public benefit regime

The Charity Commission will carry out random checks on charities to ensure they comply with the new public benefit requirements that will take effect from 1 April.

The measure is highlighted in the commission's final public benefit guidance, published today. "It is part of good regulatory practice," Dame Suzi Leather, chair of the Charity Commission, told Third Sector. "It keeps people on their toes."

The guidance says charities must comply with two main principles: they must provide an identifiable benefit or benefits, and the benefit must be to the public or a section of it.

The commission will assess charities on the basis of risk: organisations affected by changes in the law, such as the removal of the presumption of public benefit, are likely to be the first to be scrutinised.

Existing charities will be required to start reporting on public benefit in their trustees' annual reports at the end of the 2008/09 financial year. New applicants for charitable status already have to meet the commission's new standards.

Appeals by charity trustees against public benefit decisions will be considered by the commission's internal review procedures in the first instance, and will be referred, if necessary, to the Charity Tribunal, which will start operating in February.

Also...

Charitable status is worth only £225 per pupil per year to private schools, according to Jonathan Shepherd, chief executive of the Independent Schools Council.

"The financial benefits are minimal, especially since they still have to pay a huge amount in VAT," he told Third Sector. "Most prefer to be charitable because it fits in with what they want to do, which is benefit society."

Today's final Charity Commission guidance says that charities must justify charitable status by demonstrating public benefit - a challenge for those charging high fees. The new guidelines state that "people in poverty must not be excluded from the opportunity to benefit".

- Indira Das-Gupta

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