Broad definition for poverty

Final public benefit guidance offers wide interpretation of 'prevention and relief of poverty'

Providing free or low-cost internet access to people in areas of social deprivation would qualify as a public benefit for a charity whose aims were the prevention or relief of poverty.

This example, given in the final guidance on the public benefit delivered by such charities, illustrates how broadly the commission has decided to interpret the concept of ‘prevention and relief of poverty'.

"The guidance now acknowledges, upfront, the breadth of the meaning of poverty, in both an international and domestic context, and its interdependence on social and economic conditions," says the commission in its summary of responses to its recent consultation on the subject.

"It also acknowledges the broad range of activities charities working for the prevention or relief of poverty, particularly charities working internationally, can undertake, ranging from direct financial assistance to wide-ranging projects tackling root causes of poverty."

The guidance says connections of family, employer, profession and membership of a club or society have been held to be a sufficient section of the public to benefit from a charity that is working for the relief of poverty.

But it warns that not every restriction on who can benefit will now be acceptable: "There may be circumstances in which the restrictions are either so limited or irrational as to outweigh the normal public character of the relief of poverty."

It says separate guidance will be produced for benevolent funds, and the summary of responses says: " We accept that there are important differences between occupational benevolent funds and single employer benevolent funds."

The guidance says a definition of poverty might typically apply to someone on less than 60 per cent of median income who goes short in some unacceptable way. It says the prevention or relief of poverty is not just about financial assistance to people who lack money: "Poverty is a more complex issue that is dependent upon the social and economic circumstances in which it arises."

It goes on: "We recognise that poverty and financial hardship can be, but are not necessarily, the same. Not everyone in financial hardship is necessarily poor, but it may still be charitable to relieve their financial hardship.

"For example, an elderly person who owns their own house might be ‘asset rich', but have insufficient income to meet the cost of a heating bill during the winter and so might experience temporary financial hardship."

The guidance says it would be unhelpful to draw a distinction between the prevention and relief of poverty: "They are just different points along a continuum of financial need."

The relief of financial disadvantage is not a charitable aim, the guidance says, but people in poverty might be socially as well as financially disadvantaged and it is reasonable for poverty charities to address social disadvantage as well.

It says prevention and relief of poverty offers considerable opportunities for campaigning and political activity: "Indeed, there are some who argue that preventing poverty is inherently a political purpose. We are not persuaded by this. The notion that poverty is caused, or perpetuated, solely by government policy is contentious."

It adds: "There may be situations where carrying out political activity is the best way for trustees to support the charity's prevention or relief of poverty aims. The key issue for trustees is to ensure that this activity is not, and does not become, the reason for the charity's existence."

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