Three out of the 12 charities selected for an initial round of tests by the Charity Commission are not providing sufficient public benefit to justify their charitable status, the commission announced today.
The three that failed include two fee-charging schools and one care home. The commission said it could not assess the public benefit provided by another care home because it appeared to be operating outside its objects.
The rulings on the schools prompted the Independent Schools Council to protest that the commission was focusing on the provision of means-tested bursaries and "downplaying" the significance of partnerships with local schools and communities.
David Lyscom, chief executive of the ISC, said the commission appeared to require schools to provide a significant but unspecified proportion of their turnover in full bursaries.
"This will inevitably lead to fee increases for the vast majority of parents, putting the benefits of an independent education beyond the reach of a greater number of children," he said.
St Anselm's School Trust, Highfield Priory School and Penylan House Jewish Retirement and Nursing Home were all judged by the commission to be spending too small a proportion of their incomes and reserves on ensuring that people who could not afford their fees had an opportunity to benefit.
Meanwhile, The Rest Convalescent Hotel in south Wales was deemed to be acting as a provider of holidays rather than, as its objects state, a convalescent home.
The 12 charities selected for the exercise - five schools, four religious charities and three fee-charging care homes - had to fill in a questionnaire and were visited by the commission during the assessment exercise. All of the religious charities were judged to be providing sufficient public benefit.
The commission said it hoped the assessments of these 12 ‘guinea pigs' would help other charities to see what factors to take into account when reporting on their own public benefit, which they are required to do by the Charities Act 2006. A document setting out the regulator's "emerging findings" has also been published today.
Dame Suzi Leather, chair of the commission, said: "The majority of the charities we've assessed are already providing public benefit in a variety of ways. The other charities are capable of doing so and remain registered, but they must now agree with us in the next 12 months the changes that are needed."
They are not permitted to appeal against the commission's rulings at this stage, but they will be able to appeal to the Charity Tribunal against any use by the commission of its regulatory powers. A commission spokeswoman said the regulator had not yet decided whether to stage a similar assessment exercise for other kinds of charities.
The eight charities to pass the public benefit assessment were: United Christian Broadcasters Limited (click here); London Sri Murugan Temple (click here); Tara Mahayana Buddhist Centre (click here); Church Mission Society (click here); Cornwall Old People's Housing Society; The Manchester Grammar School Foundation (click here); Manor House School Trust Ltd, which runs Moyles Court School (click here) and Pangbourne College (click here).
Stuart Etherington, chief executive of umbrella body the NCVO said: "We are extremely supportive of what the Charity Commission is trying to achieve with the publication of their first ever public benefit assessments.
"It makes total sense that charities should be asked how they demonstrate their worth and the good that they do in society. It is essential at all times and especially now that we maintain the high levels of confidence entrusted to us by the public."