A wider definition of charity?

Publishing local newspapers might be just the first of many new charitable activities

Lord Phillips
Lord Phillips

Last month, Lord Phillips, the founder of law firm Bates, Wells & Braithwaite, revealed he has been negotiating for almost two years for the publication of a local newspaper to be allowed as a charitable activity - and he believes the Charity Commission has been persuaded.

Phillips argues that such a newspaper would exist specifically for "the advancement of citizenship or community development", which is recognised by the commission as a charitable purpose.

The commission referred the matter to its board for a decision. In a statement, it says: "It is the commission's view that the production of a community newspaper may be capable of being recognised as a charitable purpose.

"While the provision of news is not a charitable purpose in itself, in principle a community newspaper could further a charitable purpose through the advancement of citizenship, arts and culture, and recreational facilities."

The episode has demonstrated the difficulty of creating a charity in a new sphere. Phillips likens his negotiation with the commission on the subject to "rolling water uphill", and says that any practical attempt to start a newspaper as a charity will require further months of negotiation. However, he is "utterly confident" that it will eventually happen.

Jonathan Burchfield, a partner in the charity law division at Stone King, says that his firm is currently in negotiations with the Charity Commission on a similar case, which, if successful, might expand charity into a new sphere.

"We're in the early stages of discussions," he says. "I'm impressed by the work Bates Wells & Braithwaite has already done on charitable newspapers."

Burchfield believes that more charitable organisations will spring up in new fields previously dominated by for-profit providers.

"We've seen this recently with charities becoming involved in running prisons," he says. "There was also a Canadian example concerning the provision of internet services. I'm absolutely sure we'll see charities operating in more areas than they do at the moment."

He says argument by analogy can be used to expand the scope of charity. "For hundreds of years it's been accepted that providing a 'public amenity or public utility' is charitable," he says.

"The most famous example is the provision of a reading room. You could use that argument to suggest that providing a newspaper is also offering a public amenity."

Jonathan Brinsden, a partner at Bircham Dyson Bell, says that he also thinks the scope of charity will expand even further.

"In theory, a law firm could be run as a charity," he says. "So could lots of other service industries. Utility companies could potentially have a charitable purpose.

"In every case, you would have to look at the beneficiary class. And you would look at the closest organisation to your own, which is currently a charity, and argue by analogy to that."

He says that as the activities carried out on a not-for-profit basis increase, they will increasingly fall into a grey area where an organisation has a clear social purpose but does not fit the exact definition of charity.

"Maybe there's room to grow the provision for organisations that fall in this grey area," he says. "There is currently the community interest company, but this gets a lot of the disadvantages of charities but few of the benefits."

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