Public benefit: Revised guidance expected soon
The Public Benefit debate is set to continue as the Charity Commission have confirmed that its revised guidance on Public Benefit is to be released to the public this Summer.
The revised guidance is the long heralded result of the important ruling on 14 October 2011 of the Upper Tier Charities Tribunal, which concluded a protracted legal battle between the Commission and the Independent Schools Council (ISC) over the guidance on Public Benefit that the Commission released in 2008.
The ISC was concerned that the 2008 guidance placed far too much focus on the need for independent schools to make adequate provision for the poor (i.e. with bursaries) in order to retain their charitable status. They sought clarity from the Tribunal on the methods by which an independent school with charitable status could demonstrate that its charitable purposes were for the public benefit.
The “De Minimis” Test: What did the Tribunal Rule?
In what was claimed as victory for independent charitable schools by the ISC because it left trustees and not the Charity Commission to decide how best to run their charity, the Tribunal held that crucial parts of the Commission’s public benefit guidance in respect of the adequacy of provision for the poor were either wrong in law or ambiguous and confusing.
The key part of the ruling stated that in all cases of fee charging independent schools with charitable status, there must be a more than a de minimis – or token – benefit for poor students, but that it was for the trustees of a charitable independent school (and not the Charity Commission) to decide what was appropriate in their particular circumstances.
In other words, once the basic threshold of providing more than token benefits for the poor has been reached, you as trustees or governors are free to decide what a school can provide that will be for the public benefit, taking into account a school’s size, level of fees, location etc.
How to Comply: Public Benefit Ideas for Your School
The Charity Commission’s revised guidance should reflect the principles as set out in the Tribunal ruling. Based on that principle, the following list should provide a few examples of activities and services that educational charities could provide in order to comply with the public benefit requirements as they stand:-
- Offering bursaries, scholarship schemes or other types of assisted places;
- Providing online education via the internet;
- Providing after school clubs in specific subjects;
- Providing a school breakfast club for pupils;
- Visits to the theatre and other arts facilities;
- Putting on music and theatre performances free of charge for pupils of local schools;
- Providing personal mentoring and coaching schemes to students;
- Supporting a school overseas, including building or maintaining schools and supporting teacher training for schools overseas;
- Allowing pupils from local state schools to use educational facilities (including sports and concert facilities for example);
- Formalised ways of sharing knowledge, skills, expertise and experience with state schools, colleges or city academies, including the formal secondment of teaching staff;
- Engaging students in Community Action programmes that enable students to volunteer at local, underprivileged schools.
The release of the Charity Commission’s revised Public Benefit guidance is likely to raise further questions, and it will be interesting to see how closely it reflects the Upper Tribunal’s 2011 ruling. We would suggest that you keep an eye out for its release, and if you need any advice on its implications for your institution, please do not hesitate to give us a call.
This briefing is for guidance purposes only. RadcliffesLeBrasseur LLP accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.