Breaking a promise – does the public benefit?

leaving the Charity Commission and NCVO respectively, and having been submerged
by the public benefit debate over the past few years, it’s been a pleasant
change not to have it at the forefront of our thinking. In fact, we’d made ourselves a promise
not to mention it. 

know that, for most charities, demonstrating public benefit is just something
they do and it’s pretty much second nature for them. The furore stoked up by the Independent Schools Council’s
referral to the Tribunal has pretty much passed these charities by. They’ve simply been getting on with
their day job.

now the dust is beginning to settle on the public benefit judgement, and some
wider issues are emerging. First,
the judgement itself is bound to lead to further challenges. For all those commentators who have
claimed it as a ‘victory’ for the independent schools, there will be lawyers
offering pro-bono advice to the parents of school children at state schools to
challenge whether their local prep or independent school is providing more than
a ‘tokenistic’ public benefit to those unable to afford the fees. Expect the Commission to be kept busy
on that front. Expect the person
appointed to carry out the review of the 2006 Charities Act to be lobbied hard
as well. Expect some headaches for

leaving that political hot potato aside, a broader notion of public benefit is
becoming more
common currency. For example, in
recent days the Health Minister Earl Howe has said he is considering
amending the NHS Bill to require Foundation Trusts to publish details of how
their non-NHS earnings benefit NHS patients. (And NHS Foundation Trusts are already described as public benefit
corporations.) ‘Public benefit’ also
helped the university tuition fees legislation, with universities charging more
than £6,000 now required to undertake measures to encourage students
from poorer backgrounds to apply. 

at a time when companies are polishing their social responsibility credentials and
social enterprises are fashionable, charities should proclaim their public
benefit more than ever. After all,
public benefit is what makes charities special; it is why they deserve the
support they get, from the public and the state. Tax relief to charities in the
form of Gift Aid, rate relief, VAT and stamp duty relief was worth £2.56bn to
the sector in 2010/11. There’s a lot
of public benefit in that.

Belinda Pratten, formerly head of policy at NCVO, and Rosie Chapman, formerly director of policy and effectiveness at the Charity
Commission, are independent charity advisors
and co-founders of Belinda Pratten and Rosie Chapman Associates