View, January 2012


Page 11


What is the Public Benefit Test?


Jenny Ebbage (solicitor with Edwards and Company): “There has always been a presumption in law that the old four heads of charity, as they were known, were presumed to be for the public benefit, for example, a trust for the advancement of education, a trust for the relief of poverty, a trust for the advancement of religion and a trust for other purposes beneficial to the community; but there is an overriding principle of charity law that a charitable pur- pose must be provided for the benefit of the public and this was always the case. “In law, any charitable purpose such as the relief of


poverty or advancement of education must be provided for the benefit of the public. This principle is enshrined in char- ity law from case law. In the mid-2000s all the UK legisla- tion introduced public benefit as a statutory requirement requiring public benefit. “Each part of the UK did this in a different way. This can be better explained by considering the position elsewhere. In England and Wales any charitable purpose has to be a charitable purpose for public benefit – as that term public benefit is understood for the purpose of the law relating to charities there.


“This is determined from guidance issued by the commis- sion in England and Wales and case law. In Scotland there is a statutory ‘charity test’ which requires an assessment to be made of whether an organisation provides or intends to provide public benefit and it tests the consequences of its functions or activities. “In Northern Ireland the legislation is a hybrid and says it will test whether the charitable purpose is for the public benefit – but the test set out in section 3 of the Act does not do that – rather it tests the activities in a similar way to the Scottish Act. “It is believed that there is a mismatch; and the ‘hybrid’ public benefit test set out in the Northern Ireland legislation requires an amendment.”


‘Public need to have confidence about how money is being used’


MISSION drift and the added responsibilities put on voluntary trustees are among the issues con- sidered by Workforce Training Services – a charity in Belfast which provides training to marginalised young people – when the Charities Act became law.


Gerry McGrath, the general manager, said: “The positive aspect of the Charities Act is that it gives organisations the opportunity to show their bona fides, that they are working in a professional, credible and accountable way. “When you are talking about public money, peo- ple need to have confidence that the money is being used in an accountable and fair and reason- able manner. The Charity Commission has the ability to investigate and regulate and I would be reasonably confident that in terms of the sector as a whole most charities are well-run and fit for purpose. ‘Fit for purpose’ has to be sorted out by the public benefit test. “In terms of the public benefit test it should be


looked at in a legislative framework which sets the standard, it should be aspirational. “From our perspective, voluntary trustees and


Above: Solicitor Jenny Ebbage outside her firm’s offices in Hill Street, Belfast, and (inset) Frances McCandless, chief executive of the Charity Commission Main photograph: Kevin Cooper, Photoline


voluntary boards of management, by virtue of the Act, are going to be more accountable. We felt that was an issue – they needed to know the level of accountability that would be required of them. “We also identified a tendency within the organ- isation for ‘mission drift’. As an organisation we were set up to help young people in greater west Belfast and when we looked at what we were doing, we were helping young people from all areas of Belfast, and indeed as far away as Car- rickfergus. “We had to change our memorandum and articles of association and had to get permis- sion from the Department of Employment and Learning,” said Mr McGrath. “It gave us an opportunity to review the work


we were doing, to redefine who we are and how we wished to do go forward.”


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