Charity Law Newsflash E-Bulletin

Reporting Public Benefit

For charities whose financial year ends on or after 31 March 2009, the trustees must report on public benefit in their next annual report.

With the Charities Act 2006, the law changed and the requirement to demonstrate that the aims, objects and activities of a charity are designed to and deliver benefit to the public were introduced. The content of forthcoming annual reports will be substantially different for some charities.

The Charity Commission has produced comprehensive guidance to assist charities. It explains how public benefit is based on two main principles and their sub-principles:

1. There must be clear identifiable benefits which must be related to the charity’s aims and balanced against any detriment or harm.

2. The benefit must be to the public or a section of the public. Beneficiaries must be appropriate to the charitable aims, the opportunities to benefit must not be unreasonably restricted, persons in poverty must not be excluded from benefitting and any private benefit must be incidental.

The annual report must describe how the aims of the charity are designed to deliver the type of public benefit that meets these principles and how the charity’s activities actually deliver such benefits. There are particular issues to be wary of, especially for charities with a narrow class of beneficiaries and for those who charge fees for the provision of goods and services.

For more information please contact Alexander Hall on 0845 55 55 321.

CIO UPDATE

The government plan to introduce the new Charitable Incorporated Organisation status is proceeding following the closure of the public consultation on 10 December 2008.

Charitable companies are set to benefit from CIO status by reduced bureaucracy and less onerous accounting and reporting requirements as they will no longer be answerable to both Companies House and the Charity Commission.

Furthermore, the trustees of unincorporated charities will have the opportunity to obtain the protection and security of limited liability without the bureaucracy connected with a company.

The legislative framework, the details and expected costs of the conversion process are yet to be finalised but are expected later this year, so watch this space!

For more information contact John Morgan on 0845 55 55 321.

For any further information about charity law services from mfg, please do not hesitate to contact John Morgan on 0121 550 0777 or john.morgan@mfgsolicitors.com