Is your charity meeting its public benefit reporting requirement? Read our top five tips for achieving compliance

21 September, 2017

Providing a public benefit is at the heart of what it means to be a charity. Public benefit is about knowing what a charity’s purposes are, how those purposes are beneficial to the public and how the charity’s trustees will carry out those purposes for the benefit of the public.

 

Charity trustees have a legal responsibility to ‘have regard’ to guidance published by the Charity Commission (“the Commission”) on public benefit. Trustees of registered charities must state in their annual trustees’ report on how they have carried out their charity’s purposes for the public benefit.  

 

The public benefit reporting requirements are more stringent for trustees of larger registered charities with a gross income exceeding £500,000. However, trustees of smaller registered charities are also legally obliged to report on their charity’s public benefit.

 

In April this year, the Commission published the findings of its regular work to scrutinise charity accounts. The Commission analysed a random sample of 107 charity accounts and found that 58 of the charities (54%) reviewed did not meet the public benefit reporting requirement. Of the charities that did not meet the requirement, 13 did not describe the difference that their charity has made and 21 did not include a statement confirming that they had read the Commission’s guidance and complied with the public benefit requirements. 24 charities failed to do either of the above.

 

Complying with the public benefit reporting requirement is not difficult. Public benefit can be addressed throughout the trustees’ annual report rather than including a specific section. Our top five tips for achieving compliance are:

 

  1. Read the Commission’s public benefit guidance and have regard to it when making decisions and exercising any powers or duties to which the guidance is relevant. The Commission’s guidance is available online at: https://www.gov.uk/government/collections/charitable-purposes-and-public-benefit

 

  1. Include a statement in the trustees’ annual report confirming that the trustees have had due regard to the Commission’s guidance at all relevant times.

 

  1. Explain what your charity’s purposes are. This means explaining what the charity is there to achieve and its objectives.

 

  1. Explain how those purposes benefit the public, or a sufficient section of the public.

 

  1. Explain how those purposes have been achieved, for example explaining what action has been taken during the year to carry out those purposes. It is useful to include specific examples of activities undertaken and what they achieved.

 

If you would like advice on complying with the public benefit reporting requirement for your charity, please do get in contact.