Charity Registration and the Public Benefit Statutory Guidance: Briefing

Background / context

The Charities Act (NI) 2008 (the Act) came into being in September 2008. A year later the Charity Commission for Northern Ireland was established and in 2011 it was granted its powers of regulation, investigation and enforcement.

Until now the Charity Commission has been unable to establish the register of charities because of issues with the wording of the public benefit test in the Act. Now that this has been resolved by an amendment to the Act the Commission is in a position to establish the register. Before the Commission takes applications to register it must first consult on its statutory guidance on the public benefit requirement.

Introduction

The Commission is the regulator of all charities operating in Northern Ireland and as part of its role it is responsible for establishing and maintaining the register of charities. In assessing applications for charitable status the Commission must determine if the applicant fulfils the public benefit requirement. 

One of the Commission’s objectives, as laid out in the Act, is to promote awareness and understanding of the public benefit requirement, to issue public benefit guidance and to consult upon it. In addition to the statutory guidance the Commission has also produced supporting guidance on each of the 12 charitable purposes and further supporting guidance on the ‘public’ and ‘benefit’ elements of the public benefit requirement. At the same time it is also consulting on its guidance on registering a charity as satisfying the public benefit requirement is a key aspect of determining if an organisation is a charity or not.    

The list of consultation documents may appear daunting at first, however, the rationale for having so many separate documents is explained in the ‘Consultation on public benefit and registration’. The supporting guidance has been deliberately separated from the statutory guidance so that trustees can easily see what they are legally required to read and have the option of reading the additional supporting guidance.

The guidance can be read either online complete with hyperlinks or as a printed document. It is anticipated that the official guidance (following the consultation period) will be published in summer 2013.  

General comments

NICVA welcomes this consultation on the statutory guidance on the public benefit requirement and believes that charity trustees will look to the formal guidance for direction, not only at the time of registration but also in running their charity. Public benefit is quite a complex area and may not be easily understood, therefore this statutory guidance and detailed supporting guidance will be of benefit to any organisation looking to register as a charity. 

The Commission has helpfully outlined the difference in its use of language between ‘must’ and ‘should’. ‘Must’ for a specific legal or regulatory requirement and ‘should’ for best practice. For those not familiar with the term ‘trustee’ it has included a definition of trustee as being: 

‘the people responsible under the organisation’s governing document for controlling the management and administration of the organisation, regardless of what they are called’.  

Guidance on registering as a charity

The Charities Act states that the Commission must keep a register of all charities in Northern Ireland. 

It is a legal requirement for all charities currently operating in Northern Ireland, along with newly established charities, to register with the Commission; there are no exceptions or exemptions. The guidance outlines that an organisation must apply for registration as a charity if:

• it has exclusively charitable purposes
• its purposes are for the public benefit
• it is governed by the law of Northern Ireland
• it has control and direction over its governance and finances.

The guidance acknowledges that it will take a number of years before all existing charities will be assessed and appear on the register. When the Commission is ready it will call upon organisations to apply to register. For those organisations currently recognised as a charity for tax purposes, their details should already be on the ‘deemed list’ on the Commission’s website. All other organisations (not currently recognised as charities), will go on the ‘non-deemed’ list. To go on the latter ‘an expression of intent’ form needs to be completed. The Commission will then randomly select organisations from different income bands on the deemed list, and for those on the non-deemed list, in order of application. 

For those charities registered with a regulator in a different jurisdiction, for example, Scotland or England, they will be called forward last. 

When organisations are called forward to register the Commission will issue them with unique passwords to apply online. It expects that organisations should register as soon as possible after they receive this password and no later than after three months.

‘All applications for registration must be submitted online unless you have accessibility requirements.’

NICVA recognises that the Commission has a huge task in registering all the charities in Northern Ireland, however, it recognises that requiring it to be online may not be an easy option for some people. For example, some may not be living / operating in an area with broadband coverage or they may have a computer and be connected to the internet but not have the capacity to use it fully to fill out an online application.  

On the registration form you will be required to include details about your organisation’s purposes and state how these are for the public benefit; give details on activities you carry out and who benefits from them, who is involved on the committee / board (all of the trustees), finance and funding and any other special circumstances. 

For any organisation working with vulnerable people the Commission will seek evidence that the appropriate policies are in place. You will need to include your governing document and latest set of accounts with the online application so in preparation for registration it would be useful to have these scanned in to your computer if an electronic version is not already available. The Commission states that once it has all the required information it should take no longer than three months to assess each application. 

Publicly available information

Information that will be publicly available includes key information about the finance and funding of your organisation and the charity’s address. The Commission will agree for the address and / or trustee names to be withheld in certain circumstances, for example, security or personal safety reasons. The Commission states that only information with a ‘P’ beside it will be made visible on the Register. This is useful as some people may feel a little apprehensive including their personal details, for example, date of birth. This transparency, the Commission believes, will help promote trust and confidence with the public.

A very detailed step by step guide has been included as an Appendix for those that need a little more help and support in filling out the application form. This level of detail will hopefully mean that anyone, regardless of qualification, occupation and / or background, should be able to fill out the registration form without requiring professional help.  

Public benefit statutory guidance         

The statutory guidance explains clearly how a charity is defined in Northern Ireland as one which falls under one or more of the list of 12 descriptions of purposes in the Act and is for the public benefit.

The 12 descriptions of charitable purposes are: 

• the prevention or relief of poverty
• the advancement of education
• the advancement of religion
• the advancement of health or the saving of lives
• the advancement of citizenship or community development
• the advancement of the arts, culture, heritage or science
• the advancement of amateur sport
• the advancement of human rights, conflict resolution or reconciliation or the promotion of religious or racial harmony or equality and diversity
• the advancement of environmental protection or improvement
• the relief of those in need by reason of youth, age, ill health, disability, financial hardship or other disadvantage
• the advancement of animal welfare
• any other purposes includes any purpose recognised as charitable under existing charity law and any purposes which may reasonably be regarded as analogous to the listed purposes above, as well as those by virtue of section one of the Recreational Charities Act (1958).

An organisation will be considered charitable if it has one or more of the charitable purposes above and is for the benefit of the public. The Commission will consider each organisation on a case by case basis in determining whether or not it is fulfilling the public benefit requirement. The guidance helpfully explains the two elements of public benefit to explain in simple terms what it is:

1. Benefit - this is about what the benefits of your charity’s purposes are. The benefits must have the following features:

• be a result of the charity’s purposes
• relate specifically to the charity’s purposes
• outweigh any detriment or harm
• be clear.

2. Public - this is about who can benefit from your charity’s purposes, usually known as the charity’s beneficiaries. The benefits must:

• be to the general public or to a sufficient section of the public
• not place undue or unfair restrictions on who can benefit
• not provide a private benefit to individuals unless this benefit is incidental.

The Commission has also produced additional supporting guidance on the ‘public’ and ‘benefit’ elements of the public benefit requirement to give further explanation for those who require it. 

The statutory guidance highlights that all trustees are legally obliged to read the Commission’s public benefit statutory guidance:           

‘Charity trustees must have regard to the Commission’s public benefit statutory guidance when exercising any powers or duties to which the guidance is relevant.’ 

The statutory guidance is applicable not only when first applying to register but also on an ongoing basis in running the charity and in reporting annually to the Commission on how the charity meets the public benefit requirement. 

While it is not a legal requirement for trustees to read the accompanying supporting guidance, the Commission strongly recommends that they should do as it can aid understanding of the statutory guidance. It has produced supporting guidance documents on each of the 12 charitable purposes that give examples of activities which would and would not be considered as being for the public benefit. Some may find these examples very useful as they may be able to identify with them. 

As with the guidance on registration, the statutory guidance and supporting guidance on public benefit is produced in easy to understand language using examples to provide detailed guidance on the public benefit requirement. As the Commission states:           

 ‘It is our intention that anyone should be able to understand our public benefit guidance, without needing to seek legal advice.’

Respond to the consultation

The Commission is holding a series of evening consultation events across Northern Ireland. For further details and a full list of the consultation documents, please visit the Charity Commission's website.

The responses to the Commission’s consultation are required no later than 6, May 2013. To contribute to NICVA’s response, please send your comments to [email protected] by Friday, 19 April 2013.