Benefits offered by charities must not be unreasonably restricted by a person’s ability to pay, and people who are in poverty must not be excluded from the opportunity to benefit from a charity’s activities, according to new guidelines issued by the Charity Commission. The report, ‘Public Benefit and Fee-charging’, which applies to charities in England and Wales, places a new responsibility on charities which charge fees for their services to demonstrate benefit to the public. The principles of public benefit are firstly that “there must be an identifiable benefit or benefits” and secondly that “benefit must be to the public, or section of the public”. These benefits “must not be unreasonably restricted” either geographically or by the ability to pay. All of the aims of any charity must conform with these principles.
Arts organisations with charitable status will be affected because the majority charge for ‘primary purpose trading’, or trading which they undertake in the course of carrying out their primary aims, which includes charging entrance fees. Other charges relevant to the new rules are “costs that beneficiaries would have to incur in order to benefit from the service or facility” such as the purchase of books or equipment, and any other fees which restrict the opportunity to benefit from the charity, such as high membership fees. Certain charges are not relevant to the public benefit principles, including sponsorship and fundraising activities and trading which is not connected to the charity’s primary aims (such as providing interval refreshments). Ways in which arts organisations might provide public benefit include offering concessions, subsidised or free tickets, or free events; drawing on available funding to assist people to pay fees; providing free access to facilities; or publishing or broadcasting events on the Internet. However, proving “wider or remote benefits to the public at large”, which might encompass the idea that the arts benefit society generally, would be more difficult. The report also provides guidance to trustees on the reporting requirements for the new rules, and on how public benefit will be assessed by the Commission.