The legal test at the heart of being a charity – and what “showing” it really means
Public benefit is the legal test at the heart of being a charity: every one of a charity’s purposes has to be for the public benefit, and it is not assumed; it has to be shown. The Charities Act 2011 calls this the public benefit requirement, and it has two parts: the benefit itself has to be real and identifiable, and it has to reach the public, or a sufficient section of it. An organisation that cannot show both is not a charity in law, however worthwhile its aims.
This guide explains what public benefit means, the two aspects the Commission tests, how to show it when you register, and where applications most often fall short. For the wider registration picture, our full registration guide sets out the whole process.
What is public benefit?
Public benefit is part of what makes an organisation a charity in England and Wales, and it runs through three stages of a charity’s life. To be a charity, every purpose must be for the public benefit. To operate as one, trustees must carry out those purposes for the public benefit. And to report, a registered charity must explain each year how it has done so. There is no presumption at any stage – a purpose that sounds charitable still has to meet the test, and the Charity Commission assesses it case by case.
What are the two aspects of public benefit?
The Commission splits the requirement into two, and a purpose generally has to satisfy both.
The benefit aspect. The purpose must be beneficial in a way that is identifiable and can be backed by evidence where needed, rather than asserted as a matter of opinion. And any detriment or harm the purpose causes – to people, property or the environment – must not outweigh that benefit.
The public aspect. The benefit must reach the public in general, or a sufficient section of it, and it must not give rise to more than incidental personal benefit. What counts as a “sufficient section” depends on the purpose – there is no single number that applies across the board.
One exception is worth knowing. Charities for the relief, and in some cases the prevention, of poverty only have to satisfy the benefit aspect, not the public one – the law treats poverty charities differently from the rest. For every other purpose, both aspects have to be met.
How do you show public benefit when you register?
This is where applications come unstuck. The benefit cannot simply be stated; it has to be identifiable and, where necessary, capable of being proved. For a registration application, that means showing how your activities actually deliver the benefit to the people you say you will help – what the work is, who receives it, and how it advances the charitable purpose.
An application that describes good intentions but not delivery leaves the Commission unable to see the benefit, and that is one of the most common reasons applications stall. The clearer the line from activity to benefit to beneficiary, the stronger the application. Public benefit and clear charitable objects are two halves of the same job; the objects say what the charity is for, and the public benefit case shows it reaching the public.
What counts as a sufficient section of the public?
The public aspect does not mean everyone has to benefit. A charity can focus on a particular group – a town, an age group, people with a shared need – as long as the restriction is reasonable and connected to the purpose. What it cannot do is define its beneficiaries so narrowly, or by something arbitrary like a personal or contractual connection, that the group stops being a section of the public at all. A class that is too small, or drawn to benefit particular named individuals, fails the public aspect.
Can a charity charge fees and still be for the public benefit?
Yes, charging fees does not stop a charity from being charitable, but it cannot price out the people it exists to help. The Commission’s position is plain: where a charity’s charges are more than the poor can afford, it has to make more than minimal provision for those who cannot pay to benefit. A charity that charged fees only the well-off could meet, and did nothing for anyone else, would fail the public benefit test.
What about personal benefit?
Some private benefit is unavoidable and allowed – a person relieved of poverty benefits personally, and a charity’s staff are paid. The test is that any personal benefit is incidental: a necessary result or by-product of carrying out the purpose, judged by both its nature and its amount, rather than the real point of the charity. Where private benefit becomes more than incidental, where an organisation starts to look set up to benefit particular people, it fails.
Why do applications fail on public benefit?
Almost always, the gap is the same: the application describes what the charity intends rather than how it will deliver. The objects can be word-perfect and the purpose plainly charitable, and the application still fails here, because the Commission cannot see the benefit reaching the public in practice. Our article on why applications get refused covers how this shows up in a refusal and what to do about it.
Showing your work reaches the public
Public benefit is less about finding the right words and more about being able to show your work reaches the public it is meant to. If you would like help making that case for your charity – the activities, the beneficiaries, and the line between them – before you apply, our charity setup and registration support prepares the application with you.
