Public Benefit Test
When carrying out a charity formation to start a new charity within the UK you will be expected to abide by the rules laid down by the Charities Act 2006.
One of these rules states that every charity must prove that its purpose is for the public benefit.
This is clearly stated on the charity commission website where you can find detailed guidance on the public benefit requirement. But simply put the law requires that the “charitable purposes” of the non-profit organisation must be mainly for the benefit of the public.
This is broken down specifically into 3 main categories:
There must be identifiable charitable purposes
They must have obvious benefits
They must be for the benefit of the public or a section thereof.
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The Charities Act sets out the following descriptions of charitable purposes:
a) the prevention or relief of poverty;
b) the advancement of education;
c) the advancement of religion;
d) the advancement of health or the saving of lives;
e) the advancement of citizenship or community development;
f) the advancement of the arts, culture, heritage or science;
g) the advancement of amateur sport;
h) the advancement of human rights, conflict resolution or reconciliation or the promotion of religious or racial harmony or equality and diversity;
i) the advancement of environmental protection or improvement;
j) the relief of those in need, by reason of youth, age, ill-health, disability, financial hardship or other disadvantage;
k) the advancement of animal welfare;
l) the promotion of the efficiency of the armed forces of the Crown, or of the efficiency of the police, fire and rescue services or ambulance services;
m) other purposes currently recognised as charitable and any new charitable purposes which are similar to another charitable purpose.
Is Your Charity Charitable?
So the question remains, is your charity charitable? If you can show that the objective of your charity is to fulfil one of those purposes set out by the Charities Act 2006 and that those objectives are for the benefit of the public, then you will satisfy the criteria and be able to properly register your charity with the Charity Commission.
Of course, this is just one of the factors involved in starting a charity. You also need to use the right charitable vessel, draw up the necessary clauses to ensure there will be no profit distribution and assets will be properly handled if the charity is ever dissolved.
You can find out more about all these things and more by taking a look at our page how to start a charity.