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Churches and charitable status

Much ink has been spilled recently over the decision by the Charity Commission to deny the Plymouth Brethren charitable status in respect of one of its gospel halls in Devon (the Preston Down Trust).

The church trust, a member of the Exclusive Brethren, was refused charitable status on the basis that it failed to demonstrate that it provided a genuine public benefit.

A storm of opposition has swelled in some quarters in response to the decision reached by the Charity Commission. On November 13, a heated debate took place in Westminster, leading some MPs to call for an inquiry into the Charity Commission’s interpretation of the law and its handling of the much debated public benefit test.

Some Christians have also commented that the Commission’s decision to deny charitable status to a long established church organisation is a sign of the increasing secularisation of society and reflects how far the country has drifted from its Christian moorings.

But what are the ramifications of the Charity Commission’s recent decision for the wider church?

The law

From 1891, and even from as far back at 1601, particular types of charities, such as ones that advanced religion and education or relieved poverty, were presumed as being of public benefit.

The Charities Act 2006 brought about a paradigm shift in how public benefit is assessed. The presumption that certain charities satisfy the test by their very nature has now gone. The Charity Commission asserts that the new Act imposes a duty on all charities to demonstrate, explicitly, that their aims are for the public benefit. Churches, including the Exclusive Brethren, are no exception to this rule.

The public benefit test

The 2006 Act has led to greater scrutiny by the Charity Commission of charities seeking charitable status. In so doing it has been argued that the Commission is going beyond its role as a regulator by imposing an unnecessarily high public benefit threshold on charities seeking registration. Of even greater concern has been the dispute as to whether the Commission is, in fact, wrongly interpreting the law in relation to the new public benefit test.

The issue at the heart of the Commission’s decision in the Preston Down application was the extent to which organisations and, in particular, churches like the Preston Down Trust should be accessible to the public so that they meet the public benefit test. The Commission’s decision in this case was that the church’s restrictions on who could attend worship and the limited extent to which the church was open to the public meant that they were not providing a public benefit.

Comment

But is the Charity Commission correct in interpreting the public benefit test in this way and, if so, is this a problem for the wider church?

Many practitioners and commentators in the charity sector consider that the Commission has set the bar far too high when considering whether charities meet the public benefit test. The Commission appears to be seeking more evidence to satisfy the public benefit test than is required by the law.

However, it is important to note that the Commission has not just adopted this approach to applications by Christian groups and churches. Applications by non-religious charities, such as community centres and art galleries, are also finding their applications questioned for failing to meet the public benefit test.

While noting that the bar is currently being set too high, it is important that all charities, secular and Christian, applying for registration are subject to proper scrutiny. Charitable status carries the benefit of tax breaks and Gift Aid. If a charity is to receive such benefits from the public purse to aid its public service, it can only be right that the charity uses such privileges to give back to society.

One can understand the Commission’s stance that, to receive public benefits, a charity must provide a public benefit. The public benefit test (properly applied) should serve to screen applications from charities whose aims may not be for the good of society.

The current approach of the Commission and its demands that applicants demonstrate a high level of public benefit raise important questions for evangelical Christians.

The Charity Commission’s approach is a reminder of how important it is for the church to fulfil its mission in accordance with the principles of 1 Peter 2.12. The publicity sparked by the Preston Down case gives all churches and Christian organisations the opportunity to reflect on how they are practically living out their faith in worship and service.

Like many public bodies, the Charity Commission has not been immune to the government’s austerity programme. Figures suggest the Commission has had its annual budget slashed by up to a third. In years gone by the Commission registered charities with less scrutiny and then continued to monitor new charities to ensure they met the public benefit. While such an approach was beneficial, it was expensive and heavy in staff labour. A shift towards greater regulation at the time a charity applies for registration rather than providing continued input later on may simply be the only way the Commission can operate within its budget.

Practical solutions

What can a Christian group or church do to ensure it meets the raised public benefit hurdle in an application for charitable status?

1. Do not assume necessarily that the Charity Commission understands what a church or Christian group does. In my experience of helping Christian organisations apply for charitable status, it has been necessary to spell out what happens at services and activities which go on each week. This process demonstrates to the Commission how the church is meeting the public benefit test by acting in accordance with its objects.

2. Conduct an ‘audit’ of the church’s activities. Churches and Christian groups, like all charitable bodies, should be accountable. To be good stewards of the benefits received by obtaining charitable status, an ‘audit’ of what the church does in engaging the public can be useful. Considering the church’s activities enables it to assess how it is welcoming its visitors to its services and identifies where it can be serving them.

3. However, it is important that Christian groups avoid the danger of simply listing their practical activities to obtain the approval of the Charity Commission. I would advise Christian organisations to make clear in their application that the public genuinely benefits from Christian worship and teaching. While this is something that has always been recognised as a public benefit in law, it is now often met with misunderstanding or confusion by the Commission. In my experience, the approach of the Charity Commission can, sadly, reflect the secular view that the Christian faith is not inherently for the public benefit. This is all the more reason for Christians to stand firm and maintain the principle that the heart of the Christian faith is above all else for the lasting good of the public.

Ben Bourne helps Christian groups and churches obtain charitable status and is a charity and employment solicitor at Ellis-Fermor & Negus Solicitors (http://www.ellis-fermor.co.uk).