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Prior to the Charities Act 2006, charities established to advance education or religion or to relieve poverty were presumed to have aims which are for the public benefit, and they were not required to demonstrate this further, unless there was evidence to the contrary.
The Charities Act 2006 removed this presumption and all charities now have to demonstrate that their aims are for the public benefit.
Public benefit reporting is all about the ‘nuts and bolts' of the charity's work, it described the goods or services the organisation delivers, and how people benefit from these.
The research, by Sheffield Hallam University, assessed how well registered charities are getting to grips with the new requirement, introduced in 2008, to report on public benefit in their Trustees' Annual Report (TAR).
The research has shown that trustees are generally able to explain their charity's aims and who benefits from its work but less successful in explaining how they have benefitted in practice.
If you are among those charities that met the basic legal requirements by just stating in your TARs that you had 'had regard' to the Charity Commission's guidance on the public benefit requirement but lacked clarity in some areas, you have to do better by fully explaining how your charity's activities have contributed to their aims or how people have benefitted in practice.
The research concluded that many charities are missing out on the opportunity to explain, through their reporting on public benefit, how their work has a positive impact on their beneficiaries.
Sam Younger, Chief Executive of the Charity Commission said: "I would urge all trustees to look at the range of guidance we have produced to help them give a clear account of their charity's public benefit."
For more information and to request copies of the report and the Charity Commission's initial analysis please contact the charity commission’s press office.
You can also get further support in accounting and financial management, from Maroof, your local community accountant, on 020 8315 1919 or e-mail: email@example.com.