The debate about charitable status for public schools has been rumbling along, especially since the charity law reforms brought them firmly within scope of Charity Commission regulation and inspection. Many public schoold have a good tradition of support for the community, bursaries and opening up their facilities. Some have been involved in supporting the development of Academies. Some have been expanding overseas - like Dulwich - so delivering economic benefit. But not all. All need to come up to the standards of the best.
The Independent Schools Federation had challenged the Charity Commission. The Tribunal announced its verdict this morning and it is a vindication of the actions and judgment of the Commission.
Looking at it I am pleased that this decision reinforces the need for all charities - including public schools - to demonstrate how they benefit the public, and for the Charity Commission to challenge them where they do not.
The decision was important because of the wider implications for "public benefit" and how it might be judged.
We now need all charitable private schools to do as much as they can for the communities they operate in, rather than thinking about the minimum required for a tax break. Many do. Many have looked at increasing their work in this area so they can show public benefit. That's good. And we need the Charity Commission to have no fear in challenging schools who are not doing enough.
The CC are to produce new guidance. I hope that the new guidance, in due course, will bring further clarification to the issue of fee charging charities and other charities who charge fees and public benefit.
I know of a school with a foundation that required a gift to an almshouse charity to house the poor and also provided for the school itself, to educate the poor. The annual gift to the almshouse charity remained unchanged from the 1830s at £10, which in the 1830s would have been a substantial amount, until prompted to up it which was only done begrudgingly and nominally. The school meanwhile is a highly selective school for the rich and features amongst those with government ministers. I cannot see how a school charging £10,000 a term can possibly be operating charitably; clearly the bulk of the endowment funds are principally benefitting the fee-paying pupils. Schools with charitable status must PROVE they are fulfilling their charitable purpose or lose their charity status. The government believes in focussing resources onto areas of greatest need. Public schools are not focussing that valuable tax relief to areas of greatest need, and should lose their status unless they can show an overwhelming case.
It's interesting that the public schools seem to think they have won on this matter:
I think they may be seriously mistaken. The Charity Commission, unless it bottles out, will - I suspect - issue tighter guidance of the level of charitable activity that is required to retain charitable status. The last laugh may not be heard from those schools that use huge endowment funds for little charitable benefit.
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