Disbenefit
Disbenefit is the opposite of benefit and we take it to mean the same as detriment or harm. We look at whether what an organisation does will cause any disbenefit to the public or any section of the public. If the disbenefit outweighs any benefit an organisation provides, it may fail the charity test.
What is disbenefit?
Disbenefit is the word used in the 2005 Act to describe the negative effects on the public of an organisation’s activities in pursuit of its purposes, as opposed to the positive effects of activities that provide public benefit.
Disbenefit can take a number of forms but it must involve active, identifiable disbenefit to the public, or part of the public, because of what an organisation does or intends to do. For example, building a new community centre in a rural location may have an adverse impact on the environment, which could be considered disbenefit.
What do we look at?
When we decide if the organisation provides public benefit, we must also look at disbenefit (detriment or harm). To be taken into account, disbenefit needs to be identifiable and be more than an absence of benefit.
We do not take into account subjective views of general advantages or disadvantages of a type of organisation, for example in the case of fee-charging schools or local authority arm’s-length organisations. The fact that some people may disagree with what an organisation does, does not in itself mean that there is disbenefit. There would need to be evidence of actual or likely detriment or harm to the public, not to individuals or to organisations. When we look at disbenefit, we apply the same principles as when we look at public benefit:
- It should be possible to identify and describe the disbenefit. Disbenefit can vary in nature, scale and visibility. For us to consider it, there must be evidence of actual or likely detriment or harm.
- The disbenefit should clearly be a product of the organisation’s activities. There needs to be clear evidence that the disbenefit results from the organisation’s activities.
- The disbenefit should affect the public or a section of the public. We will not take into account disbenefit that affects only the private interests of an individual or individuals (for example, the effect on the value of person’s property from a charity carrying out its activities in the neighbourhood).
We will look at the overall picture of public benefit in the organisation’s activities, taking into account any specific circumstances or constraints on the organisation. Evidence that there is disbenefit does not on its own mean that charitable status is in doubt.
Any kind of unlawful conduct (for example, unlawful discrimination) arising from an organisation’s activities will be disbenefit which we will take into account in making our decision on whether or not an organisation provides public benefit.
How we make our decision
We are required to make a judgement on the whole picture of public benefit in the organisation being looked at, including:
- the balance of public benefit and private benefit
- the balance of public benefit and disbenefit
- whether any condition on accessing the benefit is unduly restrictive.
We will do this based on all the facts and circumstances applying to the organisation.