Most organisations put limits on who can benefit from their activities. Most of the time this will not stop an organisation providing public benefit. We have to look at the organisation's purposes and decide if any restrictions are unreasonable, unjustifiable or unlawful.
When we decide if an organisation provides public benefit, we have to look at whether it restricts access to the benefits it provides and, if it does, whether the restriction is undue.
When we consider whether an organisation provides public benefit, we must consider whether any conditions which limit access to the benefits the organisation provides to a particular section of the public, are unduly restrictive.
An unduly restrictive condition is a limit on who can access the benefit provided by an organisation where the restriction is not reasonable or justifiable in the context of what the organisation does and what its purposes are, or is unlawful.
The main types of restrictions we look at are:
It is important to understand that few charities benefit the whole of the public. Many charities can and do restrict access to their services or activities, but still provide public benefit and so meet the charity test. For example, a charity set up to help people who suffer from a particular disease will restrict access to those diagnosed with the disease.
A restriction on the ability to access the benefit provided by an organisation may be justified in terms of the organisation’s purposes set out in its governing document.
A charity’s activities may also be limited to a particular country or an area within a country. This will be reasonable because the charity’s purposes are to meet a need in that particular area, or because limits on its resources allow it only to help people in a small area. Where restrictions reflect the charity’s purposes and are reasonable in other ways, then the organisation should be able to provide public benefit.
Things that are likely to make a condition unduly restrictive are:
We will take into account other factors, for instance other legal or regulatory requirements, that may help us to decide whether a condition on access is reasonable in the context of what the charity does. Where an organisation restricts benefit in a way that breaches equality law we will generally regard this as an undue restriction. For example, where an organisation restricts access to events it holds to people of a particular race, and where there is no rational link between this restriction and its charitable purpose.
If an organisation is providing facilities or services to the public (or a section of it), any restriction on public access such as opening hours or access to a particular building, must be considered. Where these restrictions are not reasonable and appropriate in the circumstances, or prevent access to the benefit provided for a majority of potential beneficiaries, they may be undue.
If an organisation restricts benefit to one specific person, or to people with a particular family connection, or to people who have worked for a single employer, this is likely to be an unreasonably closed section of the public, and unduly restrictive.
Many types of charity make people pay for access to the benefit they provide. On the face of it, this restricts access to that benefit to the people who can pay the fees or charges involved. We may need to look at whether this makes them unduly restrictive. This will depend on the facts about the organisation and the fees involved.
Where fees are charged which affect access to a benefit, we expect there to be arrangements in place to help people who cannot afford those fees. For example, discounts, grants, or bursaries to help with fees. Help that is targeted based on the individual’s ability to pay and helps people on a range of incomes, including low incomes, will count the most here.
If an organisation provides some benefits for free but charges for others, we will look at the whole picture of benefit and restriction when making a decision.
The greater the fee, the more evidence we will need about help for those who cannot pay.
Any fee structure and arrangements for help with fees must be well publicised and clearly explained.
Some benefits are more expensive to provide than others, and charities need to be able to cover the cost of doing what they do. We will consider this when looking at the fees and charges. We will look at how far the cost of providing the benefit is subsidised by the organisation (or others) to keep the fees charged to individuals low.
If an organisation’s charges are so high that it is impossible for those who cannot afford them to benefit, and no help is offered to meet those costs, then this would be an undue restriction.
Where we find that conditions on accessing benefit are restrictive, we will consider this when making a judgement on the whole picture of public benefit in the organisation we are looking at.
We make a judgement on the whole picture of public benefit in the organisation, including:
We do this based on all the facts and circumstances applying to the organisation.