SCVO response - Charity Test Guidance Consultation

Section A: Draft Guidance as a whole

Question 1:  Are you able to find your way around the draft Guidance? The guidance is generally easy to navigate, both in the PDF and the online version. The introduction of a web specific version is welcome as it is more navigable on mobile devices and provides access to specific information more quickly.  However, the buttons used at the bottom of these pages could be clearer, with larger fonts and the navigation direction featured more prominently. Question 2:  Overall, is the draft Guidance clear and easy to understand? The draft guidance is clear and easy to understand, this is largely down to the simple and clear language adopted throughout the document, with explanations given where technical terms are used. The layout and style are also commendable, the use of single fonts, adequate spacing and sensible use of bold make the document accessible and clear. Question 3: Are there any gaps in the draft Guidance? If so, what? Given the use of case studies throughout the document, it would make sense to have some examples of purposes in the section which sets out how to write a charitable purpose. This is an area where prospective charities often struggle to articulate what they do in the context of charitable purposes, so providing some illustrative examples or links to good practice would be helpful. Question 4:  Are the examples used clear and helpful? In most instances the examples are helpful. The case study used to illustrate ‘the prevention or relief of poverty’ on page 10 could be clearer. In this example the organisation has targeted those in need in need of support by specifying homeless people. However, they have an additional objective to promote citizenship by also inviting others to eat with the homeless people. It is unclear why in this example they would not meet both charitable purposes and why the organisation had to take action to remedy the situation? Question 5: Are the purple links to the explanation of terms helpful? Linking to the explanation of terms is helpful in some cases. However, with a term such as ‘public benefit’ where there is a considerably more complete explanation on page 57 of the guidance it would seem sensible to link to the more detailed explanation, rather than the glossary of terms. It would also help if there are direct links to and from this document to the online applications form. This will allow people to get the answers they need to their questions quickly and easily and should result in better quality applications and reduce the delays caused when OSCR has to return to the prospective charity for additional information. Question 6: Are there any sections of the draft Guidance that you think could be clearer or require more detail? While the guidance is undoubtedly clear, people learn and process information in a variety of different ways. It would be beneficial if the guidance contained diagrams or flow charts to illustrate processes where relevant. This would be particularly useful for the way OSCR assesses the charity test as outlined on page 4. Those steps in a flow chart would illustrate the various steps required to meet the charity test. Question 7:  If you are familiar with the current Meeting the Charity Test Guidance, which version of the Guidance do you find most helpful and why? The new guidance is more accessible in its language and tone and this will make it particularly helpful for charities who wish to understand how the test applies to their own organisation. The old guidance covered the same ground but in a more technical way and seemed to be geared towards advisors and those already familiar with the terms involved.

Section B: Charitable purposes

Question 8: Do you have any comments on the content and/or structure of the charitable purposes section? The Scottish Sports Association has raised concerns with us about the definition of ‘the advancement of the public participation in sport’ used in the guidance. Their concern is that the definition on page 33 is not in line with the definition to which the national sports councils adhere to. Sportscotland and the other UK sports councils define sport according to the Council of Europe’s European Sports Charter 1993 definition of sport and based on whether the sport is well established and organised within its jurisdiction. The European Sports Charter 1993 definition is as follows: ‘Sport means all forms of physical activity which, through casual or organised participation, aim at expressing or improving physical fitness and mental well-being, forming social relationships or obtaining results in competition at all levels.’ They suggest that it would be inconsistent for OSCR to be defining sport differently to that accepted by the sports councils, the organisations who formally govern sport across the UK. In particular, the reference to ‘physical skill and exertion’ is limiting and excludes various sports depending on perception of the word ‘exertion’. For example, arguably shooting does not involve much exertion but it is a recognised sport which requires physical skill and meets various other requirements listed such as organised activity, competition, opportunities for participation. We would suggest the OSCR contacts the Scottish Sports Association directly to discuss these concerns in more detail and look at possible solutions. Voluntary Health Scotland suggested that more clarity would be helpful for Case study 1 on page 18 of the PDF. They suggested that while a lack of evidence for actual treatment should cause the charity to fail the test, it should be made clear that for a charity involved in developing treatment, the same level of evidence may not be available and that this should not cause them to fail the test. Question 9:  Is our explanation of the charitable purposes clear? As stated above, it would help to provide some illustrative examples of charitable purposes or links to good practice to assist new charities with writing their purposes. The charitable purposes section is considerably longer than the previous guidance and the expansion of the definitions is welcome. Structurally we are unsure whether the placement of the 40 or so pages detailing the charitable purposes is the best way of laying out the information in the PDF version of the document. It might be better to list the charitable purposes in the introduction with links to the detail placed at the end of the document. The advantage of this would be to bring forward the important information on public benefit and ensure it is given the correct prominence and is not neglected. Question 10: Does the draft Guidance help you to understand the difference between activities and purposes and how OSCR will consider whether activities relate to a particular purpose? Many charities struggle to articulate correctly what their organisation wants to achieve as they feel constrained by the need to refer directly to the defined purposes, so the clear format presented by the table on page 6 is helpful. It would also be beneficial to have a statement in this section to the effect that further definitions of charitable purposes can be found further on in the document, with links to that section of the guidance.

Section C: Public benefit, Private benefit, Undue restrictions, Disbenefit

Question 11: Do you have any comments on the content of the above sections in the draft Guidance? The section on private benefit states: ‘Individuals can, do, and should benefit from the activities of charities. However, where individuals, other than members of the public, benefit from an organisation's activities, we will regard this as private benefit.’ This is sentence is potentially confusing, with the difference between individuals and members of the public not being clear. A link back to the definition of ‘public’ would help address this issue, especially for those using the web version. Question 13: Do you have any comments on the approach to decision making on the above sections in the draft Guidance? A primary concern with OSCR’s application of the charity test is the issue with the charitable status of some fee-paying schools and the interpretation of the ‘undue restrictions’ test that has been applied. Given that the median proportion of available income spent on means-tested bursaries by fee-paying schools covered in OSCR’s recent report was 6.1%[i], many people will be unconvinced that this can be considered sufficient mitigation of undue restriction. We welcome OSCR’s commitment to maintain a higher vigilance with regard to fee-paying schools but don’t agree that the charity test as it stands is working if it allows schools of this type to have charitable status. However, we appreciate that this is a complex issue with implications beyond fee-paying schools. The work of the Scottish Parliament’s Public Petitions Committee looking into this area is helpful, but these issues need further consideration. We would like to see the Scottish Government undertaking a full review of the effectiveness of charitable law.

Equality Impact Assessment

Question 17: Do you think the draft Guidance will have an impact (positive or negative) on any of the protected characteristic groups listed? Given the percentage of those identified in the Equality Impact Assessment as having learning difficulties we would suggest that OSCR produce an easy-read version of the guidance. Boards often have representatives of their service users and they should be provided with the information in a format that is accessible.

Conclusion

We welcome OSCR’s new guidance on meeting the charity test. In general, the document is more accessible and easy to understand for those wishing to set up charities, charity trustees and their advisors. The use of numerous case studies is helpful and this should be extended to the drafting of charitable purposes. An easy-read version of the guidance would be welcome and should be produced for all the main guidance documents designed for trustees as they are updated. The continued charitable status of some fee-paying schools shows that there are clearly still some problems with the charity test which should be rectified in a wide review of the Charities and Trustee Investment (Scotland) Act 2005.

Contact

Felix Spittal Policy Officer Scottish Council for Voluntary Organisations, Mansfield Traquair Centre, 15 Mansfield Place, Edinburgh EH3 6BB Email: felix.spittal@scvo.scot Tel: 01463 251 724 Web: www.scvo.scot

About us

The Scottish Council for Voluntary Organisations (SCVO) is the national body representing the third sector.There are over 45,000 voluntary organisations in Scotland involving around 138,000 paid staff and approximately 1.3 million volunteers. The sector manages an income of £4.9 billion. SCVO works in partnership with the third sector in Scotland to advance our shared values and interests. We have over 1,600 members who range from individuals and grassroots groups, to Scotland-wide organisations and intermediary bodies. As the only inclusive representative umbrella organisation for the sector SCVO:

• has the largest Scotland-wide membership from the sector – our 1,600 members include charities, community groups, social enterprises and voluntary organisations of all shapes and sizes
• our governance and membership structures are democratic and accountable - with an elected board and policy committee from the sector, we are managed by the sector, for the sector
• brings together organisations and networks connecting across the whole of Scotland

SCVO works to support people to take voluntary action to help themselves and others, and to bring about social change.   Further details about SCVO can be found at www.scvo.scot.   [i] http://www.oscr.org.uk/media/1749/2014-12-08-schools-report-final-for-publication.pdf