Relevance for Charities: Exclusive Charitable Purposes and Public Benefit.

Advantages of being a charity in law

Unless an organisation is a charity in law, it will not benefit from the tax, VAT, business rates and other advantages that attach to charities. Therefore, when planning to launch a new organisation as a charity based in England & Wales, its founders will need to ensure that it will have charitable status in law. 

An organisation does not need to be registered as a charity with the Charity Commission if it is neither set up as a CIO (Charitable Incorporated Organisation) nor has an annual income of less than £5,000 per year, but its founders may choose to register it in either case. However, an organisation may only be registered as a charity if it is a charity in law. 

Whether an organisation is capable of being registered or is or is not registered with the Charity Commission is not relevant to the question of whether it is a charity in law. 

What ensures that an organisation will be a charity in law?

Firstly, it must have “charitable purposes”, which means that it must have at least one of the purposes defined by law as “charitable”, and it also means that its purposes must be exclusively charitable. 

Secondly, it must be for the “public benefit”. This means that there must be “benefit” and that benefit must be for the public or a section of the public. 

For further information and an explanation of what will constitute “charitable purposes” and “public benefit”, see Can Your Purpose Be Achieved by Setting Up a Charity, and Guidance Note: What Makes an Organisation a Charity in Law.

A Recent Charity Tribunal Ruling Involving “Charitable Purposes” and “Public Benefit”

A recent case, heard by the First Tier Tribunal (Charity) was The International Foundation for Therapeutic and Counselling Choice (“IFTCC”) – v- The Charity Commission for England & Wales which was decided on 30 April 2025. It was an appeal by the IFTCC against the Commission’s refusal on 25 July 2024 to register the IFTCC as a charity. The IFTCC’s appeal was dismissed by the Tribunal. The decision is a good example of how the rules on charitable purposes and public benefit are applied to decide whether an organisation qualifies as a charity in law. See “To be a ‘Charity in Law’ both Exclusive Charitable Purposes and Public Benefit are Required."  for more information on this case.

It is clear from the IFTCC case that if founders of an organisation are relying on it amounting to a charity in law, it is essential that at an early stage in their planning process, they satisfy themselves that the organisation will have exclusively charitable purposes and that those purposes will be for the public benefit. Where there is any doubt, it will be prudent to take professional legal advice about those factors.