​Clarification of what counts as public and private benefit will make it easier for organisations to understand whether they should be a charity or not

Scotland’s charity regulator has simplified guidance on how to pass the test to become a charity.

The new Meeting the Charity Test guidance is designed to make it easier to understand the charity test, especially the difference between public benefit and private benefit.

Charities in Scotland must be able to demonstrate that they provide benefit to the general public. However, they must also ensure that they are not providing more support to private individuals than the public at large.

The issues of public benefit has caused most controversy in relation to private schools, which some, including the Scottish Labour Party, argue should not be classed as charities.

The new guidance states: “If it appears that the organisation has been set up wholly or mostly for the private benefit of an individual or group of people, it is unlikely that it will pass the charity test.”

It should also help organisations decide whether becoming a charity is the right thing for them in the first place

A long-running Office of the Scottish Charity Regulator (OSCR) review of Scotland’s 52 private schools was completed last year, with the majority passing the test.

OSCR was satisfied that 50 of the schools provided enough public benefit through the provision of bursaries to poorer students and enabling their local communities to use their facilities, such as sports grounds.

While the basic charity test principles remain unchanged, the new guidance is designed to make it much easier for the trustees of potential new charities to understand what is involved.

It is web-based and organised into separate sections for easy reference according to individual needs. The guidance has been informed by the regulator’s experience in assessing and granting status to over 5,000 charities since the last update, along with widespread consultation of charities and third sector advisors.

Written in clear, non-technical language, each section includes real-life case study examples to illustrate the legal concepts that OSCR must consider and issues that could arise.

OSCR’s head of registration, Martin Tyson, said: “Our updated guidance features a range of case studies based on the type of scenarios we’ve encountered, to help applicants and existing charities to understand what’s required of them, how we look at the charity test, and the issues that can arise. It should also help organisations decide whether becoming a charity is the right thing for them in the first place.”

The updated guidance is available in HTML and PDF format on OSCR's website.