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Deciding whether an organisation meets the charity test

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Our job as Scotland’s charity regulator is to promote public confidence in charities. One of the key ways in which we do this is to ensure that organisations which are included on the Scottish Charity Register meet the charity test set by the Scottish Parliament. Once charities are added to the register, we help them to maintain their charitable status by encouraging and assisting them to meet the requirements of charity law. 

In the vast majority of cases, the decision to add new charities to the register is simple and straightforward, but in a small minority these decisions can be complicated or controversial. When this happens, it’s important that we set out the basis for our decision making so that the public and our stakeholders can understand the decisions we’ve taken. One recent case which has generated significant public interest is our decision to add a new organization, Stanton Healthcare (East of Scotland), to the register.

The legal basis for our regulatory work is set out in legislation passed by the Scottish Parliament, specifically sections 7 and 8 of the Charities and Trustee investment (Scotland) Act 2005 (‘the 2005 Act’). 

When deciding whether an organisation meets the charity test and can be added to the charity resister, OSCR is required to determine:

Whether a body provides or intends to provide public benefit

In assessing this application we carefully considered all aspects of the charity test to come to our decision.

We examined whether Stanton Healthcare (East of Scotland) was a new organisation, or whether its ties with other similar groups should be considered. This is important as, our assessment must also be based on what the organisation itself does or intends to do, as opposed to what other independent organisations may have done in the past.

When considering this application we were aware of allegations in the media concerning the activities of Stanton Healthcare Belfast. With these issues in mind, we looked in detail at the nature of Stanton Healthcare (East of Scotland)’s governance and affiliation with the Belfast organization and Stanton International, an organisation based in the US. This was to help us assess whether the activities of those bodies were relevant in determining whether Stanton Healthcare (East of Scotland) intended to provide public benefit. The evidence that while Stanton Healthcare (East of Scotland) and Stanton Healthcare Belfast share an affiliation with Stanton International, there is no formal relationship with Stanton Healthcare Belfast and Stanton Healthcare (East of Scotland) is separately governed, and its activities are separate and distinct.

What this means in practice is that to properly consider this application we needed to assess whether it intends to provide public benefit in future, rather than considering the previous actions of separate organisations.

We also examined the charitable purposes put forward by the organisation. These are set out in the charity’s Scottish Charity register entry as:

  1. The saving of lives;
  2. The advancement of human rights;
  3. The relief of those in need by reason of age, ill-health, disability, financial hardship or other disadvantages;
  4. The advancement of the philosophical belief in the existence and equal value of human life from the moment of conception until natural death; and
  5. Any other purpose that may reasonably be regarded as analogous to any of the preceding objects and which is consistent with the Fundamental Beliefs.

The first three of these are clearly related to purposes set out in the 2005 Act.  The fourth purpose is on which in previous cases OSCR has accepted as charitable, since the 2005 Act provides that

the advancement of any philosophical belief (whether or not involving a belief in a god) is analogous to the charitable purpose of advancement of religion. 

We set out in our Meeting the Charity test guidance how we decide whether beliefs are capable of being advanced in a way that these purposes are charitable.

Finally, we weighed up whether there was any disbenefit (detriment or potential harm) of including this organisation on the register, and how the disbenefit compares to any benefit the organisation intended to provide. In considering this we bore in mind what our published guidance has to say about disbenefit:

The fact that some people may disagree with what an organisation does, does not in itself mean that there is disbenefit.

Taking all of these matters into account, our view was that the organisation met the charity test, and that we should enter it in the Scottish Charity Register. Under the 2005 Act there is no third party right of review or appeal to a decision by OSCR to register a charity.

As I set out at the start of this piece, OSCR’s responsibilities do not end when a charity is added to the Scottish Charity Register. Now that this charity is on the register, the organisation and its trustees must meet all of their duties under charity law. All charities on the Scottish Charity Register must provide tangible public benefit through its activities, and all of the requirements of the charity test continue to apply to their ongoing activities.

Charity trustees have a legal responsibility to act in the interests of their charity, and to ensure it acts only in furtherance of its purposes, at all times acting with the high level of care and diligence expected of trustees.

If we become aware of evidence to suggest that any of these duties are not being met by charities on the register, we have a range of powers available to us to make inquiries and take action in the light of those inquiries. Adding a charity to the Scottish Charity Register is the beginning of our regulatory work, not the end.