Disbenefit is the opposite of benefit and we take it to mean the same as detriment or harm. We look at whether what an organisation does will cause any disbenefit to the public or any section of the public. If the disbenefit outweighs any benefit an organisation provides, it may fail the charity test.
Disbenefit is the word used in the 2005 Act to describe the negative effects on the public of an organisation’s activities in pursuit of its purposes, as opposed to the positive effects of activities that provide public benefit.
Disbenefit can take a number of forms but it must involve active, identifiable disbenefit to the public, or part of the public, because of what an organisation does or intends to do. For example, building a new community centre in a rural location may have an adverse impact on the environment, which could be considered disbenefit.
What do we look at?
When we decide if the organisation provides public benefit, we must also look at disbenefit (detriment or harm). To be taken into account, disbenefit needs to be identifiable and be more than an absence of benefit.
We do not take into account subjective views of general advantages or disadvantages of a type of organisation, for example in the case of fee-charging schools or local authority arm’s-length organisations. The fact that some people may disagree with what an organisation does, does not in itself mean that there is disbenefit. There would need to be evidence of actual or likely detriment or harm to the public, not to individuals or to organisations. When we look at disbenefit, we apply the same principles as when we look at public benefit:
We will look at the overall picture of public benefit in the organisation’s activities, taking into account any specific circumstances or constraints on the organisation. Evidence that there is disbenefit does not on its own mean that charitable status is in doubt.
Any kind of unlawful conduct (for example, unlawful discrimination) arising from an organisation’s activities will be disbenefit which we will take into account in making our decision on whether or not an organisation provides public benefit.
We are required to make a judgement on the whole picture of public benefit in the organisation being looked at, including:
We will do this based on all the facts and circumstances applying to the organisation.
Case 1: the evidence provided by an organisation indicated potential disbenefit
An organisation applied to become a charity. Its main activity involved using a type of non-conventional treatment on cancer sufferers.
We asked the organisation to provide independent, reputable evidence that this treatment was capable of helping cancer sufferers, but it was unable to do this.
Other information available to us suggested that the treatments were very experimental and had not been proven effective. Some of the information suggested that the treatment was potentially harmful and could cause serious health problems itself.
We concluded that the activities of the organisation did not advance health and that the potential for disbenefit in the form of harm to the cancer sufferers was such that it outweighed any potential benefit to the public. We refused the application.
Case 2: an organisation that provided public benefit also demonstrated substantial disbenefit
An organisation applied to become a charity with its main activity to provide care and treatment in overseas orphanages.
The organisation (which was already up and running) gave us evidence of the positive difference they were making to the standard of care in overseas orphanages. However, they also gave us information that stated that an individual had performed medical procedures without any formal qualifications and would continue to do so.
The organisation had charitable purposes and clearly provided public benefit. However, the potential for disbenefit, which could result in loss of life, was highly likely and outweighed any public benefit. Therefore, we had to refuse the application.