Friday, October 14, 2011

UK Upper Tribunal Rejects Part of Charity Commission's Guidance on Fee-Charging Schools

ThirdSector reports that the United Kingdom's Upper Tribunal has rejected in part an attempt by the Charity Commission for England and Wales to require schools seeking classification as a charity to admit students who are unable to pay the schools' fees.  While the Upper Tribunal accepted that given the public benefit requirement for charities "it is necessary that there must be more than a de minimis or token benefit for the poor," it rejected any brightline fee reduction or scholarship requirement, instead concluding that "once that low threshold is reached, what the trustees decide to do in the running of the school is a matter for them, subject to acting within the range within which trustees can properly act" (para. 229 of the opinion).  At the same time, it noted that the more than de minimis benefit for the poor is not by itself sufficient to demonstrate public benefit; rather, the test "is to look at what a trustee, acting in the interests of the community as a whole, would do in all the circumstance of the particular school under consideration and to ask what provision should be made once the threshold of benefit going beyond the de minimis or token level had been met" (para. 215 b; see also para. 216).  The Upper Tribunal acknowledged that its decision "will not, we know, give the parties the clarity for which they were hoping" but left it to Parliament to adopt more brightline standards, if it so chose (para. 260).  While the Charity Commission is attempting to paint the decision as a victory, it appears its attempt to focus primarily if not exclusively on requiring fee-charging schools to provide significant access on a reduced or zero fee basis to those of lesser economic means when determining whether such schools provide sufficient public benefit has been dealt a major setback.

Additional statements:  Independent Schools Council (initiated the case); National Council for Voluntary Organizations (intervenor in case).

LHM

http://lawprofessors.typepad.com/nonprofit/2011/10/uk-upper-tribunal-rejects-part-of-charity-commissions-guidance-on-fee-charging-schools.html

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