Guidance

Examples of personal benefit

Published 10 May 2013

Applies to England and Wales

1. What ‘personal benefit’ means

A ‘personal benefit’ means a benefit that someone receives from a charity. That ‘someone’ might be an individual or an organisation.

If someone benefits from a charity as one of the charity’s beneficiaries, this is still a personal benefit. But it is proper for them to receive that benefit, provided it is incidental to carrying out the charity’s purpose.

2. What ‘incidental’ means

Personal benefit is ‘incidental’ where (having regard both to its nature and to its amount) it is a necessary result or by-product of carrying out the purpose.

3. Types of personal benefit

The following are some illustrative examples of different types of personal benefit. There may be others:

• financial benefits - these might be in the form of cash, grants or other payments

• non-financial benefits or payments in kind - these might be benefits in the form of goods or services rather than in cash, for example the provision of free accommodation, meals or transport

• benefits to trustees - the law states that trustees cannot receive any benefit from their charity including in return for any service they provide to it, unless they have legal authority to do so

For further information see:

• The essential trustee: what you need to know (CC3)

• Trustee expenses and payments (CC11)

• Conflicts of interest: a guide for charity trustees (CC29)

• Users on board: beneficiaries who become trustees (CC24)

• Charity reporting and accounting: the essentials November 2016 (CC15d)

• benefits to owners of property that a charity uses, occupies or is set up to preserve

For further information see:

• Acquiring land (CC33)

• Preservation and conservation charities (RR9)

• Museums and art galleries (RR10)

• gifts or honoraria as a mark of recognition for service

For further information see:

• Trustee expenses and payments (CC11)

• enhancing the reputation of a person or organisation - for example an individual whose work is promoted by a charity might benefit from having their profile raised

For further information see:

• Museums and art galleries (RR10)

• benefits to funders - for example, benefits to a local authority from a charity carrying out some of its services under contract. Or commercial benefits to a business from being able to use a charity’s logo on its material or products

For further information see:

• Charities and public service delivery: an introduction (CC37)

• Charities and fundraising (CC20)

• business benefits to commercial organisations - for example, local businesses might benefit from a charity working to regenerate an area, or from working with businesses to create employment opportunities as a way of relieving unemployment

For further information see:

• Promotion of urban and rural regeneration (RR2)

• Charities for the relief of unemployment (RR3)

• personal benefits to members - a charity must not be set up to provide benefit only to the organisation’s members unless:
  • a sufficient section of the public can access those benefits by becoming members
  • the membership structure is a suitable way of carrying out the charity’s purposes for the public benefit

For further information see:

• Public benefit: running a charity (PB2) Annex A: Benefits accessed through membership