OSCR's revisited

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OSCR has published its revised “Meeting the Charity Test” guidance to accompany the release of its latest Rolling Review report.  This guidance updates the original 2005 version, setting out how OSCR determines whether a new body or existing charity meets the Charity Test.

Whilst some of the information contained in the guide simply reiterates the previous version, OSCR has also developed its thinking on certain aspects of the Charity Test in light of having 3 years practical experience in applying the Test.  It is also informed by outcomes from its assessment of existing Scottish charities from the Rolling Review. 

The main points to highlight are:

  • Unclear or ambiguous purposes in a charity’s constitution could cause it to fail the Charity Test. OSCR advises that charities should be reviewing their constitutions for compliance;
  • “Charity” or “charitable” purposes must be defined within both Scottish and UK law for tax purposes;
  • Only activities in furtherance of charitable purposes will be assessed as providing public benefit. Activities which do not relate to the charity’s purposes are not;
  • Charities are not obliged to achieve all of their purposes all of the time.  However, if there is no activity, OSCR may remove the charity on the basis that no public benefit is being provided;
  • If private benefit is identified, it must be provided only because it is necessary for the functioning of the charity;
  • Charities must not be inward looking.  Membership charities should therefore focus on reviewing the benefits which are provided to members to ensure that they satisfy the public benefit test;
  • Unduly restrictive conditions are restrictions so extensive as to effectively prevent access to the benefit for the majority of potential beneficiaries.   Such conditions can take many forms.  The rules about this are complex and each such condition should be reviewed;


Fee charging without providing means-tested facilitated access could lead to a charity failing the Charity Test.  The higher the fee, the larger the potential difficulty.
OSCR concludes by stating that it will not apply a box-ticking exercise when evaluating public benefit; a charity’s activities must always be looked at in the round.  However, the guidance also notes that OSCR will continue to prioritise those charities for Rolling Review which OSCR sees as presenting a specific risk or uncertainty in relation to the Charity Test.  The next phase of the Rolling Review will commence in 2009, which leaves some time for amending constitutions.  OSCR will announce those chosen for review in due course.

In the words of OSCR itself, it cannot be overemphasised that “an up to date constitution is an essential precondition of good and effective governance of any charity”. 

Further information
If you would like further information in relation to OSCR’s revised “Meeting the Charity Test” guidance and the impact it might have on your charity, please contact our accredited charity specialists, our Head of Charities, Anne Swarbrick, or Victoria J W Simpson.


This bulletin is for general information only and does not constitute legal, investment or other professional advice. Please contact us should you require advice on any particular legal issue. Anderson Strathern LLP accepts no responsibility for any loss that may arise if reliance is placed on any information or opinions expressed in this bulletin.