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Charitable purpose

What you need to know if you are applying to Paul Hamlyn Foundation and you are not a registered charity.

On this page

Why we fund work that has a charitable purpose

We are a charity, which means that all the work we fund has to have a charitable purpose. 

In many cases we do this by funding organisations that are registered charities. However, we know that the charitable structure model does not serve all of the organisations, groups and individuals that we want to fund who are advancing social justice. 

Therefore, we have made a decision to fund non-charities. We can only do this if we can be confident the grants we make are used exclusively for charitable purpose and for public benefit. The Charity Commission publishes detailed guidance on this.

What is ​‘charitable purpose’?

Charitable purpose has a specific definition. The fact that you do not make a profit does not automatically mean your work has charitable purpose. Social purpose is not the same as charitable purposes – for example a project ​‘improving life chances through sport’ could include professional sport and may not be charitable. 

Work that has charitable purpose has two parts;

  1. The work falls within the ​‘descriptions of charitable purposes’ in the Charities Act; and
  2. It is for ​‘the public benefit’

What are the charitable purposes?

There are 13 ​‘descriptions of charitable purposes’. See below for the 13 categories the Charity Commission uses to define charitable purpose.

What is public benefit?

Public

The work is of benefit to the public or to a section of the public (e.g. people who live in a geographical area or share a characteristic such as being disabled or experience racism) 

There can be a fee for the work but it needs to be reasonable and necessary to carry out the aims. However, if the level of the fees excluded people from the opportunity to benefit because they cannot pay the fees, then this would not be considered public benefit. In particular, people in poverty must not be excluded from the opportunity to benefit. 

There cannot be any private benefit to individuals who are doing the work unless it is necessary for the work to be done. For example, an organisation may need paid members of staff; in this case the salary/​rate would need to be reasonable i.e. benchmarked against other comparable roles. 

Benefit

The benefit must flow from the purpose of the work, for instance, in the case of the advancement of education, the benefit is enhanced knowledge and understanding for the young people receiving education. 

You must be able to demonstrate the benefit. For example, you may able to provide evidence through a survey or feedback from participants. If your organisation is recently established, you could provide information on how you intend to demonstrate the benefit flowing from the purpose. 

The work has to be beneficial and not cause harm.

How can I demonstrate charitable purpose?

In each of our funds, you will demonstrate how your work has a charitable purpose in different ways during the application process. These might include explaining which is the 13 charitable purposes your work falls under, or sharing financial information.

As an example, here is how you would demonstrate charitable purpose at each stage of applying to our Ideas and Pioneers Fund.

First stage

You would:

  • Tell us which of the charitable purposes does your work fall under
  • Share some financial information, including your annual income, for some organisations
Second stage

You would:

  • Share a detailed budget of how you would use the grant
  • Describe the charitable purpose and public benefit of the work the grant will support
  • Share how you will ensure that our funding is used exclusively for the agreed charitable purpose 
  • Share your most recent statutory accounts which have been audited or independently examined if you are an organisation
At the end of the grant

You would:

  • Share reports that demonstrate what you spent the grant on and how the work that you did with the grant has charitable purpose and public benefit.

How do you describe charitable purpose and public benefit?

There are four key areas needed to describe the charitable purpose of your work:

  • what outcomes are going to be achieved 
  • how you are going to achieve the outcomes 
  • who is going to benefit 
  • where it will take place
Examples of descriptions

For example:

  • To advance the health (what) of under 16s (who) living in Greenock (where) by providing fitness sessions in schools (how).
  • The promotion of equality and diversity (what) in the United Kingdom (where) for the benefit of the public (who) by conducting or commissioning research on equality and diversity issues and publishing the results to the public (how).
  • To promote art (what) for the public benefit of young carers (how) in Lambeth (where) through the creation of theatre performance (how) with a specific focus on mental health and the impact of mental health. 

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