It is right to define what we mean by charity

Most of us have a hazy idea of what a charity is. People tend to assume that Greenpeace and Amnesty International are charitable organisations but independent schools and the Church of England are not. In fact the opposite is true. Amid this confusion, we welcome the Government's effort to clarify matters with its draft Charities Bill, published yesterday.

Most of us have a hazy idea of what a charity is. People tend to assume that Greenpeace and Amnesty International are charitable organisations but independent schools and the Church of England are not. In fact the opposite is true. Amid this confusion, we welcome the Government's effort to clarify matters with its draft Charities Bill, published yesterday.

In place of the forest of outdated charity law that has grown up over the past 400 years, the Home Office hopes to apply a simple test of whether an organisation can be considered a charity (and thus eligible for the tax breaks that go with it). To achieve charitable status, an organisation must now "work towards the public benefit". This vague concept will be given shape by a commission that will evaluate each organisation on a case-by-case basis.

The most controversial result will be that "public" schools, which enjoy charitable status thanks to their ancient role in educating the poor, will have to justify their tax breaks, probably by pooling some of their resources with local state schools. There is a case for giving private schools tax breaks specifically targeted towards any bursaries they have for poorer students, but the Government has missed a chance to strip these institutions of their general charitable status. It should be remembered that most command very large fees for their services. Some private hospitals, such as the Nuffield group, have charitable status too, as a result of their history of caring for the sick before the NHS. But they should not be allowed to keep their charitable status if they choose to compete with other less-privileged private hospitals for lucrative contracts.

It is regrettable that this will mean more red tape, but that is a price worth paying to rationalise the system. And the provisions in the Bill which allow charities to merge and collaborate more easily are encouraging; as is the proposed widening of charitable status to include groups that campaign for human rights and environmental protection. We hope these measures will help to improve the fortunes of hard-working charities, which often struggle with Britain's inconsistent philanthropic culture. Charity must, at last, start at home.