There has been much recent discussion of the charitable status of independent schools (see e.g. B. Sloan, “‘Private’ Schools, their Charitable Status and their Property Rights: Legal Barriers to Attenuation” (2021) 137 LQR 228). Despite earlier more radical proposals, having reached Government, Labour are apparently content merely to remove the exemptions for VAT for independent schools’ educational services and business rates relief (see e.g. https://educationhub.blog.gov.uk/2024/11/01/vat-private-schools-everything-you-need-to-know/).
Mary Synge’s extremely valuable book, The University-Charity, examines the charitable status of another much-discussed form of educational institution. The volume “looks at universities through a charity law lens and investigates how far charity law might provide a valuable response to many of the issues currently facing the sector” (p. 2). At times, the analysis is provocative, pulling few punches, and it is telling that Synge chose to self-publish the book because two publishers offered contracts containing clauses requiring the author to indemnify them in respect of any complaint or allegation relating to the book.
Chapter 2 provides “a chronological outline of the university sector’s evolution” (p. 20), focusing on both institutions and the key legislative and policy developments. In deftly relating the complex history of the sector, Synge highlights the state’s increasingly hands-on role. The focus of this chapter, and of the volume as a whole, is generally on all higher education providers (in England) that are designated as or regard themselves as charities, excluding profit-making institutions and other higher education providers.
The next chapter considers whether universities are charities at all, thereby querying what the author concedes is a “necessary premise of the book” (p. 62). During a rich discussion of charity law, the author acknowledges several important factors apparently putting the charitable status of universities beyond doubt, not least the reference to “schools of learning and scholars is universities” in the “all-important” (p. 91) preamble to the Charitable Uses Act 1601. Synge, however, convincingly defends asking the question of whether universities are in fact charitable. Despite this insight, Synge ultimately shies away from answering the central question, at least “unequivocally, or in respect of each and every university” (p. 94). She does at least identify what the most significant obstacles to charitable status for a university might be, which are most pertinent to post-1992 institutions. Ultimately, and pragmatically, Synge proceeds on assumption that a great number of non-profit universities are charities.
Chapter 4 explores the duty to act in the best interests of the charity, specifically the extent to which a university’s charitable purposes sit at the heart of its decision-making processes. Synge postulates that many criticisms of universities may reflect a failure to give those purposes the priority that charity law demands. She concludes that some practices within universities may “indicate the pursuit of alternative goals or purposes that undermine, or conflict with, the best interests of the charity” (p. 170). She identifies a real danger that a focus on maximising growth in income or student numbers and the use of target-driven metrics, with most processes and practices driven by university management, “diminish the public benefit that is inherent in the purposes of advancing education & research” (p. 170).
Chapter 5 concerns the controversial topic of “Executive Remuneration”. Synge sets out to ask whether charity law can contribute to the debate, notwithstanding her concession that “on the discrete issue of executive remuneration, ‘legal specifics’ are in short supply” (p. 173). Following a very detailed discussion, she concludes that charity law does offer an antidote to concerns about executive pay, in the sense that: “‘excessive’ executive pay constitutes ‘misconduct and mismanagement’”, “failure to avoid a conflict of interest is a breach of fiduciary duty”, and “private benefits must be reasonable and necessary” (p. 236). She acknowledges, however, that a lack of publicly available information creates difficulty in trying to apply a “charity law lens” (p. 236) to executive pay. She considers charity law to have been overlooked or neglected in this context, while being unsure whether that has been caused by ignorance, misunderstanding or the fact that enforcement is unlikely, and calls for a renewed focus on charity law.
Chapter 6 on governance begins by noting the apparently (and broadly) diminished academic participation in the process and sets out to ask what charity law might contribute to debates about “the culture of managerialism that appears to characterise many English universities” (p. 240). The overall argument is that the “corporate model” of university governance “hinders compliance with the overriding duty to act in the best interests of the charity” (p. 240). The author does correctly note however, that the universities of Oxford and Cambridge, and their constituent Colleges and Halls, “continue to enjoy a strong tradition of academic self-government, in contrast to most other English universities” (p. 249). The chapter constitutes an illuminating discussion about the current nature of university governance and how it has changed over time.
The next chapter is the first of several that switch to the more external question of “the significance of charitable status in terms of relations between universities and the State” (p. 288). Chapter 7 itself concerns “the proposition that charities are, and must remain, independent of the State” (p. 288). Following an analysis of the law, the author asserts that “the common law ‘hallmark of independence’ is a vital and integral part of both charitable status and the overriding duty” to act in the best interests of the charity (pp. 333–34). The author is anxious that “conditions should not be imposed, interpreted, or enforced to such an extent that they remove the vital independence of the University-Charity, or make the exercise of the independence impossible” (p. 334). She is concerned that, “[w]hether deliberate or not … the all-encompassing regulation of diverse ‘higher education providers’ dilutes, ignores or even obliterates the distinctiveness of those that are charities” (p. 334).
Chapter 8 concerns the public benefit requirement, core to all charities. The author considers it “striking and curious” that “universities do not appear to have received the same attention” as independent schools in this respect (p. 337; see also above), despite the ostensible similarities between the two types of institution. One of the chapter’s aims is to seek to “understand this apparent discrepancy” (p. 337). The chapter begins with a summary of Synge’s interpretation of the public benefit requirement as it applies to fee-charging charities. She emphasises that the fact that universities charge high fees “does not deprive them of charitable status” and that universities are not “required” “as a matter of charity law” “to make provision for the poor” (p. 341) or other underrepresented groups. Part II contrasts the public benefit requirement with the “social benefit analysis”. Here, Synge criticises the Charity Commission’s guidance (even that issued after the decision in Independent Schools Council v Charity Commission for England and Wales [2011] UKUT 421 (TCC), [2012] Ch 214, noted [2012] CLJ 45) for suggesting, contrary to her analysis of the legal position, that a charity must make provision for those not easily able to afford its fees to access its services. On Synge’s analysis, “[i]t is hard to resist the conclusion that the interpretation put forward by the Commission, and later tweaked by the Tribunal [in ISC], bore a far greater resemblance to policy than it did to law” (p. 357). Finally, the chapter investigates the (lack of) application of the social benefit analysis to universities, as compared to its application to independent schools. This is notwithstanding the fact that (on Synge’s account) the social benefit analysis “has no basis in law”, since “for as long as the social benefit analysis is understood (or is held out) to represent the law”, “there is every reason to say that it should be applied to the University-Charity in the same way as to other fee-charging charities” (pp. 372–73). The argument is that “the stark difference in the regulatory approach” as between independent schools and universities “can be explained by differing policy objectives applicable to them” (p. 337).
Chapter 9 concerns “Holding the University-Charity to Account”. Having dismissed the general utility of non-regulatory options, it moves to consider state regulation in the form of the framework now contained in the Charities Act 2011 and “interrogates the effect of that framework in the university sector, where some universities are registered – and overseen by the Charity Commission … – and others remain exempt, overseen by the Office for Students (OfS) as their ‘Principal Regulator’” (p. 374). Synge considers it “some comfort … that a statutory regulator exists to identify and investigate potential misconduct and mismanagement, to take remedial and protective action accordingly, and to approve accountability” (p. 411). Synge nevertheless opines that the reforms to the regulatory framework “were less than successful” and that “any suggestion that all not-for-profit universities are now effectively regulated as charities appears unconvincing” (p. 411). In particular, “the fact that most universities are exempt … results in a two-tier regime which is distinctly unsatisfactory” (p. 411). She boldly accuses the OfS of having “seemingly little appreciation of, or interest in, the particular law (or its compliance) that it is expected to promote” (p. 411). The result is that the University-Charity “is not yet receiving the regulatory attention that the 2006 reforms both invited and intended” (p. 412).
The last substantive chapter addresses whether the University-Charity can be sold or changed to a for-profit institution, prompted by the real-life examples of the (then) College of Law and Regent’s University. These originally charitable institutions were the subjects of “‘sales’ … to private equity firms” (p. 413). Synge begins by analysing the available details of each transaction. She then considers the applicable legal framework where “the original charity transfers its … assets to a for-profit purchaser, and applies the proceeds of sale to its original or amended charitable purposes in a different way’’ (pp. 420–21). Following extensive discussion, Synge concludes that “the proposition that charity law has no objection to a sale of a charity’s undertaking, provided the proceeds are applied to charitable purposes, fails to take into account the full reach and complexity of charity law” (p. 459). Such an outcome, in her view of the law, is acceptable only in “extremely limited” circumstances (p. 459). She calls for “greater transparency” over the Charity Commission’s decisions which facilitated the two transactions she analysed and “clarification of the legal basis on which they were made” (p. 460).
In the concluding chapter, Synge asserts that charity law “offers a new perspective, which creates different expectations and invites different forms of scrutiny” (p. 462). Inter alia, on Synge’s account, charity law “both justifies and calls for” something different from, for example, “gaming the REF” and “‘satisfying’ students”, encouraging a “markedly different culture and ethos” (p. 463). It “demands the focus on a university’s purpose that many contributors to the university literature are advocating, and it discourages the pursuit of preferred or re-imagined missions” (p. 485). Synge also opines that it “protects the University-Charity from encroachment by the State, and distinguishes it from both the public (governmental) sector and the private (business) sector” (p. 462). As much as the book might be unpopular within at least aspects of the university sector, she hopes that “universities might warm to the legal basis that charity law provides for independence from government intrusion” (p. 486).
As a result of her account, Synge seeks to “urge reflection and debate over possible changes in practice, policy and law” (p. 467). She pragmatically concedes, however, that “it is difficult to envisage the government or the OfS embracing wholeheartedly the content of the book, and the possible inconvenience of recognising – and relinquishing a measure of control over – a distinct University-Charity sector” (p. 485). Of particular interest to the academic Equity lawyer (however much Synge considers treating charity law as a small part of an Equity module as “entirely inadequate” (p. 475)), is the contention that the statutory definition of charity is “flawed”, in part because of its “failure to reflect more clearly the characteristics which distinguish charity from government” (p. 481). While considering it “premature” “to suggest how the statutory definition should be amended” (p. 481), the author emphasises that the relevant discussion “must take place within the much broader question of what constitutes charity, or should constitute charity, which was by no means answered (or rendered obsolete) by the statutory definition” (pp. 481–82).
Synge’s work is an impressively detailed discussion of a very important issue, even if it will make neither light nor comfortable reading for many working within the university sector. In any event, its readership ought not to be limited to academics with an interest in charity law per se. At least one other reviewer has questioned the appropriateness of Synge’s “faith in the inherent value of charity law as an internalisable framework for the sector” (J. Picton (2024) 87 MLR 240, 242) and Synge may at times inflate the utility of that law. Time will tell whether this book has any practical influence, but that does not detract from the academic value of Synge’s project as the relationship between charity and education looks set to be a continuing matter of debate.
