Since its formal establishment in 2006, OSCR has provided a great deal of material which is of help to the Scottish charity sector as a whole. Some of that material came from reviews of particular parts of the sector; other lessons have flowed from individual inquiries where key principles of wider application became evident.

Fee-charging schools

One of the highest profile areas of OSCR’s work over the last decade has been in relation to fee-charging schools. The concern was that schools which charged fees might be applying unduly restrictive conditions on access to the benefits which they provide, with the potential consequence that such schools might fail the public benefit test.

OSCR reviewed the charitable status of 52 schools and the vast majority of them were found to pass the public benefit test. Only 10 schools initially failed the charity test. OSCR issued directions to schools considered to fail the test and they all took necessary remedial action, with the result that there are now no non-compliant fee-charging schools in Scotland. OSCR published a detailed report on its review of fee-charging schools in 2014. Some of the principles around facilitated access and concessionary or bursary arrangements are of interest to a wide range of charities and not just to the schools sector itself.


Another major review undertaken by OSCR, but which was considerably more under the radar than the schools review, was in relation to Arm’s Length External Organisations (“ALEOs”). This type of charity was perceived to be at risk given the potential for control and influence to be exerted by local authorities in the charities’ activities.

In its 2015 report, OSCR concluded that almost all of the ALEOs reviewed were governed adequately and had independent trustees on their boards. Recommendations designed to improve governance further, such as by having a memorandum of understanding in place with local authorities, ensuring that councillor trustees are selected for their skills, and implementing robust internal procedures, are of wider application where charities are faced with issues around control and the risk of inherent conflicts of interest.


One of OSCR’s key roles is to investigate concerns raised about charities. It has the statutory power to conduct inquiries and, if necessary, to issue directions and recommendations, to suspend trustees and/or to remove charities from the Register. OSCR regularly publishes reports on findings from its inquiries and the outcomes often contain lessons for the whole sector which are useful for charities, trustees and professional advisors alike.

A few key inquiries over the past 10 years have resulted in reports which the sector often still refers to as a reference point for best practice. These include:

  • The Rangers Charitable Foundation (2013) in relation to the use/transfer of charitable funds from a fundraising event, trustees’ decision-making processes and conflict of interest;
  • The Sick Kids Friends Foundation (2010) in relation to fundraising campaigns, use of charitable funds against expenditure and internal governance structures; and
  • One Plus: One Parent Families (2008) in relation to financial difficulties suffered by a failed charity, its response to the funding environment which led to it being placed into liquidation and critical governance issues including the fundamentals of charity trustee duties.


The Scottish Charity Appeals Panel (SCAP) is an independent body created to hear appeals against decisions taken by OSCR. SCAP has dealt with only a handful of appeals since its inception, the most significant being the appeal of Saint Margaret’s Children and Family Care Society against an OSCR direction. The case provides an interesting commentary on issues around the charity test and the Equality Act particularly in the context of the protected characteristics of religion or belief and sexual orientation. Although that decision turns on its own facts, it sets out a number of issues which charities ought to have regard to when considering whether or not they discriminate in the provision of their charitable benefits, and whether such discrimination can be justified.