Charities

! Advantages of charitable status

! Definition of Charity
! Variety of Charitable Purposes
! Public Benefit
! Benefit v Detriment
! Section of the Public
! Charity Commission Guidance




Privileges of Charitable Status


! They are exempt from the beneficiary principle

! They are partially exempt from the certainty requirements

! They are exempt from the rule against perpetual duration

! Tax exemptions: https://www.gov.uk/charities-and-tax/tax-reliefs

! Re Shaw’s Will Trusts [1952] Ch 163





Charitable Status


! Definition of charitable purposes

! Heads of Charity

! Public Benefit.


Definition – Charities Act 2011


s 1 Meaning of “charity”
! (1)For the purposes of the law of England and Wales, “charity” means an
institution which—
! (a)is established for charitable purposes only, and
! (b)falls to be subject to the control of the High Court in the exercise of its
jurisdiction with respect to charities.

s 2 Meaning of “charitable purpose”

! (1)For the purposes of the law of England and Wales, a charitable
purpose is a purpose which—
! (a)falls within section 3(1), and
! (b)is for the public benefit (see section 4).


Definitions


! “No comprehensive definition of legal charity has been given either by the legislature or in
judicial utterance, there is no limit to the number and diversity of ways in which man will
seek to benefit his fellow men.”
Baddeley v IRC [1955] AC 572, 583, per Viscount Simonds.

! “The relief of aged, impotent and poor people; the maintenance of sick and maimed
soldiers and mariners, schools of learning, free schools and scholars in universities; the
repair of bridges, ports, havens, causeways, churches, sea banks and highways; the
education and preferment of orphans; the relief, stock or maintenance for houses of
correction; the marriage of poor maids, the supportation, aid and help of young tradesmen,
handicraftsmen and persons decayed; the relief or redemption of prisoners or captives; the
aid or ease of any poor inhabitants concerning payment of fifteens, setting out of soldiers
and other taxes.”
The Preamble to the Statute of Charitable Uses 1601
Scottish Burial Reform and Cremation Society v Glasgow City Corp [1967] AC 447
Vancouver Regional Freenet Association v Minister of National Revenue (1996) 137 DLR 406
Lord Macnaghten’s classification in Commissioners for
Special Purposes of Income Tax v Pemsel [1891] AC
531.


! The relief of poverty

! The advancement of education
! The advancement of religion
! Other purposes beneficial to the community.
s 3 Descriptions of Purposes

(a)the prevention or relief of poverty;
(b)the advancement of education;
(c)the advancement of religion;
(d)the advancement of health or the saving of lives;
(e)the advancement of citizenship or community development;
(f)the advancement of the arts, culture, heritage or science;
(g)the advancement of amateur sport;
(h)the advancement of human rights, conflict resolution or reconciliation or the promotion of religious or racial harmony or
equality and diversity;
(i)the advancement of environmental protection or improvement;
(j)the relief of those in need because of youth, age, ill-health, disability, financial hardship or other disadvantage;
(k)the advancement of animal welfare;
(l)the promotion of the efficiency of the armed forces of the Crown or of the efficiency of the police, fire and rescue services
or ambulance services;
(m)any other purposes—
(i)that are not within paragraphs (a) to (l) but are recognised as charitable purposes by virtue of section 5 (recreational and
similar trusts, etc.) or under the old law,
(ii)that may reasonably be regarded as analogous to, or within the spirit of, any purposes falling within any of paragraphs (a)
to (l) or sub-paragraph (i), or
(iii)that may reasonably be regarded as analogous to, or within the spirit of, any purposes which have been recognised,
under the law relating to charities in England and Wales, as falling within sub-paragraph (ii) or this sub-paragraph.
Charitable Purposes

(a) Prevention or relief of poverty

! Testator/settlor must clearly intend to relieve poverty – this
will not be implied:
! Attorney-General v Forde [1932] NI 1 – widows – not
charitable.
! Re Gosling (1900) 16 TLR 662 – worn-out clerks – charitable.
! Re Young [1951] Ch 344 – distressed gentlefolk – charitable.
(b) Advancement of education
! Re Hopkin’s WT [1965] Ch 669
Charitable Purposes

(c) Advancement of religion

! Thornton v Howe (1862) 31 Beav 14
! Bowman v Secular Society [1917] AC 406
! Re South Place Ethical Society [1980] 1 WLR 1565
! Hodkin v Registrar-General of Births, Deaths and Marriages [2013] UKSC 77
! ‘I would describe religion in summary as a spiritual or non-secular belief system, held by a
group of adherents, which claims to explain mankind's place in the universe and
relationship with the infinite, and to teach its adherents how they are to live their lives in
conformity with the spiritual understanding associated with the belief system. By spiritual or
non-secular I mean a belief system which goes beyond that which can be perceived by the
senses or ascertained by the application of science. ……….. Such a belief system may or
may not involve belief in a supreme being, but it does involve a belief that there is more to
be understood about mankind's nature and relationship to the universe than can be gained
from the senses or from science. I emphasise that this is intended to be a description and
not a definitive formula’ Lord Toulson
Charitable Purposes
(c) Advancement of religion
Charity Commission for England and Wales. The Temple of the Jedi Order – Application for
Registration. Decision. 16 December 2016.
S3(1)(c):
! “…a religion based on the observance of the Force, the ubiquitous and metaphysical power that a
Jedi (a follower of Jediism) believes to be the underlying, fundamental nature of the universe.”
S3(1)(m):
! · Clear and certain objects relating to the promotion of Jediism which incorporate a coherent
definition identifying the beliefs, principles and practices.
! · The beliefs, principles and practices are accessible to the public and capable of being understood
and accepted and applied or rejected by individuals according to their individual choice or
judgement from time to time.
! · Moral improvement is central to the beliefs and practices.
! · Evidence of directly promoting moral improvement within society generally.
! · Evidence of a positive beneficial impact on the wider society not simply the followers.
! · Evidence to show it is not an inward focussed organisation benefitting members only.
! “In relation to charities advancing religion and moral or spiritual belief systems, one generally
expects to see a wide public benefit going beyond the members of the belief system concerned.
The benefits, tangible or intangible, must be available to the public at large or to a sufficient section
of the public. The purpose must not simply be for the benefit of the followers themselves but it
should be outward looking extending to the public.”
Charitable Purposes
(g) Advancement of amateur sport
! IRC v Baddeley [1955]
! Guild v IRC [1992]
! Re Nottage [1885] 2 Ch 649
! Re Dupree [1945] Ch 16
! “One feels, perhaps, that one is on a slippery slope. If chess, why not
draughts? If draughts, why not bezique, and so on, through to bridge
and whist, and, by another route, to stamp collecting and the acquisition
of birds’ eggs?” per Vaisey J.
(h) Advancement of human rights, conflict resolution or reconciliation or the
promotion of religious or racial harmony or equality and diversity
! National Anti-vivisection Society v IRC [1948]
! McGovern v AG [1982] Ch 321
! R v Radio Authority ex parte Bull [1998] QB 294
! The Human Dignity Trust v The Charity Commission for England
and Wales [2014] WL 8663481




Charitable Purposes


! A body established for political

purposes cannot be charitable.

! Charities are prohibited from engaging

in party political activities, but may
engage in campaigning in furtherance of
their charitable objectives, subject to CC
guidance.




s 4 The Public Benefit Requirement




! (1)In this Act “the public benefit requirement” means the

requirement in section 2(1)(b) that a purpose falling within
section 3(1) must be for the public benefit if it is to be a
charitable purpose.
! (2)In determining whether the public benefit requirement is
satisfied in relation to any purpose falling within section 3(1), it is
not to be presumed that a purpose of a particular description is
for the public benefit.
! (3)In this Chapter any reference to the public benefit is a
reference to the public benefit as that term is understood for the
purposes of the law relating to charities in England and Wales.




Public Benefit


a) It must be clear what the benefits are

b) The benefits must be related to the aims

c) Benefits must be balanced against any detriment

or harm

National Anti-Vivisection Society v IRC [1948] AC 31

The Preston Down Trust


‘Benefit must be to the public, or a section of the public’


a) Beneficiaries must be appropriate to the aims

b) Where benefit is restricted to a section of the public,

it must not be unreasonably restricted either by
geographical location or the fact fees are charged

c) People in poverty must not be excluded

d) Private benefits should be incidental

Independent Schools Council v Charity Commission for
England and Wales [2011] UKUT 421 (Upper Tribunal)




(i) establish that the charitable purpose is of

benefit to the community

(ii) beneficiaries must be sufficiently

numerous to form a ‘section of the public’
Re Hummeltenburg [1923] 1 Ch 237
Public Benefit: the ‘personal nexus test’




(i) the beneficiaries must not be numerically negligible

(ii) the quality which distinguishes them from other members of the community must not
depend on their relationship to a particular individual

Re Compton [1945] Ch 123.

Oppenheim v Tobacco Securities Trust Co. Ltd [1951] AC 297 (HL)
Dingle v Turner [1972] AC 601 (HL)
Attorney General v Charity Commission [2012] WTLR 977 (Upper Tribunal)
! Confirmed that the existence of a ‘personal nexus’ would not prevent such gifts as
being charitable;
! Would not necessarily be charitable – depends on the facts of the case.


Charity Commission Guidance 2014


Principle 1 – ‘There must be an identifiable benefit or benefits’

! Under principle 1, there are two sub-principles:
! a purpose must be beneficial - this must be in a way that is identifiable and capable of
being proved by evidence where necessary and which is not based on personal views
! any detriment or harm that results from the purpose (to people, property or the
environment) must not outweigh the benefit - this is also based on evidence and not on
personal views
Principle 2 – ‘Benefit must be to the public, or a section of the public’ (Charity
Commission Guidance Part 5 & 6)
! Within the second principle, the guidance indicates that there are four sub-principles in
determining whether an organisation’s aims meet the ‘public’ principle of the public benefit
requirement. These are:
! a) benefit the public in general, or a sufficient section of the public;
! b) not give rise to more than incidental personal benefit.