What is a charitable purpose trust?
A recognised type of trust despite the absence of ascertainable beneficiaries because they are for the public benefit
What is a non-charitable purpose trust?
- A type of trust recognised as valid in specific, exceptional circumstances.
- These exceptions are known as the Endacott exceptions
What are the key benefits of a trust having charitable status?
- No requirement to comply with the beneficiary principle
- More flexible rules on certainty of objects
- No limit on their duration
- A rule known as cy-pres doctrine - allows the trust property to be applied for other charitable purposes even if the specific trust fails
- Tax benefits
What are the key differences between charitable and non-charitable trusts?
- Enforceability
- Certainty of objects
- Perpetuity
What are the two relating rules to perpetuity?
1.) The rule against remoteness of vesting: Applies to trusts with beneficiaries or charitable purposes as their objects
2.) The rule against inalienability: Only applied to non-charitable purpose trusts
What three requirements must a trust meet to be a charitable purpose trust?
1.) Be for a charitable purpose
2.) Satisfy the public benefit test
3.) Be wholly and exclusively charitable
What are the rules in relation to certainty of purpose for charitable purpose trusts?
- It is sufficient that there is an intention to apply property for a charitable purpose
- If there is uncertainty as to how intention can be carried out, trustees can direct that the property be applied for such charitable purposes as they select
- Court will strive to resolve any uncertainty and hold the trust valid once it has established charitable intent
- Charity Commission or the court can provide a ‘scheme’ to specify the charitable purposes the property should be applied to
What are the four ‘traditional’ heads of charity that were developed through case law with reference to the preamble to the 1601 act?
- The relief of poverty
- The advancement of education
- The advancement of religion
- Other purposes beneficial to the community
What does s2 Charities Act 2011 provide?
A charitable purpose is a purpose which:
- Falls within s3(1); and
- Is for the public benefit
What are the 12 heads of charity laid out in s3(1)?
1.) The prevention or relief of poverty
2.) The advancement of education
3.) The advancement of religion
4.) The advancement of health and saving lives
5.) The advancement of citizenship or community development
6.) The advancement of the arts, culture, heritage or science
7.) The advancement of amateur sport
8.) The advancement of human rights, conflict of resolution or reconciliation or the promotion of religious or racial harmony or equality and diversity
9.) The advancement of environmental protection or improvement
10.) The relief of those in need because of youth, age, ill-health, disability, financial hardship or other disadvantage
11.) The advancement of animal welfare
12.) The promotion of efficiency of the armed forces of the Crown or of the efficiency of the police, fire and rescue services or ambulance services
What are the interpretations of the meaning of poverty?
- Means ‘going short’
- Does not mean destitution
- Is a relative concept
- The purpose must not benefit the rich
- Poverty can be temporary
- Poverty can be inferred
What else has been confirmed to be under the umbrella of advancement of education?
- Support of learning such as scholarships and funding of lectureships
- Ancillary organisations in educational institutions such as SU’s
- Dissemination of knowledge
What other organisations have been recognised by The Charity Commission to qualify under the advancement of education heading?
Non-exhaustive:
- Museums, galleries, libraries, scientific institutes
- Pre-schools, playgroups, summer schools, homework clubs
- Parent teacher associations, teacher training orgs or exam boards
- Orgs providing life skills such as DofE, Scouts, Guides
What does s3(2)(a) CA 2011 provide ‘religion’ includes?
- A religion which involves belief in more than one god; and
- A religion which does not involve a belief in a god
What other purposes have been found to fall under the head of ‘advancement of religion’?
- Support of a religious order such as monastery or convent (Re Banfield)
- Public masses celebrating the dead (Re Hetherington)
- The repair of churchyards or burial grounds (Re Douglas)
What is included under the head of ‘advancement of health’?
Prevention or relief of sickness, disease, or human suffering, as well as the promotion of health
What is included under the head ‘citizenship/community development’?
- Rural and urban regeneration
- The promotion of civic responsibility, volunteering, the voluntary sector or the effectiveness or efficiency of charities
What does the CA 2011 define as ‘sport’ in s3(2)(d)?
Sports or games which promote health by involving physical or mental skill or exertion
What must a charitable trust under the head ‘advancement of human rights’ make sure it DOES NOT do?
Must not stray into political objectives such as seeking to procure changes to the law
What is included in the Charity Commission guidelines under the ‘advancement of human rights’ head?
- Raising awareness of human rights issues, relieving the victims and securing the enforcement of human rights laws
- The promotion of restorative justice and other forms of conflict resolution or reconciliation
What is included under the head ‘environmental protection’?
Includes both protection and improvement of the environment
What has case law upheld regarding the efficiency of public services
- Fund for the promotion of physical fitness
- The provision of a library
