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Trusts & Equity (9th edn) Gary Wat 7.5.3.8 The eighth head: the promotion of human rights, conflict resolution or reconciliation, or the promotion of religious or racial harmony, or equality and diversity This set of aims is laudable, but does it look more like a political manifesto than a charitable category? Purposes under this head will surely run the risk of infringing the general prohibition on political charities.153 According to the Charity Commission website, examples of charitable purposes falling under this head include: ‘promotion of human rights, at home or abroad, such as relieving victims of human rights abuse, raising awareness of human rights issues, securing the enforcement of human rights law’; ‘promotion of restorative justice and other forms of conflict resolution or reconciliation’; ‘resolution of national or international conflicts’; ‘mediation’; ‘promoting good relations between persons of different racial groups’; ‘promoting equality and diversity by the elimination of discrimination on the grounds of age, sex or sexual orientation’; and ‘enabling people of one faith to understand the religious beliefs of others’.154 How can such purposes not be political? The Charity Commission’s answer is not wholly convincing: Charities are able to engage in political campaigning in order to further their charitable purposes. Charity law draws a distinction between political purposes and political activities. An organisation which has purposes which include the promotion of human rights by seeking a change in the law, or a shift in government policy, or a reversal of a government decision has (at least in part) political purposes and cannot be a charity. However, the trustees of a charity may nonetheless use political means without jeopardising charitable status. What is important for charitable status is that political means should not be the dominant method by which the organisation will pursue its apparently charitable objects.155 Quite apart from the political nature of the purposes, it is also clear that such aims as the ‘promotion of equality’ and ‘the promotion of religious harmony’ will produce new conflicts requiring resolution. Some questions of public benefit have proved very controversial. According to The Equality Act 2010, s. 193(7), which is not in force at the time of writing, it is not a contravention of

the Act to restrict to persons of one sex participation in an activity which is carried on for the purpose of promoting or supporting a charity. However, restriction according to sexual orientation is another thing. In Catholic Care v. Charity Commission,156 Briggs J held that ‘[a]n organisation which (p. 242) proposes to fulfil a purpose for the public benefit will only qualify as a charity if, taking into account any dis-benefit arising from its modus operandi, its activities nonetheless yield a net public benefit … Thus, a charity which proposed to apply differential treatment on grounds of sexual orientation otherwise than as a proportionate means of achieving a legitimate aim might thereby fail to achieve charitable status …’157 On appeal from this decision, the Upper Tribunal held that the charity in this case had not demonstrated such clear net benefits that exceptional discrimination could be justified. It was acknowledged that ‘[t]he fact that same sex couples could seek to have access to adoption services offered elsewhere tended to reduce somewhat the immediate detrimental effect on them, but it did not remove the harm that would be caused to them through feeling that discrimination on grounds of sexual orientation was practised at some point in the adoption system’.158 The decision of the Upper Tribunal shows how hard it is to balance the problem of systemic discrimination on grounds of sexual orientation against the problem of systemic discrimination on grounds of religion. Part of the Upper Tribunal’s decision was to reject, as too speculative, the Catholic adoption agency’s argument that potential donors might be put off if charity were required to place children with homosexual couples. 7.5.4 Political purposes When the National Anti-Vivisection Society claimed to be exempt from income tax as ‘a body of persons established for charitable purposes only’,182 it failed, because a prime objective of the society was to secure the repeal of the Cruelty to Animals Act 1876 and to see it replaced by an absolute prohibition on vivisection. Courts cannot recognize a political purpose such as this to be charitable; the function of the courts is to implement the will of Parliament, to influence the will of Parliament perhaps, but never to oppose it or to support those who oppose it. Generally speaking, it is for the legislature, not the courts, to determine whether a reform of the law will be for the public benefit.183 It was for this reason that, in 1998, the RSPCA was forced to drop its political support for ‘animal rights’.184 It was also for this reason that a university project to educate the public ‘in the subject of militarism and disarmament’ was denied charitable status; the Court of Appeal held that the project was, in fact, a project to advance the political cause of ‘demilitarisation’.185

Charitable status will also be denied to trusts set up for the purpose of exerting political pressure on foreign legislatures.186 Such trusts are presumed to be detrimental (p. 247) to the public interest, because they might sour diplomatic relations with foreign states. For this reason, student unions are not permited to use their charitable funds to campaign for an end to war in Iraq,187 or similar. It should be noted, however, that, whereas a trust for political purposes is not charitable, it is permissible for a charitable trust to fund political activities ancillary to, and reasonably expected to advance, its charitable purposes.188 So a student union is permited to finance a debate on war in Iraq as part of its general charitable purpose of advancing education; and an organization (English PEN, a branch of International PEN) that promotes peace and human rights through the power of literature and free speech has been granted charitable status189 even though (according to its website) 25 per cent of its funds are devoted to campaigns, including the reform of English libel law on the basis that it ‘has a profoundly negative impact on freedom of expression, both in the UK and around the world’.

Equity & Trusts Concentrate: Law Revision and Study Guide (7th edn) Iain McDonald and Anne Street Section 3(1)(h): the promotion of human rights, conflict resolution or reconciliation, or the promotion of religious or racial harmony, or equality and diversity While the wording clearly indicates the types of purposes intended here, it is important that you understand the law’s approach to ‘political trusts’—a political trust cannot be a valid charitable trust: McGovern v AtorneyGeneral [1982]. Note: this restriction applies to all heads of charity. There are two reasons for this: • It is difficult for the courts to ascertain whether a political objective will be for the public benefit. • As the ultimate administrator of trusts, it would be inappropriate for the courts or the Atorney-General to advocate political changes which may conflict with government policy. Defining ‘political purposes’ McGovern v Atorney-General [1982] sets out a non-exhaustive list of political purposes: • purposes supporting the interests of a particular political party (eg Re Hopkinson [1949]); • purposes which seek to change the law of this or foreign countries (eg National Anti-Vivisection Society v IRC [1948]) (cf Human Dignity Trust v Charity Commission for England and Wales [2014] which held that the financial support of litigation that sought to clarify whether legislation offended against recognized human rights was not political as it did not seek change, only clarification of the status of particular laws); • purposes which seek to change government policy or the decisions of governmental authorities, in the United Kingdom or elsewhere. Compare the following cases: Southwood v Atorney-General [2000] WL 877698 PRODEM, an organization which aimed to educate the public on the evils of war and advocated disarmament, was held not to be charitable. While the court did not object to the promotion of peace as an object, PRODEM was denied charitable status because its central purpose was not to encourage

discussion of how peace might be achieved, but to act directly to bring about a specific change in government policy. (p. 93) Atorney-General v Ross [1986] 1 WLR 252 It was held that the funds of a student union were held on charitable trust. The payment of money to the NUS, a non-charitable organization, was merely ancillary to the acceptable aim of representing the student body. The Charity Commission provides further guidance on the extent to which charities can engage in political activities in ‘CC9: Campaigning and Political Activities by Charities’ (see htps://www.gov.uk/government/publications/speaking-out-guidance-oncampaigning-and-political-activity-by-charities-cc9) (see Figure 6.2): • A trust with directly political purposes cannot be charitable. • However, a trust which engages in political activities as a way of furthering its charitable purposes is more likely to be acceptable.

Cases & Materials on Equity & Trusts (10th edn) Gary Wat D: Political purposes A trust cannot be charitable under any head if its purposes are, directly or indirectly, political. A trust to promote the aims of a particular political party is clearly (p. 172) not capable of being charitable, and atempts to disguise such objectives as educational trusts have generally failed. The definition of political in this context is somewhat wider than the layman might expect, however. Where the objectives involve atempting to bring about a change in the law, they will be considered political and therefore noncharitable, unless change in the law is merely ancillary to the main purpose of the trust. This was one of the reasons for the failure of the National AntiVivisection Society to achieve charitable status in National Anti-Vivisection Society v IRC [1948] AC 31. Lord Simonds gave as the ostensible rationale that it is for Parliament, not the courts, to decide whether any change would be in the public benefit. He also rejected the contention that alteration in the law was merely ancillary to the purposes of the trust, since in order to abolish vivisection it would have been necessary to repeal the Cruelty of Animals Act 1876 (since replaced by the Animals (Scientific Procedures) Act 1986), and replace it with a new enactment prohibiting vivisection altogether. (i) Change in the law of the UK National Anti-Vivisection Society v Inland Revenue Commissioners [1948] AC 31, House of Lords Decision: The National Anti-Vivisection Society was not a charity within the fourth head, because its purposes were not beneficial for the community. The special commissioners for income tax had found that any assumed public benefit in the advancement of morals was outweighed by a detriment to medical science and research. Also, its objects (necessarily requiring an alteration in the law) were political. It followed that the society, not being ‘a body of persons … established for charitable purposes only’, was not exempt from income tax by virtue of the Income Tax Act 1918, s.37(1)(b). LORD SIMONDS (on the question whether the object to be obtained was political): My lords, if I may deal with this second reason first, I cannot agree

that in this case an alteration in the law is merely ancillary to the atainment of a good charitable object. In a sense no doubt, since legislation is not an end in itself, every law may be regarded as ancillary to the object which its provisions are intended to achieve. But that is not the sense in which it is said that a society has a political object. Here, the finding of the Commissioners is itself conclusive. ‘We are satisfied’, they say, ‘that the main object of the society is the total abolition of vivisection … and (for that purpose) the repeal of the Cruelty to Animals Act 1876 [now replaced by the Animals (Scientific Procedures) Act 1986], and the substitution of a new enactment prohibiting vivisection altogether.’ This is a finding that the main purpose of the society is the compulsory abolition of vivisection by Act of Parliament. What else can it mean? And how else can it be supposed that vivisection is to be abolished? Abolition and suppression are words that connote some form of compulsion. It can only be by Act of Parliament that that element can be supplied … Lord Parker uses slightly different language but means the same thing when he says that the court has no means of judging whether a proposed change in the law will or will not be for the public benefit. It is not for the court to judge and the court has no means of judging. The same question may be looked at from a slightly different angle. One of the tests, and a crucial test, whether a trust is charitable, lies in the competence of the court to control and reform it. I would remind your lordships that it is the King as parens patriae who is the guardian of charity and that it is the right and duty of his Atorney-General to intervene and inform the court, if the trustees of a charitable trust fall short of their duty. So too it is his duty to assist the court, if need be, in the formulation of a scheme for the execution of a charitable trust. But, my lords, is it for a moment to be supposed that it is the (p. 173) function of the Atorney-General on behalf of the Crown to intervene and demand that a trust shall be established and administered by the court, the object of which is to alter the law in a manner highly prejudicial, as he and His Majesty’s government may think, to the welfare of the State? … I conclude upon this part of the case that a main object of the society is political and for that reason the society is not established for charitable purposes only. [His lordship continued on the question of benefit:] It is to me a strange and bewildering idea that the court must look so far and no farther, must see a charitable purpose in the intention of the society to benefit animals and thus elevate the moral character of men but must shut its eyes to the injurious results to the whole human and animal creation. I will readily concede that, if the purpose is within one of the heads of charity forming the first three classes in the classification which Lord Macnaughten borrowed from Sir Samuel

Romilly’s argument in Morice v Bishop of Durham (1805) 10 Ves 522, 531, the court will easily conclude that it is a charitable purpose. But even here to give the purpose the name of ‘religious’ or ‘education’ is not to conclude the mater. It may yet not be charitable, if the religious purpose is illegal or the educational purpose is contrary to public policy. Still there remains the overriding question: Is it pro bono publico? It would be another strange misreading of Lord Macnaughten’s speech in [Commissioners for Special Purposes of Income Tax v Pemsel] [1891] AC 531 … to suggest that he intended anything to the contrary. I would rather say that, when a purpose appears broadly to fall within one of the familiar categories of charity, the court will assume it to be for the benefit of the community and, therefore, charitable, unless the contrary is shown, and further that the court will not be astute in such a case to defeat on doubtful evidence the avowed benevolent intention of a donor. But, my lords, the next step is one that I cannot take. Where on the evidence before it the court concludes that, however well-intentioned the donor, the achievement of his object will be greatly to the public disadvantage, there can be no justification for saying that it is a charitable object. If and so far as there is any judicial decision to the contrary, it must, in my opinion, be regarded as inconsistent with principle and be overruled. Note: In Hanchet-Stamford v HM Atorney-General [2008] EWHC 330 (Ch), the court confirmed that the express recognition of the advancement of animal welfare in the Charities Act 2006 did not change the rule that withholds charitable status from political aims such as the aim of changing the law (in this case the organisation had been established to seek an outright ban on performing animals). Question Would Lord Simonds’ reasoning in the first of the above passages apply to a society whose objects were to: (a) campaign against a change in the law which was being proposed by the government? (b) campaign to alter the law overseas? (See (ii) Change in the law overseas, in this subsection.)

Notes 1. On the question of political objects, see further McGovern v AtorneyGeneral [1982] Ch 321 (discussed in greater detail in this section), where similar principles were applied to a body (Amnesty International) whose objects included altering the laws of overseas jurisdictions, and Re Koeppler’s WT [1986] Ch 423 (discussed in greater detail in this section), where alteration in the law was only an incidental object, and was not a bar to the body being an educational charity. 2. On the question of public benefit, this was treated as a question of fact, and if an object is not for the benefit of the public it cannot be charitable under any head (although Lord Simonds conceded in the last passage set out in our discussion of National Anti-Vivisection Society v Inland Revenue Commissioners that, if the object fell within one of the first three heads, public benefit would usually be assumed). Lord Simonds also recognised (at 74) that public benefit is not static, but may alter over time. (p. 174) 3. It follows, therefore, that any trust whose main object includes a change in the law of the United Kingdom cannot be charitable (in Re Bushnell [1975] 1 WLR 1596). (ii) Change in the law overseas Lord Simonds’ reasoning in National Anti-Vivisection Society v IRC applies only to changes to the law in the United Kingdom, but in McGovern v AtorneyGeneral [1982] Ch 321, Slade J frustrated Amnesty International’s atempt to procure charitable status for some of its activities by creating a trust of those parts which were thought most likely to be accepted as charitable, on the ground that a main object of the trust was to secure the alteration of the laws of foreign countries. McGovern v Atorney-General [1982] Ch 321 Facts: The objects of Amnesty International included, among other things, atempting to secure the release of prisoners of conscience and procuring the abolition of torture or inhuman or degrading treatment or punishment. The trustees applied to the Charity Commissioners for registration as a charity under the Charities Act 1960, s.4 (now Charities Act 2011, Part 4), and the Commissioners refused. Amnesty appealed. Held: Because of the inclusion of the political objects (set out in the Facts), Amnesty International was not a charitable body: a direct and main object of the trust was to secure changes in the laws of foreign countries. The decision

represents an extension of the principles laid down in the House of Lords in National Anti-Vivisection Society v IRC [1948] AC 31. SLADE J: I now turn to consider the status of a trust of which a main object is to secure the alteration of the laws of a foreign country. The mere fact that the trust was intended to be carried out abroad would not be itself necessarily deprive it of charitable status. A number of trusts to be executed outside this country have been upheld as charities, though the judgment of Evershed MR in Camille and Henry Dreyfus Foundation Inc. v IRC [1954] Ch 672 at 684–5 illustrates that certain types of trust, for example trusts for the setting out of soldiers or the repair of bridges or causeways, might be acceptable as charities only if they were to be executed in the United Kingdom. The point with which I am at present concerned is whether a trust of which a direct and main object is to secure a change in the laws of a foreign country can ever be regarded as charitable under English law. Though I do not think that any authority cited to me precisely covers the point, I have come to the clear conclusion that it cannot. I accept that the dangers of t...