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CharitiesCommissioner of ICT v Pemsel [1891]Lord MacNaghten grouped charitable purposes into four divisions which provided a convenient framework:They are:(1) the Relief of poverty (2) the advancement of education (3) the advancement of Religion; and (4) other purposes beneficial to education to the...

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Charities

Commissioner of ICT v Pemsel [1891] Lord MacNaghten grouped charitable purposes into four divisions which provided a convenient framework: They are: (1) (2) (3) (4)

the Relief of poverty the advancement of education the advancement of Religion; and other purposes beneficial to education to the community within the spirit and intendment of the preamble (“the fourth head”)

Charitable purposes A purpose will be charitable if it comes within one of the headings listed in s.3(1) of the Charities Act 2011. There are 12 specific headings: (a) the prevention or relief of poverty; (b) the advancement of education; (c) the advancement of religion; (d) the advancement of health or the savings 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, conflicts 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, the fire and rescue services or ambulance services; and a final catch all heading (m)

any other purposes.

These are defined as:

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(i) (ii)

any purposes that are not listed in the Act but are recognised as charitable purposes under existing charity law: and any other purposes that may reasonably be regarded as analogous to, or within the spirit of, any of the purposes listed in the Act or those already recognised as charitable purposes under existing charity law.

It can be argued that the list is not closed, and it is not entirely open-ended. A reference should be made to some sort of authority. Most usually existing case law to justify claim to charitable status.

Public Benefit In order to be charitable, the s3(1) purpose must also be for charitable. This means that the purpose must be charitable and it must benefit the public at large or sufficient section of the public. In Re John Duffy (2013), a legacy to help fund an old people’s home for the general benefit of its residents and staff was held to be not charitable under head (j). The court held that it was a gift for the benefit of no more than 33 residents at a particular care home could not be regarded as a gift to sufficient section or class of community as to meet public benefit requirement.  This involves two elements: - Tangible benefit; and - The class of persons to benefit consist of the public as a whole or sufficient section of the public (and not a private group of individuals). There are different tests for what constitutes a section of the community depending on the head of charitable purpose. Both of these requirements need to be met for the trust to be charitable. Exclusively Charitable This means that the property must be capable of dedication to charitable purposes only (S.1(1)(a) of 2011 Act). Where a gift is given for a number of special purposes, it will not be valid charitable purpose unless all the purposes are charitable. In Morice v Bishop of Durham (1805), a gift was held to be not charitable because some benevolent purposes are not charitable at law.

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Relief of Poverty Dingle v Turner [1972] – A charity to pay pensions to poor employees was upheld. The House of Lords emphasized the distinction between a charitable trust and a private trust. The key issue is the primary intention of the settlor. If the gift aims to relieve poverty among a particular description of poor people, it will be charitable. However, if it was merely a gift to particular poor people with the intention of relieving poverty, it will be a private trust. However, this generous approach to public benefit has resulted in some dubious decisions. Re Segelman [1996] – a trust for ‘poor and needy’ relations was upheld as valid even though the class to benefit comprised only 26 people. The trust was upheld only because the trust also included the relatives ‘future children’. The narrow class in Re Segelman [1996] has often thought of as borderline, the reasoning in AttorneyGeneral v Charity Commission for England and Wales and others [2012] confirms the continuing acceptability of such targeted purposes. It is now clear that as long as a purpose to relieve poverty can be shown to benefit the community in the first sense, it will no matter if the class of potential objects is poor relatives or employees. is clearly demonstrative of the line of cases which are concerned with the identification of an underlying charitable motive for the trust. Lord Cross considered this to be more important than seeking to address purely evidential question as to whether or not a sufficient section of the public will be benefited (Hudson) There is no definition of poverty in context of charity law. In Mary Clark Homes Trustees v Anderson [1904].Channell J held that poverty was a relative term “genuinely straitened circumstances and unable to maintain a very modest standard of living for himself and the person (if any) dependent on him. According to Hudson, there is no length of time for those who are to benefit from trust are required to be in straitened circumstances. Hudson stated that presumably it should last for more than one or two days. Re Coulthurst [1951] where it was for the widows and orphans of deceased bank officers. Court of Appeal held that it was charitable. It was held that person who have to ‘go short’ having regard to their status in life.” There are certain examples which demonstrate poverty. - Re Gardom [1914] “ladies of limited means”

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- Thompson v Thompson (1844) “unsuccessful literary men” - Re Young [1951] “distressed gentlefolk” - Spiller v Maude (1881) “ trust for the benefit of decayed actors” Defining ‘relief’ - Joseph Rowntree v Attorney-General (1983) “sufficient that there be some alleviation of the poverty as a result of the activities of the trust” - Biscoe v Jackson (1887) “enough for gift to be for institution which has as its purpose the relief of poverty. - Re Gwyon [1930] – a testamentary gift of short trouser for boys in Farnham was held to be not charitable because the benefit was not restricted to poor boys. Poverty and social class - Re Sanders Will Trusts [1954] – to provide dwellings for the working classes in Pembroke Dock. It was held that this was not charitable because working did not indicate poor people. However in Re Niyazi’s Will Trusts [1978] - A working men’s hostel in Famagusta, Cyprus. It was held to be charitable. In this case the court distinguished Re Sanders Will Trusts [1954] by stating that hostel indicates something different from dwellings and when connected with working men has connotation of poverty. Hudson argues that the latter case of Niyazi illustrates the acceptance of the courts that there is a need, with reference to charitable trusts, to look to the manner in which the money was used in fact to determine whether or not there is sufficient charitable intention. Public benefit In terms of poverty the public benefit requirement is hardly demanding. This can be explained on the basis that the relief of poverty is considered to be so altruistic that a public benefit element can be necessarily inferred. Isaac v Defriez (1754) confirms that trusts for testators poor relations is charitable. In Re Gosling (1900) poor employees were also permitted to be benefitted. However, it is still necessary to distinguish between a private trust and a public (i.e Charitable) trust. In Re Scarisbrick (1951) a distinction was between a

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trust to benefit a class of named poor relations (private trust) and a trust to benefit a class unnamed poor relations (a public trust). It was held by the Court of Appeal that a trust for relief of poverty would not be charitable if the poor person to benefit were members of a narrow class of close family. Exclusively Charitable It is necessary that a trust to relieve poverty is exclusively charitable. A trust will not be considered for the relief of poverty if it can benefit the rich as well as the poor. In Re Gwyon (1930), trust to establish a clothing foundation to provide clothing to boys in Farnham floundered because it failed to exclude more affluent children. This case clearly shows that the benefit is clearly restricted to the poor.

Advancement of education The Preamble referred to ‘schools of learning, free schools and scholars in universities’; however, the meaning of education in charity is not confined to situations involving the traditional teacher-pupil relationship. It is now well established, for example that the subject matter is considered to be useful and beneficial to the public and that the fruits of the research are disseminated in some way (Re Besterman (1980) The Times, 21 January). Museums would also be caught within this head (British Museum Trustees v White (1826). Similarly, conferences aimed at promoting greater international understanding have been held to be charitable under this heading (Re Keoppler Will Trusts [1986]) According to Hudson that ‘education in Charitable sense is not limited to teaching but could include schools and universities. Education could involve activities not in the classroom such as sports (as confirmed in IRC v Mullen [1981] and sport in universities as confirmed by London Hospital Medical College v IRC [1976]. It also includes establishment of a choir which was confirmed in Royal Choral Society v IRC [1943]. Case of Christ’s College, Cambridge (1757) confirms that also includes payment of staff in educational establishment. It also involves establishment of companies to provide education, subject to provision that they must not seek to make a profit ( something which would be distributed to

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shareholders like trading companies), this was confirmed in the case of Abbey Malvern Wells Ltd v Ministry of Local Government and Planning [1951].

Teaching - In educational institutions from day nurseries to universities. Provision of scholarships, educational facilities and buildings, payment of teachers and lecturers, establishment of museums, libraries and zoos. - Incorporated Council for Law Reporting v Attorney-General [1971] confirmed the publication of law reports is charitable under ‘education’. Promotion of culture - The promotion of music, drama and fine art among the public can be educational. Royal Choral Society v IRC [1943] - for the promotion of Choir Re Delius [1957] – education advancement of a renowned composer

But not always Re Pinion (Deceased) [1965] – where a gift to the National Trusts of a studio and its contents was not charitable because the collection lacked merit. Harman J remarked “I can conceive of no useful object to be served in foisting upon the public this mass of junk. It has neither utility nor educative value.” Research Research can be considered educational and therefore charitable. Re Hopkins [1965] – under which a bequest had been made to the Francis Bacon Society. The aim of the society was to prove that Bacon was in fact the author of the work that have generally attributed to William Shakespeare. It was held by the court that since the purpose was educational because it was of ’highest value of history and to literature’. It can be argued that since the research was to be made public it was held by the court that it is charitable.

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Re Shaw [1958] – In this case the trust at the issue concerned a bequest made by the great socialist playwright and man of letters George Bernard Shaw. Shaw had left money to be applied towards research to create a new alphabet language, in line with Shaw’s humanist philosophy, so that his works can be comprehensible to all nations and no matter what their mother tongue was so that peace could be found. Harman J held that it’s purpose could not be charitable because it involved propaganda. Hudson compares Shaw and Hopkins and argue that in Shaw where there was determination that war could be prevented clearly falls under public benefit and this is an element which does not actually explain the difference. Slade J in McGovern v A-G [1982] set out principles on which research could qualify. If following conditions are satisfied. - Useful subject of study - Knowledge disseminated to others - For the public benefit Sport and education IRC v McMullen [1981] – trust to promote playing of football and the playing and coaching of other sports in schools and universities. House of Lords held that it was education (thus charitable) because sport was essential to the development of young persons. In Re Nottage (1985) a trust to provide cup for a yachting competition was held to be charitable. In Re Patten [1929] it was held to be not charitable in terms of a cricket competition as there needs to be a formal link to education.

Hudson has argued that it is difficult to put a line at the extent of charitable purpose as in Re Dupree’s Deed Trusts [1945] Vaisey J was uneasy about the limits on his charitable educational purpose. When validating a trust to provide funds for an annual chess tournament for young men under the age of 21, his Lordship sensed that: One is on rather slippery slope. If chess, why not draughts? If draughts, why not bezique, and so on, through to bridge and whist, by another route, to stamp collecting and the acquisition of birds’ egg? Those pursuits will have to be dealt with if and when they come up for

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consideration. Hudson has stated that there no actual limit to what type of pursuit will be considered charitable. The cases do not give a hard and fast principles.

Public Benefit Independent Schools Council and others v Charity Commission for England and Wales [2011] sets out two senses of public benefit for education purposes must satisfy. -Public benefit in the first sense: the nature of the purpose addressed by the charity must be a benefit to the community. It will be satisfied if it improves education in the community as a whole and it does not matter which group it benefits. - Public benefit in the second sense: those to benefit from the charity’s work must be sufficiently numerous to constitute a section of the public and community rather than a private class of individuals. There must be a genuine public benefit in educational trusts. In British Humanist Association v Richmond LBC (2012), the Roman Catholic Diocese of Westminster sought to establish voluntary aided Catholic primary and secondary school. This was considered to be charitable because the schools were desirable even though there was need for them. In Re Compton (1945) a trust providing for the education of the descendants of three named persons was not a valid charitable trust. As the beneficiaries were defined by reference to a personal relationship and the trust lacked any public element. Personal nexus test In Oppenheim v Tobacco Securities Trust Co Ltd (1951) – In this case, money was given to provide education for children of employees of the British American Tobacco Corporation and its subsidiaries. The number of employees exceeded 110,000. The court held that even with these large numbers, the personal nexus between employers and employees meant that there was not a sufficient public benefit. In this case Lord MacDermott dissented, according to him should depend on facts of a case. He had argued that the approach taken by the majority takes no account of how much public benefit will be generated by the trust.

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In Re Koettgen’s Will Trust (1954) – a trust was established to further the education of British born persons, with a direction that preference be given to employees of a particular company in respect of 75 percent fund. The trust was held to be primarily for public, a mere preference being given to employees families. The decision is open to question and appears to undermine the personal nexus rule. In IRC v Educational Grants Association Ltd (1967), however, a trust to advance education was set up by the Metal Box Company. The evidence showed that over 80 per cent of the payments made went towards the education of children connected to the company. In respect of those payments the trust was held to be not charitable. However, this is where there is no clear certainty in case the percentage of 75 in Re Koettgen’s Will Trust (1954) it was considered to be charitable but in IRC v Educational Grants Association Ltd (1967) it was considered to be not charitable. Exclusively Charitable In Southwood v Attorney General (2000), a project on demilitarisation based at Bradford University failed because political dimensions of the trust prevented it being exclusively educational in nature. Due to it being political propaganda and therefore, not in public interest. Similarly, In Re Hopkinson (1949) a trust to educate the public in the aims of a political party (Labour) could not be charitable because it amounted to political propaganda and was not exclusively educational. However, in Attorney General v Ross (1986), a gift to London Polytechnic Students Union was charitable even though it had ancillary non-charitable purposes (such as providing shops and bar). It appears from case law that courts are more willing to accept it as exclusively charitable if it is not political.

Advancement of Religion Bowman v Secular Society [1917] – only believe in One God.

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However, it is not only limited to Christian religion. Neville Estates v Madden [1962] confirms that it includes the Jewish faith. Barralet v Attorney-General [1980] suggestion that Islam would also be included. Neville Estates v Madden [1962] – confirms that includes Jews faith. Barralet v Attorney-General [1980] – confirms that also includes Islam. Thornton v Howe (1862) – A gift to promote religious beliefs of Joanna Southcote, who claimed that she would give birth to the new Messiah, were upheld to be charitable. It did not matter if the court believed the religion to be foolish or even devoid of foundation. However, the court will not recognize a religion whose tenets are subversive of all morality. The Court will not discriminate against religions with small number of followers (Funnell v Stewart [1996]) The general view is that there must be a God. It has been argued that what constitutes a religion has not been answered satisfactorily by case law. In Re South Place Ethical Society [1980] – the court had to decide whether an organisation whose aims were to study and dissemination of ethical principles and the cultivation of a rational religious sentiment was charitable. Its members were agnostic (they neither affirmed nor denied the existence of the higher power. Dillion J distinguished ethical and religious beliefs, the former considered man’s relationship to man and the latter considered man’s relationship to God. His obiter comments were that religion involved two elements. - Faith in a God, and - Worship of that God. The court accepted this was a charity for advancement of education, however rejected the idea that it was religion as it lacked these two elements. The problem with this definition is that it did not recognise polytheistic religions which are religions that involve many Gods, such as Hinduism. It also did not include non-theistic religions which do not believe in any deity such as Buddhism. They are now included in s.3(2)(a) Charities Act 2011. This has broadened on what could be included in religion but a ‘religion’ must still involve some form of worship.

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The meaning of worship was considered in a different context by the Supreme Court in R (on the application of Hodkin) v Registrar General of Births, Deaths and Marriages [2014]. Accepted that Church of Scientology was place of worship...