CHARITIES

Part 1-introduction

Charity hard to define

Statute of Charitable Uses 1601, also known as the statute of Elizabeth I

The Spirit and Intendment of the Preamble
“...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 ...
Churches... ; the education and preferment of orphans; the relief, stock, or maintenance of
houses of correction; the marriage of poor maids...”

The were no welfare state, so charities were an important support for society and people in
need

The Historical Approach

Commissioners of Income Tax v Pemsel (1891) Lord McNaughten established 4 broad
purposes/categories:
1. Trusts for the Relief of Poverty
2. Trusts for the Advancement of Education
3. Trusts for the Advancement of Religion
4. Trusts for other purposes beneficial to the community, not falling under any of the
preceding heads

Charitable Purposes and Analogy

Scottish Burial Reform v Glasgow Corp [1968]
SBR was seeking charitable status because it sought relief against certain local taxes,
purpose: reform of the burial concerning sanitary disposal of the deceased, it charged fees but
was non-profit, HoL decided the objects were for the benefit of the public and satisfied the
1601 statute, it fell in the 4th category

lord Wilberforce:
 There may be purposes which do not fit into McNaughten’s categories
 Words used are not to be treated as if they had the force of statute
 Charity law evolves and may well be different today

Also recognized in Incorporated Council of Law Reporting v AG [1972] the case concerned a
trust for the publication of official law reports and whether this activity could have a
charitable status on the basis that it provided some utility to the public. CoA, Russel LJ said it
was beneficial to the community to have acute law reports as it helped the course of justice, it
fell within the1601 statute

Features of Charitable Trusts

 Must be of a charitable purpose within the spirit of the preamble of the 1601 Statute
or by analogy. NOW s. 3(1) Charities Act 2011, also lots of cases and old law which
shall be integrated with the statute
 Must promote a public benefit, as recognised by the courts
  The purpose of the trust must be wholly and exclusively charitable, there cannot be a
mix of purposes

Charities Act 2011

S.1 CA 2011: Meaning of “charity”
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
Not a proper definition

S. 2 CA 2011: “charitable purpose

(1) ...a charitable purpose is a purpose which—
(a) falls within s.3(1), and
(b) is for the public benefit (s.4).

Independent Schools Council v Charity Commission [2011]

Description of purposes: S. 3(1) CA 2011

1. prevention or relief of poverty;
2. advancement of education;
3. advancement of religion;
4. advancement of health or the saving of lives;
5. advancement of citizenship or community development;
6. advancement of the arts, culture, heritage or science;
7. advancement of amateur sport...
8. advancement of human rights, conflict resolution or reconciliation or the promotion of
religious or racial harmony or equality and diversity;
9. advancement of environmental protection or improvement;
10. relief of those in need because of youth, age, ill-health, disability, financial hardship
or other disadvantage;
11. advancement of animal welfare;
12. promotion of the efficiency of the armed forces...or the police, fire and rescue
services...
13. any other analogous purposes...

Part 2: Charitable Purposes

Prevention or relief of poverty: s.3(1)(a)

‘Poverty may not be unfairly paraphrased as meaning persons who have to go short in the
ordinary exception of that term with due regard to their status.’ (Poverty is relative to others,
having less than the standard of the society)
Re Coulthurst [1951] Ch 661
Idea also present in 2008 Charity Commission Report: Prevention or Relief of Poverty:
people in poverty lack something which is essential and which the majority of the society
would regard as necessary from modest to adequate standard of living
Poverty Cases
 Re Gwyon [1930] 1 Ch 255, testator sought to establish a clothing foundation for
boys in a particular area of England, problem was with the formulation as such
foundation was not restricted for a particular group of boys, but a particular area, trust
failed
 Re Sanders’ WT [1954] Ch 265, gift to provide residential dwellings for working
class in a particular area in wales failed because the categorization of working class
could not be referred to poor people, so it was not exclusively charitable
 Joseph Rowntree Memorial Trust Housing Association Ltd. V A-G [1983] Ch 159
 A-G v Charity Commission (Poverty Reference) [2012] WTLR 977

Relief of poverty was equal to public benefit back in the days, public benefit need not
be proven

Advancement of education
‘Curiously enough, some people find pleasure in providing education. Still more curiously,
some people find pleasure in being educated: but the element of pleasure in those processes is
not the purpose of them, but what may be called a by-product which is necessarily there.’
Royal Choral Society v IRC [1943]
Lord green: the concept of education goes beyond teaching in a classroom and is a
such a broad concept and still is today

 Re Shaw [1957] 1 WLR 729 testator sought to set up a trust for research for a new
English alphabet, court said it was not charitable as such purpose would not
necessarily be educational, provide extra knowledge or benefit to the community,
such agenda amounted to propaganda rather than education

IRC v McMullen [1981] AC 1

‘I reject any idea which would cramp the education of the young within the school or
university campus, limit it to formal instruction, or render it devoid of pleasure in the exercise
of skill’.
per Lord Hailsham

Re Hopkin's WT [1965] Ch 699

Testatrix decided to leave 1/3 of her estate to be applied toward finding the Bacon-
Shakespeare manuscripts, it was said bacon was a genius and he wrote Shakespeare’s plays,
the society was already a charity, gift was found valid although the improbability of finding
such manuscripts

‘the Francis Bacon Society to be earmarked and applied towards finding the Bacon-
Shakespeare manuscripts and in the event of the same having been discovered by the date of
my death then for general purposes of the work and propaganda of the society.’

1. The research must be of educational value to the researcher; or

2. Directed as to improve the sum of communicable knowledge in an area which education
may cover
per Wilberforce J.

Re Hopkinson [1949] 1 All ER 346

The testator wanted to establish a request the advancement of adult education with particular
reference to the doctrines of the Labour Party, reference to the part, not to education,
interpretation of education based on the political views of the parties, held to be invalid
‘for the advancement of adult education with particular reference to [the doctrines of the
Labour Party] to a higher conception of social, political and economic ideas and values...’

Vaisey J: ‘Political propaganda masquerading as education is not education within the Statute
of Elizabeth.’

Re Koeppler’s WT [1986] Ch. 423

A testator left a trust for the benefit of the Academic Advisory Council
‘for the.. Academic Advisory Council of the institution known as Wilton Park for the benefit
of the said institution as long as Wilton Park remains a British contribution to the formation
of an informed international opinion [...]’
Courts looked at the events taking places at the parks (conferences on environment, quality of
life, ecology, arm control, European community) they concerned the sharing and discussing
of political views, but they were not in line with political parties or propaganda, so it was
held there was an educational purpose, it was held an educational charity

Advancement of Religion: s.3(1)(c)

Historical Interpretation:
Religion has been defined as 'a particular system of faith and worship' and the
'recognition on the part of man of some higher unseen power as having control of his
destiny, and as being entitled to obedience, reverence, and worship'.
(Tudor on Charities)

Charities Act 2011

s. 3(1)(c) advancement of religion

s. 3(2)(a): “religion” includes—
(i) a religion which involves belief in more than one god, and
(ii) a religion which does not involve belief in a god.

Religion/Ethics and Public Contribution

Re South Place Ethical Society [1980]
Objects: ‘study and dissemination of ethical principles and the cultivation of rational religious
sentiment’
 Charity Commission Guidance (2008)
 Promotion: Freemasons v Holborn BC (1957)
 Improvement or benefit to public: Gilmour v Coates (1948)
Charity Commission Guidance
Spiritual Belief System Characteristics
 belief in a god/gods, or supreme being, or divine or transcendental being or entity or
spiritual principle [...] which is the object or focus of the religion
 a relationship between the believer and the supreme being or entity by showing
worship of, reverence for or veneration of the supreme being or entity
 a degree of cogency, cohesion, seriousness and importance
 an identifiable positive, beneficial, moral or ethical framework

Druid Network Decision, Charity Commission, 21/09/2010

• The commission considered an application from the Druid Network for registration as a
charity.
• The commission was satisfied that Druidry is a religion in charity law and provides public
benefit.
• It concluded that the organisation could be registered as a charity.
• This decision is significant because the commission had to consider the definition of a
religion both in charity law and human rights law.

Purpose: “To provide information on the principles and practices of Druidry for the
benefit of all and to inspire and facilitate the practice for those who have committed
themselves to this spiritual path.”

Satisfying Requirements
 Network’s Constitution & Activities
 Druid Network’s compliance with the spiritual principle and reverence requirement
 Doctrine and practices: cogence, cohesion etc
 Contribution to moral or spiritual improvement of public

Temple of the Jedi Order Decision, Charity Commission, 16/12/2016:

• The commission considered an application by the Temple of the Jedi Order for
registration as a charity and concluded that the organisation was not established for
exclusivity charitable purposes and could not be registered.
• The commission was not satisfied that Jediism is a religion in charity law
• This is a significant decision because the commission had to consider the definition of
religion in charity law

Purposes: “To advance the religion of Jediism, for the public benefit worldwide, in
accordance with the Jedi Doctrine...”.

Components
 Belief in god/gods or spiritual dimension
 Jediism is based on the observance of the Force, described as “the ubiquitous and
metaphysical power that a Jedi (a follower of Jediism) believes to be the underlying,
fundamental nature of the universe” (para. 15).
 Commission’s view...

Cogency and Cohesion of Organisation / Belief System

  Source of beliefs
 Structural considerations
 NZ Charity Commission view (2015): “the belief system is merely a collection of
interconnected ideas based on the Star Wars universe, rather than structured cogent
and serious religion.”
 Contribution to moral or spiritual improvement of public? no positive impact
Part 3: Public Benefit & Exclusivity Requirements

S. 2 CA 2011: “charitable purpose”

(1) ...a charitable purpose is a purpose which—
(a) falls within s.3(1), and
(b) is for the public benefit (s.4).
Independent Schools Council v Charity Commission [2011]

Public Benefit
S. 4(1) ‘In this Act “the public benefit requirement” means the requirement in s. 2(1)(b) that a
purpose falling within s. 3(1) must be for the public benefit if it is to be a charitable purpose.’

S.4(2) ‘... it is not to be presumed that a purpose a particular description is for the public
benefit.’

Benefitting the Public

Oppenheim v Tobacco Securities (1951)
• Trustees were directed to apply certain income in providing for ‘the education of
children of employees or former employees’ of a British limited company or any of its
subsidiary or allied companies.
• The number of eligible employees was over 110,000. Charitable status was claimed. 
• Held: The trust was not charitable. The nexus, that of being employment by particular
employers, did not satisfy the test of public benefit to establish the trust as a charitable
trust

1. No personal nexus
2. Number of persons in the class to be benefitted must not be numerically negligible
3. the beneficiaries constituted a private class

Public/Private Class in Poverty Cases

Re Compton [1945] Ch 123
 the court considered the charitable status of a trust ‘for the education of Compton and
Powell and Montague children’. 
 Held: It was not charitable.
 If the group of beneficiaries is distinguishable from other members of the community
by a relationship with a particular individual or entity, whether as a result of family
ties, or through contract, or by their employment or by membership of an association,
that group will not be considered to constitute the public for charitable purposes.
 The essential requirement of a public charity is that it dispenses aid to all members of
the relevant class of beneficiaries irrespective of all factors other than need.

Re Scarisbrick [1951] Ch 622

  The court was asked whether a trusts for poor persons within a restricted category, the
testator’s descendants, not meeting the usual requirement that the benefits be available
to a wider section of the community, may be held charitable. 
 Held: Such a trust could be charitable. 

 The dividing line between a charitable trust and a private trust ‘depended on whether
as a matter of construction the gift was for the relief of poverty amongst a particular
description of poor people [charitable] or was merely a gift to particular poor persons,
the relief of poverty among them being the motive of the gift [private]’
 The fact that the gift took the form of a perpetual trust would no doubt indicate that
the intention of the donor could not have been to confer private benefits on particular
people whose possible necessities he had in mind
 but the fact that the capital of the gift was to be distributed at once did not necessarily
show that the gift was a private trust.

Dingle v Turner [1972] AC 601

 Gift to Specified person not Charitable 
 The testator left part of his property on charitable trusts for the relief of the poverty of
‘the poor employees’ of a company
 The appellant argued that it was not a charitable gift, and that the gift failed. 
 Held: The purpose will not be charitable if the intention is to make a gift to a specified
person, even if it is a gift to alleviate poverty.
 Here, the intention of the gift was to benefit the poor generally who fell within a
certain description, rather than certain individuals.
 Since they were a ‘section of the public’, the gift was charitable and did not fail.
 The fiscal advantages obtained by making a gift charitable should not be taken into
account in assessing its motives and charitable status.

A-G v Charity Commission (Poverty Ref) (2012)

 The reference was made when the first party Charity Commission became unsure as
to whether the Act, which expressly required that charitable purposes be "for the
public benefit", had the effect of depriving it of jurisdiction to regulate trusts and
other benevolent bodies whose objects were the relief of poverty to a restricted group
of beneficiaries.
 The essential questions were
1. whether a trust for the relief of poverty could be charitable if those who benefited
from it were defined by their relationship to
(a) an individual;
(b) a company; or
(c) an unincorporated organisation;
2. whether the Act statutorily reversed pre-2006 legal authorities;
3. whether the nature and extent of public benefit required in order for a trust for the
prevention of poverty to be a charitable trust was the same as, or different from,
the public benefit required of a trust for the relief of poverty.

 the court addressed issues of principle concerning the law of public benefit both
before and after the coming into force of the Act.
 Held: A trust for the relief of poverty amongst a class of potential beneficiaries who
were defined by their relationship to an individual, their employment by a commercial
 company or their membership of an unincorporated association was capable in all
three situations of being a charitable trust
 There were two related aspects of public benefit: the first was that the nature of the
charitable purpose had to be such as to benefit the community; the second was that
those who benefited had to be sufficiently numerous and identifiable so as to
constitute “a section of the public”, 
 R. (on the application of Independent Schools Council) v Charity Commission for
England and Wales [2011] UKUT 421 (TCC), [2012] 2 W.L.R. 100 applied.
 It was therefore possible that a trust could be charitable even if it was not for the
public benefit in the first sense, Gilmour v Coats [1949] A.C. 426 applied.
 The abolition of the presumption of public benefit in s.3(2) of the Act had had no
impact on whether a trust for the relief of poverty was charitable or not.
 In deciding whether a trust was for the public benefit, a court would form its view on
the evidence, not by way of assumption
 There was nothing in the pre-2006 authorities which raised the slightest doubt that the
first aspect of public benefit was necessary for a purpose to qualify as charitable. Nor
was there anything in the authorities to lead to the conclusion that the first type of
public benefit was a separate and distinct requirement which had to be satisfied if a
purpose was to be charitable.
 Charity existed for the public benefit; an element of "public benefit" was that the
nature of the purpose had to be one which was capable of being of benefit to the
community.
 When deciding whether the public benefit requirement was satisfied, it could not be
right to focus exclusively on the question whether the beneficiaries could be regarded
as a section of the community
 Trusts for the prevention or relief of poverty were not automatically charitable.
Whether or not an institution satisfied the public benefit requirement had to be
assessed by reference to the criteria which were relevant to its purposes. It did not
make sense to consider the public benefit requirement under the Act in abstract,
because what might be sufficient for one type of institution might not be sufficient for
a different institution. 

The charity commission the role to provide guidance which must be taken into account by
trustees and charitable associations

Charity Commission Guidance: Public Benefit 2008 version

Principle 2:
Benefit must be to the public or section of the public...
2 (b) Opportunity to benefit must not be unreasonably restricted by geographical or other
restrictions; or ability to pay any fees charged
2 (c) people in poverty must not be excluded from the opportunity to benefit

Independent Schools Council v Charity Commission (2011)

 Do Independent Schools Council (represent 1270 schools, 980 of which are charities)
operate for the public benefit?
 What does a school need to do to satisfy the public benefit test?
  The court was required to determine the appropriate relief to be granted to the
claimant independent schools council (ISC).
 the court held that it was for the trustees of independent schools to determine how
those schools were to be run as charitable trusts, and that guidance issued by the
respondent commission regarding the public benefit requirement contained in
the Charities Act 2006 s.2 and s.3 would have to be corrected.
 The parties were unable to agree a form of order for relief.
 The ISC considered that those parts of the guidance which had been found to be
wrong in law or obscure should be quashed.
 The commission argued that only declaratory relief should be granted, with the effect
of the decision being incorporated into the guidance.
 Held
 Under s.4(6), charity trustees were obliged to take account of the guidance, which was
a significant factor in support of the ISC's contentions, and the guidance should be
quashed unless there were good reasons for not doing so.
 In the absence of any formal revision, trustees had to have regard to it as it stood and
had to make a statement in their annual report to that effect.
 It was unsatisfactory that trustees should be required to have regard to flawed
guidance and then work out for themselves what qualification should be made in the
light of the court's decision.
 It was also unsatisfactory that they should have to state in their annual report that they
had had regard to guidance which was flawed.
 The fundamental difficulty was that the finding that the guidance was wrong in some
respects did not displace the duty under s.4(6). It would be difficult to formulate
declaratory relief with the required clarity and the proper order was therefore one
quashing certain parts of the guidance
 The commission would be given the opportunity to withdraw those parts of the
guidance which would otherwise be quashed. It was to provide an undertaking to
withdraw the relevant parts of the guidance within 21 days from the date of release of
the instant decision. Failure to comply with that undertaking would result in a
quashing order

Charity Commission Guidance (2013)

Parts 2-5: Meaning of Public Benefit
 The benefit aspect is about whether the purpose is beneficial.
 The benefit must be identifiable:
 It must be capable of being evidenced when necessary not based on personal views
 The purpose cannot be charitable where it might be detrimental or harmful

Charity Commission Guidance (2013)

Part 5: Benefitting a sufficient section of the public
The public aspect
• The circumstances should indicate that a clear public class is intended
• The class must be described otherwise than by reference to kin or a contractual
relationship
• The no personal nexus test remains relevant
Political Activities
McGovern v A-G [1982] Ch 321
 Amnesty International established a trust with a view to obtaining charitable status for
some of its activities. 
 Held: The trust established to promote certain of its objects was not charitable
because it was established for political purpose;
 however a trust for research into the observance of human rights and the
dissemination of the results of such research could be charitable. 
Amnesty International objects:
a) Relief of needy persons who might become prisoners of conscience
b) Release of prisoners of conscience
c) Abolition of torture
d) Research into human rights

Slade J’s decision

a) The court didn't have the means of judging whether a proposed change would or
would not be for the public benefit; and,
b) It would in effect put the court in an impossible position because it always had to
regard the current law as being correct.
c) Constitutional function of the Courts
d) Consequences of promoting introduction of changes to foreign laws, such role
belonged to the UK gov

2008 Charity Commission Guidance

Political Activities
A charity cannot have a political purpose, but a charity may undertake political
activities (including campaigning for a change in the law or to influence government
policy).

Part 4: The Cy pres doctrine

The Cy-Pres Doctrine

• Meaning of ‘Cy‐Pres’, as near as possible in French
• In the context of charities, the cy-près doctrine allows the wishes of a donor to charity
to be carried out even if the original purpose of the gift has failed. For the doctrine to
apply, the new purpose should be as close as possible to the original purpose.
• Specific Charitable Intention and General Charitable Intention

1. Initial Failure: cases

• Re Rymer (1895)
• Re Harwood (1936)
• ‘Belfast Peace Society’
• ‘Wisbech Peace Society’
• Amalgamation: Re Faraker (1912)
2. Subsequent Failure
• Re Slevin(1891)
• Re King(1923)

3. Extension via Charities Act 2011

• Section 62 & 63 Charities Act 2011
• Altering purpose on grounds of effectiveness and convenience