Charitable trusts

Question 1

requirements for a charitable trust

Answer 1

charitable purpose
public benefit
sufficient section
exclusively charitable

Question 2

what are the charitable purposes

Answer 2

poverty 
education 
religion
health and saving lives
citizenship and community development
arts, culture, heritage and science 
amateur sport
human rights, peace, equality and diversity, promotion of racial/religious harmony
environment 
needy 
animals
forces and emergency services 
analogous purposes with same spirit 
NOT POLITICS

Question 3

what is a public benefit

Answer 3

pros outweigh cons

on balance it is a good thing for society

Question 4

sufficient section general rule

Answer 4

no unreasonable restrictions on the opportunity to benefit from the purpose
can have selection process as long as it is open to all who could benefit from purpose
geographic restrictions not too narrow

Question 5

sufficient section - poverty

Answer 5

unreasonable restrictions are allowed

Question 6

sufficient section - education

Answer 6

no personal nexus allowed 
can give preference to a class but not absolute priority

Question 7

what is a personal nexus

Answer 7

connected group - members of family, employees of particular employer etc.

Question 8

exclusively charitable

Answer 8

non-charitable purposes can only be incidental to charitable purposes. must be by-product of main purpose.

Question 9

what can a court do if there are some charitable and some non-charitable purposes

Answer 9

might be able to server it so there are two trusts

Question 10

what is cy-pres

Answer 10

when a charitable trust fails so remaining funds are applied to charitable purposes similar to the original failed purpose

Question 11

2 types of failures (cy-pres)

Answer 11

initial - purpose of gift fails before gift takes effect

subsequent - there is a failure in carrying out the purposes of the gift after the gift takes effect

Question 12

cy-pre for initial failure

Answer 12

if there is a general charitable intention then apply cy-pres. if not then RT to S’s estate.

Question 13

factors for and against finding a general charitable intention

Answer 13

against: terms of gift are specific, gift is to a corporation
for: rest of will is charitable, charity to benefit never existed, gift is to an unincorporated association

Question 14

cy-pre for subsequent failure

Answer 14

cy-pres applies automatically

Question 15

does cy-pres apply when a charity merges with another charity

Answer 15

no the gift is applied automatically. no need to use cy-pres as there is no failure. charity is just in a new format

Question 16

what if a charity won’t accept a gift due to the restrictions on use set by the settlor

Answer 16

court can find a general charitable intention and remove the restrictions on use.

Question 17

what does a political purpose include

Answer 17

trying to change laws or government policies of this or other countries

Question 18

Three aspects of a charitable trust

Answer 18

Charitable purpose
Sufficient public benefit
Exclusively charitable

Question 19

What does poverty mean

Answer 19

Not destitution just going short

Question 20

Can a poverty trust name an individual (benefit sufficient section of the public)

Answer 20

No but could be a group eg my family

Question 21

2 aspects of the public benefit test

Answer 21

The trust must have an identifiable benefit ( benefit must be clear and relate to the purpose of the charity) (benefit outweighs any detriments)
Benefit a sufficient section of the public (no arbitrary restrictions)

Question 22

Can religion be a public benefit

Answer 22

Yes if it is open to all or members mix with citizens

Question 23

Can education be limited by personal nexus

Answer 23

No

Otherwise won’t be sufficient public benefit

Question 24

Can the poor be excluded from a charity

Answer 24

No

Can charge fees but must give more than minimal assistance to those who can’t afford them.

Question 25

Can charitable institutions charge fees

Answer 25

Yeah but put profits back into charitable purpose

Cannot exclude the poor so give more than minimal assistance to help those who cannot afford fees

Question 26

What does exclusively charitable mean

Answer 26

It cannot have both charitable and non charitable purposes

Question 27

Can a charity have political purposes

Answer 27

No

But can engage in ancillary political activities if it helps them achieve their main purpose

Question 28

What to do with the profits of a charity

Answer 28

Must be put back into trust and not paid to private individuals

Question 29

What if there is a mix of charitable and non charitable purposes

Answer 29

It won’t get charitable status