Charitable Trusts Flashcards
A charitable trust must be:
- for a recognized charitable purpose;
- for the ‘public benefit’; and
- for exclusively charitable purposes.
Pemsel
- The relief of poverty.
- The advancement of education.
- The advancement of religion.
- Other purposes beneficial to the community.
Re Sanders
A gift to provide housing for the ‘working classes’ of Pembroke Dock was held not to be for the relief of poverty. Although the ‘working classes’ may have relatively low incomes, this did not mean that they could not afford housing. The use of the phrase ‘working classes’ did not sufficiently restrict the gift to a class of the poor.
Re Niyazi’s Will Trusts
A gift to build a working men’s hostel in Cyprus was upheld as a trust for the relief of poverty. This case is different from Re Sanders because it involved building a hostel. The court believed that such temporary accommodation would only be used by those whose income meant that they could not afford more permanent housing, thus sufficiently restricting the gift to poor working men.
Dingle v Turner
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.
Re Segelman
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.
Re Besterman’s Will Trust
Slade J argued that a trust for research will be charitable if:
* the subject matter of the proposed research is a useful subject of study; and * it is contemplated that knowledge acquired as a result of the research will be disseminated to others.
Oppenheim v Tobacco Securities Trust
A trust to help pay for the education of the children of employees and ex-employees of British-American Tobacco was held not to be charitable. Even though the company employed more than 110,000 people, the majority of the House of Lords confirmed that there are two sections of the community which are not wide enough to satisfy the public benefit requirement:
• where membership is determined by a personal nexus with the donor – eg family or other relations; and
• where membership is based on contract – eg a contract of employment.
Personal Nexus
Thornton v Howe
A gift to promote the religious beliefs of Joanna Southcote, who claimed that she would give birth to the new Messiah, was upheld as 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.
s 3(2)(a) Charities Act 2011
‘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.
Section 3(1)(d)
the advancement of health or the saving of lives
AG v Ross
It was held that the funds of a polytechnic’s 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.
Gilmour v Coats
Trust for the benefit of cloistered nuns not for the public benefit.
Charities for the advancement of religion require the public to be able to access the religion.
McGovern v AG
Amnesty International - Political purposes are not allowed in charitable trusts, but engaging in political activities to further a charitable purpose may be acceptable as ancillary non-charitable purposes.
Re Scarisbrick
A trust for poor relations upheld as charitable.
Public benefit means for the benefit of the community or some section of it.
