Charitable Trusts Flashcards
What statute regulates the Charity Commission?
Charities Act 2011
Definition of charitable purpose
A purpose that falls within the technical meaning or one that is deemed to be within the spirit of the 1601 Statute of Elizabeth
Charitable purpose
s1 Charities Act 2011
- Falls within s3(1)
- Is for the public benefit (s4)
Things to remember about prevention and relief of property
- Expansive interpretation
- Including limited means, needy, poor employees
- Public benefit usually okay - even in Re Segelman 1996, where class of 26 people related to a multimillionaire
The benefit aspect of public benefit
A purpose must be beneficial:
- In a way that is identifiable
- Any detriment must not outweigh the benefit
- Capable of being proved by evidence and not based on personal views
The public aspect of public benefit
A purpose must:
- Benefit the public in general, or a sufficient section of the public (varies from purpose to purpose)
- Not give rise to more than incidental personal benefit
IRC v McMullen 1980
Education should be understood as a “balanced and systematic process of instruction, training and practice containing both spiritual, moral, mental and physical elements”
Examples of purposes for advancement of education
Museum - British Museum Trustees
Post - Yates v UCL
Learned societies - Royal Society of London v Thompson
Re Shaw 1957
F: Money left for the purpose of researching whether a 42-letter phonetic alphabet would be better for us
I: Was that advancement of education?
H: No - “if the object be merely the increase of knowledge, that is not in itself a charitable object unless it be combined with teaching or education”
Re Hopkins’ Will Trust 1965
F: Money left to research whether Shakespeare’s works were actually written by Francis Bacon
I: Was that advancement of education?
H: Yes - “research must either be of educational value to the researcher or must be so directed as to lead to something which will pass into the store of educational material, or so as to improve the sum of communicable knowledge in an area which education must cover - education in this last context extending to the formation of literary taste and appreciation”
Public benefit in advancement of education
The Compton rule
Oppenhaim v Tobacco Securities Trust 1951
F: Trust left for education fo the children of employees and ex-employees (10,000 children like this, all connected to the company so not members of the public)
I: Was there a public benefit?
H: No - size was not the issue; the group did not count as a section of the public because of the “personal nexus”, or common relationship, between the settlors (British American Tobacco) and the beneficiaries
So basically where a charity is established in favour of the public, but is de facto administered to a small class, this will satisfy the public benefit requirement
Re Kottegen 1954
“To provide education for those wanting it with preference to employees of X providing no more than 75% spent on employees each year” valid
IRC v Baddeley 1955
“Religious, social and physical wellbeing of persons resident in West Ham and Leyton if they are members of the church” fails
Historical, meaning of religion in the context of charitable trusts
Two essential attributes - faith in a god and worship of that god (Re south Place Ethical Society 1980)
Assumption about the public benefit of advancement of religion
That public gets a benefit from people of faith being part of a community
Test for public benefit
Balance the benefit and advantage where a case of detriment is raised by examining evidence before them as to the ‘public’ and ‘beneficial’ nature of the particular organisation
Gilmour v Coats 1949
Carmelite nuns in a secluded order, no public benefit in advancement of religion
Things to remember about advancement of health or saving lives
- Medical research
- Provisions of facilities to ease suffering (including alternative methods)
- Relief of distress from natural disasters where it doesn’t fall under the first head
- Establishment and maintenance of mountain rescue facilities
- Promotion of road safety
What test is used for the advancement of the arts, culture, heritage or science?
Quality test - Re Delius 1957 ok with musical works of late husband, but Re Pinion 1965 not - a private collection to be maintained as a museum called a “mass of junk”
What activities count as the advancement of human rights?
Trying to change the law not okay as “political purpose” (Bowman), but okay to collect data to educate the public or promote current rights
Anti-Vivisection Society v IRC 1948
Public benefit from advancing morals and education far outweighed by detriment to medical science; plus political aim to change the law
The effect of the doctrine of cy-pres
Surplus funds go to a different charity that is as close to the orginal purpose
Does cy-pres apply where there is initial failure of the charity?
Depends on intent:
- If specific charitable intent, and cannot be met, gift fails
- If general intent to benefit charities, can apply generally
Does cy-pres apply where there is subsequent failure of the charity?
In the usual case, once property has been dedicated to charitable purposes, it remains charitable in perpetuity
