charities

Question 1

what are charities?

Answer 1

charities are organisations set up for purposes

Question 2

what are the legal advantages of charitable status for a trust?

Answer 2

• not void for being purpose trusts
• tax advantages
• cy pres

Question 3

What is the charity commission?

Answer 3

the regulator and registrar of charities in England and Wales - established under Charities Act 2006

Question 4

What does the Charities Act 2011 state?

Answer 4

that for an organisation to be granted charitable statues it must pass three tests?

Question 5

what are the three tests for a organisation to gain charitable status?

Answer 5

1. must have a purpose that falls under one of the 13 set out in s3 of the charities act
2. it must be in the public benefit
3. it must be exclusively charitable

Question 6

name the first 5 charitable purposes?

Answer 6

a) the prevention or relief of poverty
b) the advancement of education
c) the advancement of religion
d) the advancement of health or the saving of lives
e) the advancement of citizenship or community development

Question 7

name the second 5 charitable purposes?

Answer 7

f) the advancement of the arts, culture, heritage or science
g) the advancement of amateur sport
h) the advancement of human rights, conflict 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

Question 8

name the final two charitable purposes

Answer 8

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, fire and rescue or ambulance services

Question 9

which section says that a charity must be in the public benefit?

Answer 9

s2(1)(a) CA

Question 10

what comes under principle 1 to satisfy the public benefit hurdle?

Answer 10

a) it must be clear what the benefits to the public are
b) the benefits must be related to the aims of the charity
c) the benefits must be balanced against any detriment or harm

Question 11

what comes under principle 2 to satisfy the public benefit hurdle?

Answer 11

a) the beneficiaries must be appropriate to the aims
b) opportunity to benefit must not be restricted by geographical or other restrictions or by ability to pay any fees charged
c) people in poverty must not be excluded for the opportunity to benefit
d) any private benefit must be incidental

Question 12

who must the benefit be for?

Answer 12

the public generally or a section of the public

Question 13

what has the charity commission provided in terms of charitable educational establishments, such as charitable independent schools?

Answer 13

provided some specific examples of ways in which they might make provision for the poor to benefit

Question 14

what are the ways that charitable educational establishments might show public benefit?

Answer 14

community outreach programs
bursaries
scholarships
sharing resources and expertise
fundraising for other charities and volunteering

Question 15

what are the two aspects of public benefit ?

Answer 15

the public aspect
the benefit aspect

Question 16

what comes under the benefit aspect?

Answer 16

• the purpose must be beneficial
• any detriment or harm that results from the purpose must not outweigh the benefit
• it must be clear what the benefits are
• no presumption of public benefit
• ## the benefits to the public should be capable of being, recognised, identified, defined or described

Question 17

what comes under the public aspect?

Answer 17

• ## the benefit must be for the public generally or a section of the public

Question 18

what counts as a sufficient section of the public?

Answer 18

• a particular geographical area
• a section can be defined by a reference to a charitable need
• a section can be defined by a ‘protected characteristic’ under the equality act as long as the restriction of benefits to people having that characteristic is justified in relation to the purpose

Question 19

what can a section of the public not be defined by?

Answer 19

a family relationship or relationship with an employer
there must be no personal nexus
this does not apply to charities for the relief of poverty

Question 20

what is the leading case on personal nexus?

Answer 20

Oppenheim v Tobacco Securities - there was too much of a close personal nexus between Oppenheim and his employees
so charitable status was declined

Question 21

when might cy pres apply?

Answer 21

when the original objective of the settlor cannot be performed

Question 22

what are the functions of the cy pres doctrine?

Answer 22

• re-ordering existing charities
• saving charitable gifts that would otherwise fail

Question 23

under s62 charities act 2011 - when is cy pres applicable?

Answer 23

if the original purpose:
- has been fulfilled or cannot be carried out
- can be carried out more effectively in a different way
- applied to an area which has ceased to be a unit or to a class of person which has ceased to be suitable
- has been adequately provided for by other means
- has become useless or harmful to the community or otherwise ceased to be charitable
- has ceased in some other way to provide a suitable and effective method of using the property

Question 24

how was the doctrine of cy pres developed?

Answer 24

through case law then supplemented in 1960 by statute

Question 25

what happens if the trust is impossible to perform from the outset - i.e. initial failure?

Answer 25

the property results back to the settlor unless cy pres doctrine applies

Question 26

what happened in Re Rymer 1985?

Answer 26

seminary had ceased to exist before the T’s death - no cy pres and so the gift fell into residue

Question 27

what must be shown for cy pres to apply in cases of initial failure?

Answer 27

general charitable intent

Question 28

what is the other kind of failure? - to initial failure

Answer 28

subsequent failure - where the trusts purpose has failed after it came into operation
the funds will be applied cy pres

Question 29

what are the basics of cy pres?

Answer 29

• where the charitable trust fails initially, the court will seek to devise a cy pres where there is a general charitable intention in the settlor’s failedf bequest
• look at settlor’s words to see what they mean
• if it is clear a particular purpose was intended then the doctrine will not operate
• if the court thinks the settlor intended a git for charity generally, it can be applied cy pres