Charities and Public Benefit

Question 1

What are charities? Examples?

Answer 1

Charities are organisations set up for purposes.
Examples include looking after children, feeding the hungry, and animal welfare

Question 2

Are charities incorporated or unincorporated?

Answer 2

They can be both:
Unincorporated are typically trusts
Most big charities are incorporated- companies limited by guarantee.

Question 3

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

Answer 3

They are not void for being purpose trusts
There are tax advantages
Cy Pres

Question 4

What is the Charity Commission? What Act is it established under?

Answer 4

It is the regulator and registrar of charities in England and Wales.
The Charities Act 2006 now Charities Act 2011

Question 5

What is the Charity Commissions statutory role?

Answer 5

• Increasing charities efficiency and effectiveness, public confidence and trust in the charitable sector.

Question 6

Does the Charity Commission only cover UK charities? Case?

Answer 6

Yes
Gaudiya Mission v Brahamchary [1997]

Question 7

What are the three requirements under the Charities Act 2011?

Answer 7

1. S1 (1)(a)- the trust must be exclusively charitable (an institution which is established for charitable purposes only)
2. S2 (1)(a)- the charitable purpose must be ‘on the s3 list’
3. S2(1)(b)- the trust must be for public benefit

Question 8

What is a charitable purpose?

Answer 8

Rationalised in IRC v Pemsel [1981] as being for one of the following purposes:
1. Relief of Poverty
2. Advancement of Education
3. Advancement of Religion
4. Other purposes beneficial to the
community

Question 9

Which Act used to set out Charitable purpose?

Answer 9

Charitable Uses Act 1601

Question 10

Which Act and Section contains the list of the 13 charitable purposes?

Answer 10

Statutory Reform Charities Act 2011 S3(1)

Question 11

What are the 13 charitable purposes?

Answer 11

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

Question 12

What are the requirements for something to class as an advancement of education?

Answer 12

It must be a useful subject of study
It must be disseminated to others
It must be for the benefit of the public

Question 13

What is classed as religion?

Answer 13

A spiritual or non secular belief system, held by a group of adherents, which claims to explain mankind’s place in the universe and to teach its adherents how they are to live their lives in conformity with the belief system

Question 14

Is jedism a religion?

Answer 14

No- Charity Commission ruled it was not Dec 2016

Question 15

Which section sets out the advancement of citizenship or community development?

Answer 15

S3(2)(c) which includes:
1. Rural or urban regeneration, and
2. The promotion of civic responsibility, volunteering, the voluntary sector or the effectiveness or efficiency of charities

Question 16

What are recreational charities in s5?

Answer 16

It is charitable to provide facilities for recreation or other leisure time occupation if the facilities are provided in the interests of social welfare.

Question 17

What does it require for something to be recreational for charities?

Answer 17

It requires that the facilities provided have the intention of improving the conditions of life for the persons for whom the facilities are primarily intended.

Question 18

Who would use these facilities for recreational charities?

Answer 18

Anyone who has the need because of their youth, age, infirmity or disability, poverty, or social and economic circumstances.
They are to be available to the members of the public at large or a specific section of the public.

Question 19

What are the three hurdles you must fulfill to obtain charitable status?

Answer 19

1. You must be on the good list- 13 charitable purposes (Charities Act 2011 s3(1))
2. The charity must be in the public benefit (Charities Act 2011 s2(1)(a))
3. It just be exclusively charitable (s1(a) CA)

Question 20

What does it mean by exclusively charitable?

Answer 20

The charity must be established for charitable purposes only- even one non-charitable purpose will deprive a trust of charitable status
Private benefit is not permitted
Non-charitable objects can only be merely incidental

Question 21

What are the two aspects of public benefit?

Answer 21

For a purpose to be for the public benefit, it must satisfy both of these aspects:
1. The ‘benefit aspect’
2. The ‘public aspect’

Question 22

When do the rules change for the public benefit requirement?

Answer 22

If the purpose is to relieve or prevent property

Question 23

How do you satisfy the benefit aspect of public benefit?

Answer 23

The purpose must be beneficial
Any harm that results from the purpose must not outweigh the benefit.

Question 24

What are the beneficial purposes?

Answer 24

It must be clear what the benefits are.
There must be no presumption of public benefit- must be provable if necessary
The benefits to the public should be capable of being recognised, identified, defined or described.

Question 25

Which beneficial purposes are accepted as self-evident?

Answer 25

Religion
Donors idea of benefit is not relevant

Question 26

How do you fulfill the public aspect of public benefit?

Answer 26

The benefit must be for the public generally or a section of the public

Question 27

What is a ‘sufficient section’ of the public for the public aspect?

Answer 27

1. A particular geographical area (if there are no unreasonable restrictions)
2. Defined by reference to a particular charitable need.
3. Defined by a protected characteristic under the Equality Act (if the restriction of benefits to people having that characteristic is justified in relation to the purpose)

Question 28

What can a section not be defined by for the public aspect?

Answer 28

It cannot be defined by reference to a family relationship or relationship with an employer- there can be no ‘personal nexus’.