Charitable Trusts

The Heads of Charity

Lecture 10.2
The Heads of Charity – s3(1) Charities Act 2011
• (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;
• (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;
• (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 services or ambulance
services;
• (m)any other purposes
S3(1)(a) CA 2011 -
THE PREVENTION
OR RELIEF OF
POVERTY
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Charitable purposes - Poverty
S3(1)(a) CA 2011 – Prevention or relief of poverty
Meaning of poverty
• A relative term; not limited to destitution

• Re Coulthurst [1951] –
Fund for ‘widows and orphaned children of deceased officers and deceased ex-
officers’ of a bank - with bank given discretion to choose ‘most deserving’ according to
financial circumstances

HELD: valid charitable trust intended to benefit poor.

Poverty = “persons who have to ‘go short’...due regard being had to their
status in life” per Lord Evershed
(cf. personal nexus rule in Oppenheim (later))
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Charitable purposes - Poverty
S3(1)(a) CA 2011 – Prevention or relief of poverty
Meaning of poverty
• Not (working) class-specific:
• Re Gardom [1914] ladies of limited means; charitable
“there are degrees of poverty less acute than abject
poverty or destitution, but poverty nonetheless” per Eve J

• Re Sanders’ Will Trusts [1954] – ‘dwellings’ for working classes = failed; no requirement
to be poor to benefit

• Cf. Specific words used Re Niyazi’s Will Trusts [1978] – working men’s hostel =
charitable; hostel suggested modest accommodation for those on low income in
temporary need
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Charitable Purposes - Poverty

S3(1)(a) CA 2011 – Prevention or relief of poverty

Meaning of poverty
Charity Commission guidance
• “issue is whether people lack the basic things in life, rather than why they lack them”
• “The prevention or relief of poverty is not just about giving financial assistance to
people who lack money...” (2013)
Other examples of relieving poverty:
- provision of items e.g. furniture, clothes, food etc
- payment for services e.g. insulation, repairs, laundering
- provision of facilities e.g. supply of tools or books etc
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Charitable Purposes - Poverty
S3(1)(a) CA 2011 – Prevention or relief of poverty
Public benefit
• Historically public benefit presumed for relief of poverty

• Presumption abolished by CA 2006 and 2011

Two elements:
Presumption
(i) identifiable benefit
(i.e. nature of purpose) – this is easily satisfied
AND
(ii) to the public
(i.e. sufficient numbers to benefit).......
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Charitable Purposes - Poverty
S3(1)(a) CA 2011 – Prevention or relief of poverty
Public benefit
(ii) to the public

• ‘public’ - more generous interpretation for this ‘head’ than others (due to clear benefit to
the State)

• ‘public’ can mean very small class

e.g. poor relatives of testator (Re Segelman [1996]) or
poor people in small area – parish/town (Re Lucas [1922])

i.e. this head exempt from personal nexus rule

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Charitable Purposes - Poverty
S3(1)(a) CA 2011 – Prevention or relief of poverty
Public benefit
(ii) to the public
• Dingle v Turner [1972] –
Trust for relief of poor employees of Dingle & Co who were old or incapacitated. (Company
had 600+ employees)
Issue: clearly infringes personal nexus rule

HELD: public benefit test satisfied – poverty exception to personal nexus rule.
(Reasoning that, inter alia, illogical to distinguish between different sorts of poverty trust)

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Charitable Purposes - Poverty
S3(1)(a) CA 2011 – Prevention or relief of poverty
Exclusively Charitable

• Must still have exclusively charitable purposes i.e. must be exclusively for poor

• Re Gwyon [1930] –
Residue to set up ‘Gwyon’s Boys Clothing Foundation’ to provide ‘knickers’ (short trouser)
for boys 10-15yrs living in Farnham

HELD: failed – no condition required/suggested poverty i.e. does not prevent very
wealthy boys benefiting

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S3(1)(c) CA 2011 -
THE
ADVANCEMENT
OF RELIGION
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Charitable Purpose - Religion
S3(1)(c) CA 2011- Advancement of Religion
Meaning of Religion
Worship of a God? But some branches of Buddhism?

Charities Commission (2008) (2013)

“Belief in a god (or gods) or goddess (or goddesses), or supreme being, or devine or
transcendental being or entity or spiritual principle, which is the object or focus of the religion”

“A relationship between the believer and the supreme being or entity by showing worship,
reverence or veneration”

“A degree of cogency, cohesion seriousness and importance”

“An identifiable positive, beneficial, moral or ethical framework”

Charitable Purpose - Religion
S3(1)(c) CA 2011- Advancement of Religion
Meaning of Religion

Includes non-deistic religions i.e. Druids

Scientology? (Charities Commission 1999)

Thornton v Howe (1862) – Trust for the publication of Joanna Southcote

Charitable Purpose - Religion
S3(1)(c) CA 2011- Advancement of Religion
Meaning of Advancement

Unitied Grand Lodge of Ancient Free and Accepted Masons of England v Holborn
Borough Council [1957]
“Taking positive steps to promote or spread religious belief”

But not the converting of one religion to another – Pemsel

Neville Estates v Madden [1962]

“As between different religions the law stands neutral”
Charitable Purpose - Religion
S3(1)(c) CA 2011- Advancement of ReligionPublic benefit
Public benefit
• Historically public benefit presumed for relief of poverty

• Presumption abolished by CA 2006 and 2011

Two elements:
(i) identifiable benefit
(i.e. nature of purpose)
AND
(ii) to the public
(i.e. sufficient numbers to benefit).......
Charitable Purpose - Religion
S3(1)(c) CA 2011- Advancement of Religion
Public benefit

“Public”

Glimour v Coats [1949] – Gift to nuns – no ‘public’ benefit

Funnel v Stewart [1996] – gift for ‘faith healing’

Charitable Purpose - Religion
S3(1)(c) CA 2011- Advancement of Religion
Exclusively Charitable

Must still have exclusively charitable purposes i.e. must be exclusively for religion
Next

Listen to lecture 10.3 – Charitable Trusts: The Doctrine

of Cy-Pres