Charitable Trusts

Question 1

What statute regulates the Charity Commission?

Answer 1

Charities Act 2011

Question 2

Definition of charitable purpose

Answer 2

A purpose that falls within the technical meaning or one that is deemed to be within the spirit of the 1601 Statute of Elizabeth

Question 3

Charitable purpose

Answer 3

s1 Charities Act 2011

• Falls within s3(1)
• Is for the public benefit (s4)

Question 4

Things to remember about prevention and relief of property

Answer 4

• 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

Question 5

The benefit aspect of public benefit

Answer 5

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

Question 6

The public aspect of public benefit

Answer 6

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

Question 7

IRC v McMullen 1980

Answer 7

Education should be understood as a “balanced and systematic process of instruction, training and practice containing both spiritual, moral, mental and physical elements”

Question 8

Examples of purposes for advancement of education

Answer 8

Museum - British Museum Trustees
Post - Yates v UCL
Learned societies - Royal Society of London v Thompson

Question 9

Re Shaw 1957

Answer 9

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”

Question 10

Re Hopkins’ Will Trust 1965

Answer 10

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”

Question 11

Public benefit in advancement of education

Answer 11

The Compton rule

Question 12

Oppenhaim v Tobacco Securities Trust 1951

Answer 12

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

Question 13

Re Kottegen 1954

Answer 13

“To provide education for those wanting it with preference to employees of X providing no more than 75% spent on employees each year” valid

Question 14

IRC v Baddeley 1955

Answer 14

“Religious, social and physical wellbeing of persons resident in West Ham and Leyton if they are members of the church” fails

Question 15

Historical, meaning of religion in the context of charitable trusts

Answer 15

Two essential attributes - faith in a god and worship of that god (Re south Place Ethical Society 1980)

Question 16

Assumption about the public benefit of advancement of religion

Answer 16

That public gets a benefit from people of faith being part of a community

Question 17

Test for public benefit

Answer 17

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

Question 18

Gilmour v Coats 1949

Answer 18

Carmelite nuns in a secluded order, no public benefit in advancement of religion

Question 19

Things to remember about advancement of health or saving lives

Answer 19

• 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

Question 20

What test is used for the advancement of the arts, culture, heritage or science?

Answer 20

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”

Question 21

What activities count as the advancement of human rights?

Answer 21

Trying to change the law not okay as “political purpose” (Bowman), but okay to collect data to educate the public or promote current rights

Question 22

Anti-Vivisection Society v IRC 1948

Answer 22

Public benefit from advancing morals and education far outweighed by detriment to medical science; plus political aim to change the law

Question 23

The effect of the doctrine of cy-pres

Answer 23

Surplus funds go to a different charity that is as close to the orginal purpose

Question 24

Does cy-pres apply where there is initial failure of the charity?

Answer 24

Depends on intent:

• If specific charitable intent, and cannot be met, gift fails
• If general intent to benefit charities, can apply generally

Question 25

Does cy-pres apply where there is subsequent failure of the charity?

Answer 25

In the usual case, once property has been dedicated to charitable purposes, it remains charitable in perpetuity