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Charitable Trusts Clements Chapter 10
Normally the law does not allow trusts for purposes
...
A charitable trust can be
designed to achieve a purpose e
...
It is
a requirement that a charitable purpose must be for the public benefit , which has 2
meanings:
1
...

2
...


The advantages of charitable status
 Legal advantages
Charities are not affected by certainty of objects and there is no need to be
identifiable beneficiaries (beneficiary principle), who , if necessary, could enforce a
trust in court
...
There must be somebody, in
whose favour the court can decree performance
...
It would not be
possible to identify all the beneficiaries and it does not matter that 'poor' is a fairly
vague definition
...
Nowadays the Charity Commissioners would do this on behald
of the AG
...


1

No perpetuity rule : It is not usually legal to set up a trust that lasts forever, which is
known as perpetual duration
...
This rule does not apply to charitable trusts,
which can last for any length of time
...
They do not have to pay income tax if this money is applied for charitable
purposes
...

Donations to charities during the donor's life are exempt from capital transfer tax
and when the donor dies, from inheritance tax
...

Charitable premises can claim an 80% reduction in non-domestic rates
...


The Charity Commission
This body was originally established in 1853 but is now governed by the Charities Act
2011
...

2The public benefit objective
The public benefit objective is to promote awareness and understanding of the operation of
the public benefit requirement
...

4The charitable resources objective
The charitable resources objective is to promote the effective use of charitable resources
...


15The Commission's general functions
(1)The Commission has the following general functions—
1Determining whether institutions are or are not charities
...

3Identifying and investigating apparent misconduct or mismanagement in the
administration of charities and taking remedial or protective action in connection with
misconduct or mismanagement in the administration of charities
...
It is only if there is disagreement with their decision that the matter goes to
the court
...
There is a further appeal to the Court of Appeal
...

After the Reformation in the early 16th century, other bodies and persons provided
some of these services
...

Although the preamble was repealed by the Charities Act 1960, it is still regarded as
the starting point for the definition of charity
...
'
Judges and the Charity Commission start with the preamble and try to find a similar
case to the new charity being proposed
...
The process can be taken further by
then saying that something is similar to that newly accepted charitable purpose and
is in turn charitable
 Incorporated Council of Law Reporting for England and Wales v Attorney
General [1972] Ch 73 - Rullel LJ : 'Of this approach perhaps the most obvious
example is the provision of crematoria by analogy with the provision of burial
grounds by analogy with the upkeep of churchyards by analogy with the
repair of churches'
The proposed charity must be exclusively charitable
...
If it was also doing
non charitable things it would lose its charitable status
...

2
...

4
...
But three things may be said
about it
...
) or under the old law,
(ii)that may reasonably be regarded as analogous to, or within the spirit of, any purposes
falling within any of paragraphs (a) to (l) or sub-paragraph (i), or
(iii)that may reasonably be regarded as analogous to, or within the spirit of, any purposes
which have been recognised, under the law relating to charities in England and Wales, as
falling within sub-paragraph (ii) or this sub-paragraph
...
Public benefit
contains 2 elements:
1
...

2
...

This was confirmed in: R (Independent Schools Council) v Charity Commission for
England and Wales , AG v Charity Commission and the Independent Schools Council
[2012] 1 All ER 127
 Incorporated Council of Law Reporting for England and Wales v Attorney
General [1972] Ch 73 - The question was whether the production of a system
of law reports was charitable or not
...

Sachs LJ at 95 :
'Does it benefit a sufficiently wide section of the community ? As satisfactory
administration of the law in practice depends on there being a proper system of law
reporting, it can well be said that the whole community benefits from the purposes of
the council: but even if the benefits were confined to those who have to make judicial
decisions and to the members of the legal profession advising clients and appearing
for them in court, none the less a sufficiently large section of the community would
derive the relevant benefits'
...
4 of the Charities Act 2011 requires that all charities, under whichever head , must
demonstrate that they are for the public benefit
...

Key point : Charitable benefits do not have to be provided for free
...
But it has never been held that objects, otherwise
charitable, cease to be charitable if beneficiaries are required to make
payment for that they receive
...
the objects and activities of the non profit earning
charitable organization ceases to be charitable
...

 Held : This guidance over simplified the legal position
Education was accepted as being socially useful and so passed the first
requirement of public benefit : 'Educational trusts of an ordinary sort are seen as
being for the public benefit in the first sense because of the value to society of having
an educated population
...
'
A charity must not exclude the poor, but it can charge fees for the services that it
provides : 'the conclusion is based on the proposition that a trust which excludes the
poor cannot be a charity
...
'
The tribunal then explained how these definitions of public benefit applied to fee
charging schools
...

Key point : A charity must be for the public benefit
...
It also means that the services that the charity provides must be
available to the public, either directly to the recipients of the chartable services or
indirectly to the wider public
...
The preamble refers to the relief of poor people, and as G
Cross has remarked at (1956) 72 LQR 187 at 206 ' Poverty is a vague word which has
meant different things at different times and in different places'

7

The Charity Commission suggests substituting 'people on low incomes' as a more
modern equivalent to of 'the poor' and even provides a definition : those households
living on less than 60% of average income or people living at or below the level of
income support
...
of the
...
as the
bank shall in its absolute discretion consider by reason of his financial
circumstances to be most deserving of such assistance
 Held: This was a valid charity
Evershed MR at 666 : It is quite clearly established that poverty does not mean
destitution; it is a word of wide and somewhat indefinite import, it may not unfairly
be paraphrased for present purposes as meaning persons who have to 'go short' in
the ordinary acceptation of that term, due regard being had to their status in life,
and so forth
...
The provision
of housing was regarded as within the relief of poverty
The court, however, must be satisfied that the benefits of the charity are aimed
exclusively at the poor
...
This was fatal to charitable status
...
or within a radius of 5 miles
therefrom'
 Held : Harman J : The phrase 'working classes' did not necessarily mean poor
people and therefore this trust was not charitable

 Re Niyazi [1978] 1 WLR 910 - Niyazi left property , which turned out to be
worth £15,000 , for the 'constructive of or as a contribution towards the cost
of a working men's hostel ' in Famagusta , Cyprus
 Held: Megarry VC at 915 : He felt that Re Sanders could be distinguished
8

'The word hostel has to my mind a strong flavour of a building which provides
somewhat modest accommodation for those who have some temporary need for it
and are willing to accept accommodation of that standard in order to meet the need
...
The money is given
for the purpose of 'construction of a working men's hostel in Famagusta, Cyprus
...

The other consideration is that of the state of housing in Famagusta
...
Quite
apart from any question of the size of the gift, I think that a trust to erect a hostel in
alsum or in an area of acute housing need may have to be construed differently from
a trust to erect a hostel in an area of housing affluence or plenty
...
'
Key point : It is common to restrict a charity to a particular area
...

 Re Gwyon [1930] 1 Ch 255 -The testator attempted to set up the 'Gwyon's
Boys Clothing Foundation' which was to provide 'knickers' to boys aged
between 5-15 in Farnham and District
...
They must not be supported by any other
charity, must nor receive poor relief, must not be black, and when they
returned the knickers, in order to obtain a new paid, it must be still possible
to read 'Gwyon's Present' which was printed on the waistband
...


Public benefit and the relief of poverty
It is assumed that relieving poverty is a socially useful thing to do and the normal
requirement that the benefit of the charity should be available to the public or a
section to the public does not apply
 Re Scarisbrick [1951] Ch 622 - The testatrix's will provided that, the residue
of her estate should be held upon trust 'for such relations of my said son and

9

daughters as in the opinion of the survivor of my said son and daughter's
shall be in needy circumstances'
 Held: Jenkins LJ : 'Accordingly , in the view I take, this is a trust for the relief of
poverty in the charitable sense amongst the class of relations described, and,
being a trust for the relief of poverty, is in view of the exception above stated,
not disqualified from ranking as a legally charitable trust by the
circumstances that its application is confined to a class of relations (albeit a
wide class), with the result that its potential beneficiaries do not comprise the
public or a section thereof under the decision to which I have referred
...

I think the true question in each case has really been whether the gift was for
the relief of poverty amongst a class of persons, or rather
...
'
This was acceptable, because the trustee could select amongst the category of poor
relatives
...

Charities for poor relations are such established exception to the normal approach of
to public benefit, that even more borderline cases have been accepted :
 Re Segelman [1996] Ch 171 - The will of Gerald Segelman set up a trust for 21
years, for poor and needy members of his relations, naming 6 individuals and
their issue
...
Not all the members of the class were poor
...
However, it was still a charity
'The basis for disqualification as a charitable gift must be that the restricted nature of
the class leads to the conclusion that the gift is really a gift to the individual
members of the class
...
The gift with which I am concerned has , in common with the gift which
the Court of Appeal had to consider in Re Scarisbrick, the feature that the class of
those eligible to benefit was not closed upon the testator's death
...
During that period issue of the named individuals
born after the death of the testator will become members of the class
...
The company had over 600 employees and a substantial
number of ex- employees
...
e tax saving
The particular case, however, fell within the poverty exception, where public benefit
was treated differently
...
Moreover, though
not as old as the 'poor relations' trusts , 'poor employees' trusts have been
recognised as charities for many years; there are now a large number of such trusts
in existence; and assuming, one must, that they are properly administered in the
sense that benefits under them are only given to people who can be fairly said to be,
according to current standards, 'poor persons' , to treat such trusts as charities is not
open to any practical objection'
Lord Cross did not want to remove charitable status from trusts that had been
operating for some time to help the poor, particularly as there was no evidence that
charities to relieve poor employees were being abused to gain tax advantages
...
3 of the Charities Act 2006 (now s 4 of Charities Act 2011)
changed the law, by requiring all categories of charity , including charities for the
relief of poverty, to prove that they were for the public benefit
...


Attorney- General v The Charity Commission for England and Wales [2012]
WTLR 977 -The law was not changed by the 2006 Act
...
All charities must be 'socially useful - an essential requirement of charitable
status and poverty charities would usually fulfill this requirement
2
...

2 opinions : either that poverty charities used a different and wider definition of
what was available to the public or that they were exempt from the public
availability requirement
The Tribunal decision was that charities for the relief of poverty were exempt from
the requirement to be available to the public or a section of the public
Held : Warren J : The 2006 Act has not , in our judgment , changed that
...
Of course, a trust for the relief of poverty might be one which
is also for the public benefit in the second sense because the class of potential
beneficiary is, on my view, a sufficient section of the community
...

Apart from trusts for the relief of poverty , there are also trusts for the prevention
of poverty
...
We take this as some indication that,
for the future at least, Parliament saw no real distinction between the prevention and
relief, although we acknowledge that these two purposes could be pursued
independently
...

Key point : Under the poverty head, public benefit is treated differently from under
the other heads of charity
...


The advancement of education
Education includes teaching and research
12

 Re British School of Egyptian Archaeology [1954] 1 All ER 887 - The school
discovered knowledge about ancient Egypt, published on this subject, and
trained students in excavation
...

On that view, the school is clearly a charity
...
Its objects were to find the 'Bacon Shakespeare manuscripts' , to study the works of Francis Bacon, and 'to
encourage the general study of evidence in favour of Francis Bacon's
authorship of the plays commonly ascribed to Shakespeare'
Held: Wilberforce : 'I think, therefore that the word 'education' as used by Harman J
in Re Shaw [1957] must be used in a wide sense, certainly extending beyond
teaching, and that the requirement is that, in order to be charitable, research must
either be of educational value to the researcher or must be directed as to lead to
something which will pass into the store of educational material, so as to improve
the sum of communicable knowledge in area which education may cover -education
in this last context extending to the formation of literacy taste and application
I accept that research of a private character, for the benefit only of the members of
a society , would not normally be educational - or otherwise charitable
...


...
The discovery of such manuscripts, or of one
such manuscript, would be of the highest value to history and to literature'
 Re Lopes [1931] 2 Ch 130 - Lopes left money in her will towards an upkeep of
the London Zoological Gardens
...
The next of
kin questioned whether the zoo was a charity, as food and amusements were
also provided
...

13

Key point : Education is not confined to teaching and research, but can also include
museums, art galleries, and even zoos
...
The teaching, promotion and encouragement in Ireland of
self-control, elocution, oratory, deportment, the arts of personal contact of social
intercourse, and the other arts of public, private, professional and business life
...
I think that 'education' includes not only teaching , but the
promotion and encouragement of these arts and graces of life which are, aftr all,
perhaps the finest and best part of the human character
...


The value of education provided
The court needs to make a judgment on the value of education and whether it is
worthwhile
...
The National Trust refused to take this collection of pictures,
furniture, china, glass and objets d' art
...
He made a number of observations
'
...
The testator's own paintings, of which there are over 50, are said by
competent persons to be in an academic style and 'atrociously bad' and the other
pictures without exception worthless'
The testator might think that the education that they are providing is worthwhile,
but the court decides whether it actually is
...

A trust to promote the musical works of a well-known and well respected composer
did not cause so much difficulty and was granted charitable status:

14

 Re Delius [1957] Ch 299 - Roxburgh J : I do not find it necessary to consider
what the position might be if the trustees were for the promotion of the
works of some inadequate composer
...
I do not know,
but I need not investigate that problem, because counsel who have argued
before me have been unanimous in the view that the standard of Delius' work
is so high that the question does not arise in the present case
...
Charitable status cannot be used to force the testator's eccentric views upon
the public
...
ascertain by inquiry how much time and money could be saved by a new
British alphabet of 40 letters
ii
...
This would be an example of how good the
alphabet would be
...
Therefore I reject this element
...


Political purposes
Trusts to promote a political purpose cannot have charitable status
...
Nor do
the courts wish to assess whether a change in the law would be beneficial or not
...
The abolition of religious tests, the disestablishment of
the Church, the secularization of education, the alteration of the law touching
religion or marriage
...
Equity has always been held
invalid , not because it is illegal, for everyone is at liberty to advocate or
promote by any lawful means a change in the law, but because the court has
no means of judging whether a proposed change in the law will or will not be
for the public benefit, and therefore cannot say that a gift to secure the
change is a charitable gift
...
The relief of needy persons, such as prisoners of conscience and the relatives
and dependants of prisoners of conscience -charitable
B
...
The abolition of torture and inhuman and degrading treatment or
punishment-political
D
...
Dissemination of such research-charitable
Since element B and C were too political , and they were the main objects of the
trust, the whole trust was void as a charity
...
Its activities were to
campaign against militarism, military interventions in foreign countries, and
the activities of NATO
...
because the court cannot determine (and should not attempt to
determine) whether policies adopted by the government of the UK and other
Western governments are or are not for the public benefit
...
Trying to
publicise one point of view and persuade the public that it is the right is, however,
not charitable
...
The conferences
discussed subjects that were recognised academic subjects in higher
education and encouraged 'an exchange of views in a manner familiar in
places of higher education'

16

 Held : Slade J
...
Nor, so far as the evidence shows, are they designed to procure
changes in the laws or governmental policy of this or any other country: even
when they touch on political matters, they constitute, so far as I can see, no
more than genuine attempts in an objective manner to ascertain and
disseminate the truth
...
'Political' means :




supporting a political party
trying to change the law
trying to change government policy

The Charities Act 2011 restates but appears not to change the law
...


Public benefit in the advancement of education
The benefits of a trust must be available 'for the benefit of the community or an
appreciable important class of the community' for the trust to be a charity
...

There must be no 'personal nexus' - the beneficiaries must not be defined by their
relationship to a particular individual or individuals :
 Re Compton [1945] Ch 123 -Compton's will provided funds to be applied
forever to provide for the education of the lawful descednants of HC
Compton, Weyland Powerll, and William, Earl of Sandwich
 Held : This was a family trust to pay for the education of the children of the
Compton , Powell and Montague families
...


17

Charities to relieve poverty do not insist that there is no personal nexus between
the testator /settlor and the objects of the charity
...

 Oppenheim v Tobacco Securities Trust Co [1951] AC 297 - John and Elizabeth
Phillips established a trust to produce income for the education of the
children of employees of former employees of British American Tobacco Co
Ltd
...
'first
...
I come , then , to
the present case where the class of beneficiaries is numerous but the difficulty arises
in regard to their common and distinguishing quality
...
I can make no distinction
between children of employees and the employees themselves
...
He though that it was a valid charitable trust
...

Dingle v Turner [1972] -The dissentients Lords MacDermott and Cross disliked the
personal nexus test favoured by the majority and instead proposed no definite test
...
These must be available to the general public and not
restricted to employees of a company
...
However, if the majority of the charitable trusts are in fact given to the children
of company employees, that is unacceptable
...


The advancement of religion
The definition of religion
The 1601 Preamble only refers to 'the repair of churches' , but despite this trust to
promote Christianity have always been charitable
...
The Secular Society's main object
was:
To promote , in such ways as may from time to time be determined, the principle that
human conduct should be based upon natural knowledge, and not upon super-natural
belief, and that human welfare in this world is the proper end of all thought and action
...
The HL decided that disputing religion in a
rational , serious manner was not blasphemy
...

Held: Lord Parker of Waddington : He considered the history of religious trusts and
explained that before the Reformation 'that form of Christianity now called Roman
Catholic was undoubtedly within the rule'
...
First it was non-conformists, but it was not until the 19th century that
Roman Catholicism was accepted again
...

'It would seem to follow that a trust for the purpose of any kind of monotheistic
theism would be a good charitable trust'
 Re South Place Ethical Society (Barralet v AG) [1980] 1 WLR 1565 - The
society had originally been a Unitarian chapel, but had changed in 1887 to an
ethical society
...
' It held
Sunday meetings and lectures, at Conway Hall, which were open to the
public
...

 Held : Dillon J : The court adopted a definition of religion from the Oxford
English Dictionary : A particular system of faith and worship
...

Religion, as I see it, is concerned with man's relations with God, and ethics are
concerned with man's relations with man
...
The first part of the
objects is the study and dissemination of ethical principles
...

 United Grand Lodge v Holborn BC [1957] 1 WLR 1080 - A Freemason's Losge
was held not to be charitable
...
To advance religion means to promote it, to spread its
message ever wider among mankind to take some positive steps to sustain
and increase religious belief
...
For masonry really does something different
...
'
Key point : A religion requires god, worship of that god, and active promotion of
the religion

When is a religion unacceptable ?
A religion may have a few followers and be thought to have no truth by others, but
that does not matter if it meets the general definition explained above
...
It is not possible for a court to decide whether
someone believes is true or not
...
in propagating the truth as given in the Holy
Bible
...


 Le Cren Clarke ( Funnell v Stewart ) [1996] 1 WLR 288 - Miss Le Cren Clarke
had run a small religious healing movement at her home in Hastings for 30
years or so
...

 Held : there would also be a religious service once a week
...
The religious beliefs were within the Christian tradition
and this met the definition of a religious charity
...

 Thornton v Howe (1862) 31 Beav 14 - Joanna Soutcott was a domestic
servant in Exeter and a Methodist, who then claimed that she was a
prophetess and gathered many followers , who were known as Southcottians
or British Israelites
...
Instead she died
...
It was opened in 1927, in the presence of one bishop, and contained
a few papers and a lottery ticket (not the winning number) A follower ,
Essam, left money to the trustee, Howe , to pay for printing , publishing and
propagation of the sacred writings of the late Joanna Southocott
 Held : Sir John Romilly MR : Read her writings and came to the conclusion
that it was a religious charity
'In truth, though her works are in a great measure incoherent and confused, they are
written obviously with a view to extend the influence of Christianity'
The judgment gives no clue as to what would be regarded as an immoral religion, but
a concern at the time about the Soutchottians, and other similar cults, was that they
practiced sex outside marriage and encouraged followers to leave their families and
jobs to join the cult
...
A charity commission ruling
on 10 Dec 1999 concluded that scientology did not meet the case law definition for
religion
...
The Charity
Commissioners grant charitable status to all the major world religions, eg Hinduism,
Sikhism, Islam, Judaism, Buddhism
...

Re South Place Ethical Society (Barralet v AG) 1980 did discuss whether Buddhism
has a god or not, but came to no conclusion
...

ii
...
The public must have some access to the benefits of the religion
...
The Prioress, Ethel
Gilmour, asked the court whether this was a charity
...

Contemplative orders could be distinguished from active orders, which
went out into the world teaching , nursing the sock, and tending to the
poor
...
Their prayers were on behalf of all mankind a and drew down the grace of God
...
Their lives, dedicated to prayer, set a good example for the rest of society
22

3
...

Held : The HL rejected all these arguments, because it considered itself bound by
earlier cases that denied such religious orders charitable status
...
The court would not accept that becoming a nun was
just like winning a scholarship at school
...
At one time such masses had been
illegal as 'superstitious use ' , but had been permitted in the 20 th century
...
The celebration of a religious rite in private does not contain
the necessary element of public benefit since any benefit by prayer or example is
incapable of proof in the legal sense, and any element of edification is limited to a
private , not public, class of those present at the celebration
...
This still satisfies the requirement of public
benefit, because the congregation goes out into the world and mixed with the
public
...
An issue arose as to whether the rusts of the
synagogue were charitable
...
Other members of the public, even Jewish
members, could not
...
As between different religions the law stands neutral, but it
assumes that any religion is at least likely to be better than none'
Key point : Public benefit requires that the religion is available to the general
public
...


Other purposes beneficial to the community
The 4th head of charity is very broad , containing all sorts of different kinds of
charity
...
The court, however, will not recognise a new type of charity , unless
it bears some relationship to existing types
...

 Helena Partnerships Ltd (formerly Helena Housing Ltd) v Revenue and
Customs Commissioners [2012] 4 All ER 111 - HP was a registered social
landlord, which took over council housing from St Helens Metropolitan
Borough Council
...
It also
provided other housing services, such as selling houses and managing
properties for house owners
...
Just because what Helena did was for the public
benefit or of general public utility, did not necessarily mean that it was
charitable
Lloyd LJ at 134 : 'It is not sufficient to assert, or even for the relevant constituent
document to stipulate, that the activities or operations of the body in question are to
be undertaken for the benefit of the community
...
The purpose or
purposes must be of the right kind, falling within the spirit and intendment of the
preamble , directly or by analogy'
Providing housing for poor tenants would be charitable, but the Partnerships' other
activities were not
...
there is also a substantial elements of benefit to
individuals, which cannot be regarded as only subordinate to the achievement of the
benefit to the community
...
The recipients of the charity
do not have to be aged, impotent AND poor
...
The beneficiaries do not have to be aged
and poor , or impotent and poor
...
Here I think that the old people over 65 years in a
particular parish are a class of persons just as much objects of charity, having
regard to the preamble of the statute, as the poor of the parish or the sick of
the parish'
So the beneficiaries need only be old, they do not need to be poor as well
 Re Lewis [1955] Ch 104 - Mark Lewis left a will, which included the following
disposition : 'I leave to 10 blind girls Tottenham residents if possible the sum
of £100 each
...
A
children's home would normally be charitable, but not if it goes beyond relieving
need
...

At that date, televisions were a rare and luxury item
...

 Joseph Rowntree Memorial Trust v Attorney General [1983] Ch 159 - The
charity sold lease housing, designed for their needs, to the elderly
...
The Charity
Commission had refused charitable status
 Held : Gibson J : '
...
The word 'relief' implies that the persons ins
question have a need attributable to their condition as aged, impotent or
poor persons which requires alleviating, in which those persons could not
alleviate, or would find difficulty in alleviating, themselves from their own
resources
...
Thus a gift of money to the aged millionaires of Mayfair would not
relieve a need of theirs as aged persons
...

In Rowntree , the housing was sold at near market value and it is not unusual for
charities to charge fees for their services
...

Key point : Charities must relieve need
...


Public benefit in charities to relieve the aged and impotent
Looking after the sick qualifies as charitable
...

 Re Resch's Will Trusts [1969] 1AC 514 - The will of Edmund Resch left AU
$8,000,000 to the sisters of Charity for a period of 200 years or for so long as
they shall conduct St Vincent's Private Hospital
...
The private hospital
was opened to help meet the pressing demand for hospital beds and give
those patients who desired it more privacy and confort
 Held: Lord Wilberforce :
Can a charity that charges for its services provide public benefit? Disqualifying
indicia may be either that the hospital is carried on commercially, ie with a view to
making profits for private individuals, or that the benefits it provides are not for the
public, or a sufficiently large class of the public to satisfy the necessary tests of public
character
...
Non profit making: As regards these purposes, it appears from the evidence
already summarised, that the making of profits for the benefit of individual is
not among them
...
The poor are not excluded -It would be a wrong conclusion to state that a trust
for the provision of medical facilities would necessarily fail to be charitable
merely because by reason of expense they could only be made use of by
persons of some means
...
The test is essentially one of public
benefit, and indirect as well as direct benefit enters into account
...
It is not disputed that a
need exists to provide accommodation and medical treatment in conditions of
greater privacy and relaxation that would be possible in a general hospital and
as a supplement to the facilities of a general hospital
...
The service is needed
by all, not only by the weell to do
...
The general benefit to the
community of such facilities results from the relief to the beds and medical staff
of the general hospital, the availability of a particular type of nursing and
treatment which supplements that provided by the general hospital and the
benefit to the standard of medical care in the general hospital which arise from
the juxtaposition of the two institutions
...

S4 of the Charities Act 2011 requires all charities to demonstrate that they are for
the public benefit
The approach to public benefit in Re Resch is confirmed as correct in the
advancement of education case R(Independent School Council ) v Charity
Commission for England and Wales , AG v Charity Commission and the
Independent Schools council [2012] 1 All ER 127
The Charities Act 2011 , s 3(1)

27

j) the relief of those in need by reason of youth, age , ill health, disability, financial
hardship or other disadvantage
Key point : Charities may charge for the services that they provide
...


Saving lives
The Preamble allows for the 'repair of bridges, ports, havens, causeways , churches,
seabanks, and highways'
...
By extension this has been taken into account to mean that various kinds of
rescue service are entitled to charitable status, because they also save lives
...

Charities can also be established to help the victims of natural disaster and
war, but care must be taken not to go beyond just relieving 'need' as in
Joseph Rowntree
...
The public raised money to help them,
but it could not be a charity because after the dead were buried and the
injured were treated, free by the National Health Service, there was no
further 'need' to be relieved
Patriotic gifts to help the armed forces ( Re Gray [1925] Ch 362 )or even 'unto
my country England to and for - own use and benefit absolutely' ( Re Smith
[1932] 1 Ch 153) , have been held to be charitable
Guidance by the Charities Act 2011
s
...
As early as 1857, the courts held that a bequest for the establishment
of a hospital in which animals, which are useful to mankind, should be properly
treated and cured, and the nature of their diseases investigated, with a view to
public advantage --> charitable : University of London v Yarrow (1857) 1 De G & J
72
28

 Re Douglas [1887] 35 ChD 472 - The will of Elizabeth Douglas left £100 to a
'Home for Lost Dogs', amongst other charities
...
when an institution is referred to which is for the benefit of
domestic animals, that is so far a benefit to the human species who are
served by the domestic animal, that the institution itself may well be treated
as a charity
...
'

To reduce the pain and suffering of animals
 Re Wedgwood [1914] 1 Ch 113 - Frances Wedgwood established a secret
trust 'for the protection of animals' or 'for the protection and benefit of
animals'
...


 Held : Lord Cozens-Hardy : 'Apart from authorities which are binding upon us,
I should be prepared to support the trust on the ground that it tends to
promote public morality by checking the innate tendency to cruelty'
These charities benefit the human public, because they make them better people
Key point : To be a charity the trust must either help domestic animals or reduce
cruelty to animals
...
The society was to be run by anti-vivisectionists and
those opposed to all sport involving the pursuit of death of any deer, fox ,
rabbit
...

 There was no public benefit

29

Key point : Public benefit in an animal charity requires helping animals useful to
man, reducing cruelty to animals, which makes mankind better or at least allowing
public access
...
The reasons why are explained in:
 Re Nottage [1895] 2 Ch 649 - Charles Nottage left a will which contained a
bequest to the Yacht Racing Association of Great Britain to constitute a trust
fund to buy a cup, 'the Nottage Cup' , to be awarded to the most successful
yacht of the season
...
Giving it charitable status and tax concessions
hardly helps the rest of society
...

Which sports should be granted charitable status and which should be denied? If
football was given charitable status, should it be granted to darts or hunting and
shooting and fishing?

Sports as part of education
Sport can be charitable as part of the education of the young
...

 Re Mariette [1915] 2 Ch 284 - The bequest was to provide courts for the
playing of Eton fives and squash rackets at Aldenham School
...
A schoolteacher gave evidence that chess was a game of skill
and educational
...

 Held: Evidence was accepted that the playing of chess had educational value
Not all sports could be regarded as contributing to the education of the young, but
judges could make decisions as required on whether a sport qualified for charitable
status
...
3(1)(g) states that 'the advancement of amateur sport' is a
charitable purpose
...
There is nothing to say that the sporting charity needs to be educational
and restricted to the young
...


Sport and public benefit
The provision of parks and playing fields for open air recreation is considered to be
charitable :
 Re Hadden [1932] 1 Ch 133 - Hadden left a will to provide an open air
recreation for as many working people as possible, in Nottingham, by the
provision of playing fields or gymnasia
...


31

The difference between this and cases such as Re Nottage is that the charity is
open to all
...

It is common to make a charity only available to the inhabitants of a town or district
 Verge v Somerville [1924] AC 496 - This involved a Repatriation Fund for
soldiers returning to New South Wales, Australia
...

 Williams Trustees v IRC [1947] AC 447 - Williams set up an institute and
meeting place in London known as :
The London Welsh Association for the benefit of Welsh people resident in or near or visiting
London with a view to creating a centre in London for promoting the moral social spiritual
and educational welfare of Welsh people and fostering the study of the Welsh language and
of Welsh history literature music and art
...

 IRC v Baddeley [1955] AC 572 - The Stratford Newtown Methodist Mission
had some land, with a church, lecture room and store and the trustees were
to use this property for the promotion of the religious, social and physical
well being of persons resident in West Ham and Leyton
...

 Held : This was not a charity
...
The
Methodist Mission was also a social club rather than a charity
...


32

Lord Reid dissented
...
More importantly he differed in his interpretation of public
benefit
...
Following Verge v Somerville , he could not see why Methodists in
West Ham and Leyton could not be 'a particular class of the community'
Key point : Public benefit in recreational charities means that the charitable
benefits should be available to the whole community
...

(1)It is charitable (and is to be treated as always having been charitable) to provide, or assist
in the provision of, facilities for—
(a)recreation, or
(b)other leisure-time occupation,
if the facilities are provided in the interests of social welfare
...

(3)The basic conditions are—
(a)that the facilities are provided with the object of improving the conditions of life for the
persons for whom the facilities are primarily intended, and
(b)that—
(i)those persons have need of the facilities because of their youth, age, infirmity or disability,
poverty, or social and economic circumstances, or
(ii)the facilities are to be available to members of the public at large or to male, or to female,
members of the public at large
...

But this is subject to the requirement that the facilities are provided in the interests of social
welfare
...
It is arguable that it does not change the position of a trust aimed at the Welsh
and East Ham Methodists
...
In IRC v
McMullen 1979 , the CA thought that the Act required recreational trust to be
aimed at a 'deprived' group
The HL corrected this misapprehensions in :
 Guild v IRC [1992] 2 AC 310 -This was a bequest to a sports centre in North

Berwick, which was open to the whole community
...
It suffices if they are provided with the
object of improving the conditions of life for members of the community
generally
...
'
The Charity Commission will only register a recreational charity if it benefits the
public or a sufficient section of the public
...
The law is still trying to guard against
private members -only sports and social clubs gaining charitable status
...
S62 of
Charities Act 2011 recognises a number of situations where this is so
...

Example : Charities last for 100's of years so what was a good charitable purpose at
the time becomes outdated :
 Re Campden Charities (1881) 18 Ch D 310 - Viscount an Viscountess Campden
left land in Shepherds Bush and Kensington that produced an annual income of
£10
...
This was in 1651, when SB
and K were rural villages
...
The Charity Commission drew up a
scheme to spend the money more widely
...
Apprenticeships were still to be
provided, but there was also to be scholarships and the education of deaf and
dump children
...

34

More modern example where a religious chairty had split and some followers of the
religion no longer wished to worship with the others:
 White and others v Williams and others [2010] PTSE 1575 - The trustees of
the Bibleway Church UK held a number of churches which were used by local
congregations
...
The Lewisham congregation decided to leave entirely and establish
itself as the Tabernacle Ministries of Great Britain , but wanted the church
they used to be transferred to them
 Held : It was no longer suitable or acceptable for the Lewisham congregation
to remain under the control of Bibleway, who were not sympathetic to their
beliefs
...


Subsequent failure
This is where the property has been given to a valid, operating charity that then
ceases to operate
...

 Phillips v The Royal Society for the Protection of Birds [2012] EWHC 618
(Ch)- The will of Vera Spear left money to 'The New Forest Owl Sanctuary Ltd'
(NFOS)
...
Spear died on 5 Jan 2007 , but NFOS has ceased to operate by
13 July 2006
...

 Held: Mrs
...
The charity did not fail until a month later, so her property
remained charitable and did not revert back to her relatives

Initial failure
This is where the charity failed from the start, usually the date of death of the
testator
...
for the general
purposes of the said Church'
...
Then Mrs
Shroder ran it, conducting services for a very small congregation until her
death, when the Church ceased to operate
...

 Held: Proudman J : Was her gift charitable in the first place? It was a charity
for the advancement of religion
...
In contrast, Mrs
Schroder had kept bank account for the Church , which still had money in them
...
The bank account money could
be applied cy-pres
...

If it is a case of initial failure, as seen in Kings, the courts have to be satisfied that the
testator would not have minded his property going to another, similar charity

A specific charitable intent
Examples of gifts that were so specific that the court felt unable to give the property
to another charity
...
It will go to the next of kin
 Re Rymer [1895] 1 CH 19 - Rymer had a legacy of £5,000 in his will 'to the
rector for the time being of St Thomas's Seminary for the education of priests
in the diocese of Westminster'
...
The legacy went back into the
residue of Rymer's estate, Rymer had chosen one particular seminary and no
other
 Re Spence (Deceased) [1979] Ch 483 - The testatrix made her will in 1968
and left half the residue to the Old Folks Home at Hillworth Lodge, Keighley
for the benefit of the patients
...

 Held : Mrs Spence only intended to benefit this particular old people's home,
not old people's home in general
36

A general charitable intent
A gift to a charity that never existed indicates general charitable intention
...
The testatrix died in1934
...
There was no record by any Peace
Society ever having existed in Belfast
...

 Held : No general charitable intent with regard to WS
...
The same applied to the DS
...
Both had ceased to exist between the date
of the will and the date of death
...
IF the institution was Unincorporated, it
was assumed that there was a general charitable intention
...

 If the institution is incorporated, it was assumed that it was a gift to that
institution and no other
...
Nine were selected from the London
telephone book
...

 Held : There was a general charitable intention
Key point : A finding of general charitable intent means that the charitable gift can
be reassigned to another charity
...
6 were to go to charitable institutions, but the seventh was to
go to the British Union for the Abolition of Vivisection to do all in its power to
urge and get an Act passed prohibiting unnecessary cruelty to animals
...
The other 6 charitable gifts did not make this one charitable
...
This is not charitable ,as it is deemed political ( National Anti-Vivisection
Society v IRC [1948] AC 31 )
A non charitable gift cannot be turned into a charitable one by cy- pres
...


Amalgamation and merger of charities
It is always possible that cy-pres will not be needed if the charity continues in
another form
...

 Re Faraker [1912] 2 Ch 488 - Mrs Faraker died in 1911 leaving to 'Mrs Bayly's
Charity, Rotherhithe'
...
In 1905 the Charity
Commissioners had amalgamated the Bayly Charity, with other Rotherhithe
charities
...
Widows who had received pensions from the
Bayly Charity continued to be paid
...


38

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