essay on charitable trusts

What is a charitable trust?

Advertiser disclosure.

We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.

Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.

How We Make Money

The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories, except where prohibited by law for our mortgage, home equity and other home lending products. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.

• Share this article on Facebook Facebook
• Share this article on Twitter Twitter
• Share this article on LinkedIn Linkedin
• Share this article via email Email

• Connect with Roger Wohlner on Twitter Twitter
• Connect with Roger Wohlner on LinkedIn Linkedin

• • Investing
• • Wealth management
• Connect with James Royal, Ph.D. on Twitter Twitter
• Connect with James Royal, Ph.D. on LinkedIn Linkedin
• Get in contact with James Royal, Ph.D. via Email Email

The Bankrate promise

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity , this post may contain references to products from our partners. Here's an explanation for how we make money .

Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.

Bankrate follows a strict editorial policy , so you can trust that we’re putting your interests first. All of our content is authored by highly qualified professionals and edited by subject matter experts , who ensure everything we publish is objective, accurate and trustworthy.

Our reporters and editors focus on the points consumers care about most — how to save for retirement, understanding the types of accounts, how to choose investments and more — so you can feel confident when planning for your future.

Editorial integrity

Bankrate follows a strict editorial policy , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.

Key Principles

We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.

Editorial Independence

Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information.

How we make money

You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.

Bankrate follows a strict editorial policy , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers.

We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money.

Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories, except where prohibited by law for our mortgage, home equity and other home lending products. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service.

A charitable trust allows you to donate assets to a chosen tax-exempt charitable organization or nonprofit and comes with certain tax benefits to help you minimize what you might owe to the government. Charitable trusts can also be structured to provide a reliable income stream to you and your beneficiaries for a set period of time.

Establishing a charitable trust can be an important part of your estate plan and a rewarding way to make an impact for a cause you care deeply about.

Types of charitable trusts

There are a few types of charitable trusts to consider based on your situation and what you may be looking to accomplish.

Charitable lead trust

A charitable lead trust is an irrevocable trust that is established to distribute an income stream to a designated charity or nonprofit organization for a set number of years. The trust can be established with a gift of cash or securities made to the trust. Depending on the structure, the donor can benefit from a stream of income during the life of the trust, deductions for gift and estate taxes and current year income tax deductions when the assets are donated to the trust.

If the charitable lead trust is funded with a donation of cash, the donor can claim a deduction of up to 30 percent of their adjusted gross income (AGI) in any single year. Any unused deductions can generally be carried over into the subsequent five tax years. The deduction limit for appreciated securities or other assets is also generally limited to no more than 30 percent of AGI in the year of the donation.

Upon the expiration of the charitable lead trust, the assets that remain in the trust revert back to the donor, their heirs or designated beneficiaries . The assets do not revert to the charity.

Charitable remainder trust

A charitable remainder trust (CRT) works a bit differently than a charitable lead trust. A CRT is an irrevocable trust that is funded with cash or securities. The CRT provides the donor or other beneficiaries with a stream of income with the remaining assets in the trust reverting to the charity upon your death or the expiration of the trust period.

There are two types of CRTs: A charitable remainder annuity trust or CRAT distributes a fixed amount as an annuity each year; no additional contributions can be made to a CRAT. Meanwhile, a charitable remainder unitrust or CRUT distributes a fixed percentage of the value of the trust, which is recalculated annually. Additional contributions can be made to a CRUT.

The steps when using a CRT are:

• Make a partially tax-deductible donation of cash, stocks, ETFs, mutual funds or non-publicly traded assets such as real estate to the trust. The amount of the tax deduction received is a function of the type of CRT, the term of the trust, the projected annual payments (usually stated as a percentage) and the IRS interest rates that determine the projected growth in the asset that’s in effect at the time.
• Receive an income stream for you or your stated beneficiaries based on how the trust is set up. The minimum percentage is 5 percent based on current IRS rules; payments can be made monthly, quarterly or annually.
• After a designated time frame, or after the death of the last remaining income beneficiary, the remaining assets in the CRT revert to the designated charity or charities.

Benefits of a charitable trust

There are several benefits of a charitable trust that make them attractive for estate planning and other purposes.

• A charitable trust is a tax-efficient way to donate to the charities or nonprofit organizations of your choosing. The charitable trust provides benefits to both the charity and the donor.
• The trust provides upfront income tax benefits to the donor when the contribution to the trust is made.
• Donating highly appreciated assets, such as stocks, ETFs and mutual funds, to the charitable trust can help you avoid paying capital gains taxes that would be due if these assets were sold outright. Additionally, the market value of the assets donated is used to determine the value of the donation when calculating the amount that can be deducted for tax purposes.
• A charitable trust can provide income to the donor or their heirs, and in the case of a charitable lead trust, the remaining balance in the trust reverts to the donor or their heirs at the end of a set period of time.
• Donations to a charitable trust can help reduce the value of your estate and reduce estate taxes on larger estates.

Disadvantages of a charitable trust

For all their benefits, charitable trusts do have some disadvantages as well.

• These trusts are generally irrevocable, meaning that you cannot undo the trust if your situation changes and you were to need the money or assets donated to the trust. Once you make the decision to establish and fund the trust, the money is no longer under your control, and the trust cannot be revoked.
• Any income you derive from the trust could reduce the amount that ultimately goes to the charity or nonprofit organization. If your goal is to give the maximum amount directly to the charity upfront, a charitable trust might not be the best vehicle to accomplish this.
• You need to make a large enough contribution to the trust to accomplish the dual goals of providing a significant donation to the charity and providing income to yourself and your heirs.

Is a charitable trust right for you?

A charitable trust may be a good option if you have a desire to create a legacy with some of your assets. If you have appreciated securities or other assets and want to donate them in a tax-efficient way that also generates income for you or designated beneficiaries over a specified period, establishing a charitable trust could make sense.

It might not be the best vehicle for you, however, if you don’t want to give up control of these assets or go through the process (and cost) of working with an attorney to establish the trust . You’ll also have to perform the annual work to maintain it. A less-costly alternative to consider setting up — that comes with many of the same benefits — is a donor-advised fund .

It’s best to consult with a financial and tax advisor if you are thinking about establishing a charitable trust or other tax-efficient ways of making donations to nonprofit organizations.

Related Articles

What is a Roth IRA? How Roth IRAs work, contribution limits and who can open one

What is a blind trust?

Grantor trust: What it is and a guide to how the rules work

How to set up a trust fund

Should You Set Up a Charitable Trust?

An estate plan provides the opportunity to give to good causes.

Getty Images

If you are passionate about a cause, leaving a charitable trust can be a way to make an impact.

If you have extra funds and want to support a cause, a charitable trust might be an option. “A charitable trust can only be set up to give money to a charitable cause, but it also is a valued way to pass assets down to beneficiaries without the burden of estate or gift tax,” says Anthony Martin, CEO of Choice Mutual, based in Reno, Nevada. It can be helpful to understand the basics of how charitable trusts work as you evaluate if one is right for your financial plan.

When thinking about setting up a charitable trust, you’ll want to:

• Recognize the various types of charitable trusts.
• Think through the advantages of a charitable trust.
• Consider the charitable trust disadvantages.
• Review your financial plan.

Types of Charitable Trusts

A charitable trust can be set up in different ways and have various tax impacts. Two common types are the charitable remainder trust and the charitable lead trust. There are variations within these categories as well.

If you set up a charitable remainder trust, you’ll fund it first with cash or other assets. The trust pays out an income stream to your family members or beneficiaries during their lifetimes or for an established period of time. Upon death or when the period expires, the remaining assets go to the charity.

In a charitable lead trust, payments from the trust will be sent first to the charity and the remainder transfers to the beneficiary at the end of the trust term. This type of trust is often funded as part of an estate plan , and can reduce the taxes owed by the beneficiary. “The estate gets a charitable deduction, and the beneficiaries receive the remainder,” says Joanne Burke, founder of Birch Street Financial Advisors in Vienna, Virginia.

When deciding which type of trust to get, it can be helpful to speak to a financial advisor to compare the choices . “It’s important to understand the aspects in each one and how the money will be paid out during the duration of the trust, as well as what happens when the trust has reached its limit,” Martin says.

Advantages of Charitable Trusts

If you are passionate about a cause, leaving a charitable trust can be a way to make an impact. “A charitable trust can allow a grantor to leave behind everything they have acquired, knowing it’s going to a good cause,” Martin says. Your legacy will carry on with the organization and among those who are aware of the trust.

Another benefit of charitable trusts is a lower tax burden for yourself and your beneficiaries. “This is a great advantage if the donor doesn’t want a heavy initial tax impact on their beneficiaries, or if there are multiple assets a grantor wants to be able to pass on to the next generations without that dreaded tax burden,” Martin says. “This can also help reduce the value of your estate, once more easing the tax burden to your loved ones,” Martin says.

If you’re concerned about a sale that will trigger high taxes, a charitable trust may help. “Oftentimes a large capital gain , let’s say a gain of $250,000 or more, is enough of a taxable gain that can cause many investors to take pause before selling the asset,” says Barry Spencer, co-creator of Wealth With No Regrets in Alpharetta, Georgia. “Common high gain assets include real estate, individual stock or closely held businesses, to name a few.” By setting up a trust, you can move the high gain asset into the charitable trust. The move makes the trust the owner of the asset. “Once the high gain asset is inside the trust, the investor can sell the asset, avoiding the capital gain at the time of the sale,” Spencer says.

Disadvantages of Charitable Trusts

There are fees connected to establishing and managing a trust. In addition, trusts tend to be irrevocable, meaning if your financial situation changes, it could be hard to access funds. “Once the trust is established, it cannot very easily be changed,” Spencer says. It’s also possible that family members or other heirs may not agree with your decision to donate your assets to a given cause, which can create family tension.

How Much Do You Need for a Charitable Trust?

You’ll want to make sure the benefits associated with the charitable trust outweigh the management costs involved. Also, evaluate your situation to determine if you have funds to spare. “This money should be considered ‘surplus,’ and not ‘essential’ money for living,” Spencer says. You’ll want to have debts paid off and be certain that if your financial situation fluctuates in the coming years, you won’t need to access the assets in the trust.

The exact amount to put in a trust will vary based on your circumstances and personal preferences. Talking to an advisor and looking at your overall financial plan may be the best starting point to decide if a charitable trust is right for you, your loved ones and the charity of your choice.

How to Max Out Your 401(k) in 2023

Tags: retirement , money , estate taxes , taxes

The Best Financial Tools for You

Credit Cards

Find the Best Loan for You

Comparative assessments and other editorial opinions are those of U.S. News and have not been previously reviewed, approved or endorsed by any other entities, such as banks, credit card issuers or travel companies. The content on this page is accurate as of the posting date; however, some of our partner offers may have expired.

Subscribe to our daily newsletter to get investing advice, rankings and stock market news.

See a newsletter example .

You May Also Like

Bill would repeal social security taxes.

Maryalene LaPonsie April 24, 2024

How to Take a 401(k) Loan

Rachel Hartman April 24, 2024

Affordable Retirement in Europe

Erica Sandberg April 23, 2024

12 Ways to Achieve a Happy Retirement

Jessica Walrack and Rachel Hartman April 23, 2024

Average Retirement Savings by Age

Maryalene LaPonsie April 22, 2024

Protecting Your Pension From Bankruptcy

Rachel Hartman April 19, 2024

How to Pick a 401(k) Beneficiary

Brian O'Connell April 18, 2024

Roth vs. Traditional IRA

Rachel Hartman and Maryalene LaPonsie April 16, 2024

Where Candidates Stand on Retirement

Maryalene LaPonsie April 15, 2024

Ask a CFP: Consider a Retirement Advisor

Brandon Renfro April 15, 2024

Self-Employed Retirement Planning

Kate Stalter April 12, 2024

Saving for Retirement After 50

Kate Stalter April 11, 2024

How to Buy Property Overseas

Kathleen Peddicord and Rachel Hartman April 10, 2024

How to Invest When Abroad

Brian O'Connell April 9, 2024

Is AARP Membership Right for You?

Rachel Hartman April 8, 2024

How to Create a Retirement Budget

Rachel Hartman April 4, 2024

What Expats Need to Know About Taxes

Maryalene LaPonsie April 2, 2024

Average Retirement Ages Around the World

Rachel Hartman April 1, 2024

10 Best U.S. Beach Towns for Retirees

Jessica Walrack , Emily Brandon and Emily Sherman March 29, 2024

Full Retirement Age for Social Security

Emily Brandon , Rachel Hartman and Maryalene LaPonsie March 29, 2024

Essay on Charitable Trusts

Students are often asked to write an essay on Charitable Trusts in their schools and colleges. And if you’re also looking for the same, we have created 100-word, 250-word, and 500-word essays on the topic.

Let’s take a look…

100 Words Essay on Charitable Trusts

What are charitable trusts.

Charitable trusts are like special boxes where people put money or property for good causes. This money helps others, like giving food to the hungry, education to children, or saving animals. People who give to these trusts don’t aim to make money, but to help society.

How Charitable Trusts Work

These trusts are managed by trustees, who are like captains of a ship. They must use the money wisely and only for charity. The law watches over them to make sure they do the right thing. If they don’t, they can get in trouble.

Benefits of Giving to Charitable Trusts

When you give to a charitable trust, you help make the world better. Plus, sometimes the government says thank you by reducing your taxes. This is because they think helping others is a very good thing to do.

250 Words Essay on Charitable Trusts

Charitable trusts are like special money boxes. People put their money or property into these boxes, not to keep for themselves, but to help others. The person who creates this trust wants to do good things, like support education, help the poor, or take care of sick people. Once the money is in the trust, it must be used only for these good causes.

Who Takes Care of These Trusts?

There is a person or a group of people called trustees who look after the trust. They make sure the money is used correctly. It’s like they are the guardians of the money box, and they must follow the rules set by the person who created the trust. They cannot use the money for themselves; it must always go to the good causes.

What Good Do They Do?

Charitable trusts can do a lot of good things. They can give money to schools so children can learn, to hospitals so people can get better, or to shelters so those without homes can have a place to stay. Sometimes, they support artists or take care of old buildings. The main point is they are always helping and making things better for people and communities.

Can Anyone Start a Charitable Trust?

Yes, if you have money or property and want to help others, you can start a charitable trust. You will need to decide what good things you want to support and set up rules for how the money should be used. Then you find trustworthy people to be the trustees. With the right setup, your charitable trust can keep doing good for a very long time, even after you are gone.

Charitable trusts show us that when we share what we have, we can make the world a kinder place for everyone.

500 Words Essay on Charitable Trusts

Charitable trusts are like special boxes where people put money or property that they want to use for good causes. Think of it like a piggy bank, but instead of saving money for yourself, you’re saving it to help others. These trusts are set up by kind-hearted people who want to make a difference in the world. The money in these trusts supports things like schools, hospitals, and programs that feed the hungry or protect the environment.

Who Takes Care of Charitable Trusts?

There are people called trustees who look after these trusts. They are like the captains of a ship, steering the trust in the right direction. Their job is to make sure the money is used properly, following what the person who set up the trust wanted. They can’t use the money for themselves; it has to go to the good causes the trust was made for.

Why Do People Set Up Charitable Trusts?

People set up charitable trusts for many reasons. Some want to give back to their community or support a cause that’s close to their hearts. Others might want to honor someone they love or keep doing good things even after they’re gone. It’s a way for them to leave a mark on the world by helping others.

How Do Charitable Trusts Work?

When someone starts a charitable trust, they decide what good causes it should support. This could be anything from helping animals to making sure kids can read and write. They also decide who will be in charge of the trust. After that, the trust can get money not only from the person who started it but also from other people who want to help.

Charitable trusts do a lot of good in the world. They can pay for things like medicine for people who are sick, books for students, or clean water for communities that need it. Trusts can also help after disasters, like floods or earthquakes, by giving money to rebuild houses and schools.

Yes, pretty much anyone can start a charitable trust if they have something to give and want to help others. It doesn’t matter if you’re not rich. Even a small trust can make a big difference if it’s used wisely.

The Future of Charitable Trusts

Charitable trusts will likely be around for a long time because there will always be people who need help and others who want to give it. As long as there are kind people setting up these trusts and careful trustees looking after them, they will continue to do a lot of good in the world.

In summary, charitable trusts are a powerful way for people to help others. They are managed by trustees who make sure the money is used for good causes. Anyone can start a trust, and the good they do can last for many years, making the world a better place for everyone.

That’s it! I hope the essay helped you.

If you’re looking for more, here are essays on other interesting topics:

• Essay on Challenging Behaviour
• Essay on Change Is Always For The Better
• Essay on Changing Food Habits

Apart from these, you can look at all the essays by clicking here .

Happy studying!

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.

Law Explorer

Fastest law search engine.

If you have any question you can ask below or enter what you are looking for!

• Law Explorer /
• CONSTITUTIONAL LAW /

Charitable Trusts

12 Charitable trusts

AIMS AND OBJECTIVES By the end of this chapter you should be able to: ■ appreciate the privileges enjoyed by charitable trusts ■ define a charity within the new Charities Act 2011 ■ recognise a charitable purpose within the Charities Act 2011 ■ understand the cy-près doctrine 12.1 Introduction A charitable trust is a type of purpose trust in that it promotes a purpose and does not primarily benefit specific individuals. However, in furthering a purpose the performance of the trust may result in individuals or members of the public deriving direct benefits. Even so, the trust remains one for a purpose and not for the benefit of those individuals. The purpose of the trust is to benefit society as a whole or a sufficiently large section of the community so that it may be considered public. Thus, a charitable trust is a public purpose trust and is enforceable by the Attorney General on behalf of the Crown. Private trusts, on the other hand, seek to benefit defined persons or narrower sections of society than charitable trusts and, as we saw, a private purpose trust is void for lack of a person to enforce the trust. Generally, charitable trusts are subject to the same rules as private trusts but, as a result of the public nature of such bodies, they enjoy a number of advantages over private trusts in respect of: (a) certainty of objects; (b) the perpetuity rule; (c) the cy-près rule; and (d) fiscal privileges. perpetuity Endless years. There is a rule against perpetuities which, if infringed, will make a gift void. cy-près Nearest alternative gift. The Charities Act 2006 introduced five main statutory modifications to the law of charities. These are: 1. the restatement of charitable purposes in a modern statutory form; 2. the public benefit obligation; 3. changes in the function of the Charity Commission; 4. the establishment of a Charity Tribunal; 5. the improvement of the range of legal entities that are available to charities. The principles that were enacted in the 2006 Act have since been repealed and replaced by equivalent provisions in the Charities Act 2011. This Act was brought into force on 14 March 2012. The Charities Act 2011 is divided into 19 Parts, contains 358 sections and 11 Schedules. Section 1(1) of the Charities Act 2011 adopts a two-tier definition of a charity. It is an institution which: (a) is established for charitable purposes only; and (b) falls to be subject to the control of the High Court in the exercise of its jurisdiction with respect to charities. The definition in s 1(1)(a) of the 2011 Act is related to the test for certainty of charitable objects (see below). In addition, the institution is required to be subject to the control of the High Court. This is the jurisdictional aspect of the definition. A number of British registered charities carry on their activities abroad. There is little judicial authority on the attitude of the courts to such overseas activities. In 1963, the Charity Commissioners issued guidelines on the way they would approach this problem. Their view is that activities of trusts within the first three heads of Lord Macnaghten’s classification (trusts for the relief of poverty, for the advancement of education and for religion) are charitable wherever such operations are conducted. In respect of the fourth head, such purposes would be charitable only if carried on for the benefit (direct or reasonably direct) of the UK community, such as medical research. The Commissioners added that it may be easier to establish this benefit in relation to the Commonwealth (although this link has become weaker since the statement was made). The limited number of authorities in this field seem to make no distinction between activities conducted abroad as opposed to UK activities. CASE EXAMPLE Keren Kayemeth Le Jisroel Ltd v IRC [1932] AC 650 A company was formed with the main object of purchasing land in Palestine, Syria and parts of Turkey for the purpose of settling Jews in such lands. It was argued that the company was established for charitable purposes, namely the advancement of religion, the relief of poverty and other purposes beneficial to the community. The court held that the company was not charitable, because of the lack of evidence of religion and poverty. In addition, the company was not charitable under the fourth head because of the uncertainty of identifying the community. In Re Jacobs (1970) 114 SJ 515, a trust for the planting of a clump of trees in Israel was held to be charitable because soil conservation in arid parts of Israel is of essential importance to the Israeli community. The court relied on IRC v Yorkshire Agricultural Society [1928] 1 KB 611: the promotion of agriculture is a charitable purpose. However, if the organisation is not registered in the United Kingdom but abroad, and carries on its activities substantially abroad, the connection with the UK could be so insignificant that the English courts may reject jurisdiction. The justification for this rule is that the activities of the charity as well as the trustees will be outside the court’s control. In Gaudiya Mission v Brahmachary (1997), the Court of Appeal refused jurisdiction on the ground that the statutory and practical controls could not have been extended to such institutions. CASE EXAMPLE Gaudiya Mission v Brahmachary [1997] 4 All ER 957, CA The claimant, an Indian charity (the Mission), maintained preaching centres and temples in order to advance the doctrines of the Vaishnava faith throughout India and also Cricklewood, northwest London. The Mission was not registered in England. Rival factions within the Mission set up a trust under the name ‘Gaudiya Mission Society Trust’ (the Society), which was a registered English charity. The defendants were the priest in charge of the charity’s London temple and the trustees of the English registered Society. The claimant contended that the assets held by the Society belonged to it and that the Society was passing itself off as the Mission. The question in issue was whether the Mission was an institution established for charitable purposes, and thereby subject to the control of the High Court under its supervisory jurisdiction. The judge decided that the Mission was within the control of the High Court and, consequently, that the Attorney General ought to be added as a party to the proceedings. The Attorney General appealed to the Court of Appeal. Held: The Court of Appeal allowed the appeal on the ground that the English law of charities was not applicable to institutions other than those established for charitable purposes in England and Wales. Charitable institutions within England and Wales are required to register with the Charity Commission. The legal and practical considerations of enforceability are decisive factors, which indicate that the law was never intended to extend to an institution registered abroad. Thus, the Mission was not a charity within English law and the Attorney General was not a proper party to be joined. JUDGMENT ‘Under English law charity has always received special treatment. It often takes the form of a trust; but it is a public trust for the promotion of purposes beneficial to the community, not a trust for private individuals. It is therefore subject to special rules governing registration, administration, taxation and duration. Although not a state institution, a charity is subject to the constitutional protection of the Crown as parens patriae , acting through the Attorney-General, to the state supervision of the Charity Commissioners and to the judicial supervision of the High Court. This regime applies whether the charity takes the form of a trust or of an incorporated body. The English courts have never sought to subject to this regime institutions or undertakings established for public purposes under other legal systems. [The authorities] show that the courts of this country accept that they do not have the means of controlling an institution established in another country, and administered by trustees there.’ Mummery LJ 12.2 Certainty of objects In s1(1)(a) of the Charities Act 2011, the expression, ‘charity’ has been partially defined by reference to the exclusivity of charitable purposes promoted by the institution. This is a reference to the test for certainty of the charitable objects and amounts to a statutory recognition of the common law approach that preceded the passing of the Act. At common law a charitable trust is subject to a unique test for certainty of objects, namely whether the funds of the institution are applicable for charitable purposes. In other words, if the trust funds may be used solely for charitable purposes, the test will be satisfied. Indeed, it is unnecessary for the settlor or testator to specify the charitable objects which are intended to take the trust property: provided that the trust instrument manifests a clear intention to devote the funds for ‘charitable purposes’, the test will be satisfied. Thus, a gift ‘on trust for charitable purposes’ will satisfy this test. The Charity Commission and the courts have jurisdiction to establish a scheme for the application of the funds for charitable purposes (i.e. the court will make an order indicating the specific charitable objects which will benefit). But if the trust funds are capable of being applied in a substantial manner to promote charitable and non-charitable purposes the trust will fail to satisfy the test for certainty of charitable objects and a resulting trust may arise in favour of the settlor or his estate, if he is dead. In Morice v Bishop of Durham , the gift failed as a charity on this ground. CASE EXAMPLE Morice v Bishop of Durham [1804] 9 Ves 399 A fund was given upon trust for such objects of benevolence and liberality as the Bishop of Durham should approve. The question in issue was whether the fund was charitable. Held: The gift was not valid as a charity because the objects were not exclusively charitable. A resulting trust was created. JUDGMENT ‘[I]t is now settled, upon authority, which it is too late to controvert, that, where a charitable purpose is expressed, however general, the bequest shall not fail on account of the uncertainty of the object: but the particular mode of application will be directed by the King in some cases, in others by this court. I am not aware of any case, in which the bequest has been held to be charitable, where the testator has not either used that word, to denote his general purpose or specified some particular purpose, which this court has determined to be charitable in its nature.’ Grant MR In Moggridge v Thackwell (1807) 13 Ves 416, a bequest to ‘such charities as the trustee sees fit’ was valid as a gift for charitable purposes. The court approved a scheme for the disposition of the residuary estate. On the other hand, where the settlor in the trust instrument identifies two sets of purposes, one set of charitable objects and another set of non-charitable objects, the court will construe the objects to determine the scope of the disposition. If the trust funds are capable of being devoted to both charitable and non-charitable purposes the gift will be invalid as a charity for uncertainty of objects. CASE EXAMPLE IRC v City of Glasgow Police Athletic Association [1953] 1 All ER 747 The association promoted both a charitable purpose (efficiency of the police force) and a non-charitable purpose (promotion of sport). The court decided that the association was not charitable. JUDGMENT ‘The private advantage of members is a purpose for which the association is established and it therefore cannot be said that this is an association established for a public charitable purpose only. In principle, therefore, if an association has two purposes, one charitable and the other not, and if the two purposes are such and so related that the non-charitable purpose cannot be regarded as incidental to the other, the association is not a body established for charitable purpose only.’ Lord Normand The courts have created a distinction between on the one hand, the broad notion of a trust for benevolent purposes and on the other hand, a charitable trust for the benefit of the community. On construction, the court may decide that benevolent purposes involve objectives that are much wider than charitable purposes and accordingly the gift may fail as a charity. Thus, where the draftsman of the objects clause uses words such as ‘charitable or benevolent purposes’, the court may, on construction of the clause, decide that the word ‘or’ ought to be interpreted disjunctively, with the effect that benevolent purposes which are not charitable are capable of taking, thereby invalidating the charitable gift. In Chichester Diocesan Fund v Simpson (1944), the gift failed as a charity on construction of the objects clause. CASE EXAMPLE Chichester Diocesan Fund v Simpson [1944] 2 All ER 60, HL A testator directed his executors to apply the residue of his estate ‘for such charitable or benevolent objects’ as they might select. The executors assumed that the clause created a valid charitable gift and distributed most of the funds to charitable bodies. The House of Lords decided that the clause did not create charitable gifts and therefore the gifts were void. A resulting trust was set up for the testator’s estate. JUDGMENT ‘It is not disputed that the words charitable and benevolent do not ordinarily mean the same thing; they overlap in the sense that each of them, as a matter of legal interpretation, covers some common ground, but also something which is not covered by the other. It appears to me that it inevitably follows that the phrase charitable or benevolent occurring in a will must, in its ordinary context, be regarded as too vague to give the certainty necessary before such a provision can be supported or enforced. The conjunction or may be sometimes used to join two words whose meaning is the same, but, as the conjunction appears in this will, it seems to me to indicate a variation rather than an identity between the coupled conceptions. I regret that we have to arrive at such a conclusion, but we have no right to set at nought an established principle such as this in the construction of wills, and I, therefore, move the House to dismiss the appeal.’ Viscount Simon LC Prima facie , the conjunction, ‘and’ is construed conjunctively but may exceptionally be construed disjunctively in a way similar to the word ‘or’. The construction of the expression will depend ultimately in the context in which the words were used in the trust instrument or will. In Re Best [1904] 2 Ch 354, a testator transferred property by his will for ‘such charitable and benevolent institutions in the city of Birmingham as the Lord Mayor should choose’. The court decided, on construction, that the will created a valid charitable trust. JUDGMENT ‘I think the testator here intended that the institutions should be both charitable and benevolent; and I see no reason for reading the conjunction and as or.’ Farwell J But in A-G of the Bahamas v Royal Trust Co [1986] IWLR 1001, a bequest to provide education ‘and’ welfare for Bahamian children failed as a charitable bequest. The expression ‘welfare’ was a word of wide import and, taken in the context of the expression ‘education and welfare’, was not restricted to the educational prosperity of the objects. The gift was therefore void for charitable purposes. JUDGMENT ‘[I]t is not easy to imagine a purpose connected with the education of a child which is not also a purpose for the child’s welfare. Thus, if welfare is to be given any separate meaning at all it must be something different from and wider than mere education, for otherwise the word becomes otiose … the phrase education and welfare in this will inevitably fall to be construed disjunctively. It follows that, for the reasons which were fully explored in the judgments in the courts below, and as is now conceded on the footing of a disjunctive construction, the trusts in paragraph (t) do not constitute valid charitable trusts.’ Lord Oliver In Helena Partnerships Ltd v Revenue and Customs [2012] EWCA Civ 569, the Court of Appeal decided that a registered company formed to provide housing for persons other than those in need was not a charitable organisation and that corporation tax was payable on its profits. JUDGMENT ‘I conclude that the provision of housing without regard to a relevant charitable need is not in itself charitable.’ Lloyd LJ In two circumstances, an objects clause which seeks to benefit both charitable and non-charitable purposes will not fail as a charity if: (i) The non-charitable purpose is construed as being incidental to the main charitable purpose. This involves a question of construction for the courts to evaluate the importance of each class of objects. In Re Coxen [1948] Ch 747, a bequest of 200,000 provided for the income to be paid to orthopaedic hospitals, subject to 100 per annum for dinners for trustees when they met on trust business. The issue was whether the objects were charitable. The court decided that, on construction of the relevant clause, a valid charitable gift was created. The provision for the trustees’ dinners was purely incidental to the main charitable purpose of benefiting orthopaedic hospitals. (ii) The court is able to apportion the fund and devote the charitable portion of the fund for charitable purposes. An apportionment will be ordered where part only of the fund is payable for charitable purposes and the other part for non-charitable purposes. In the absence of circumstances requiring a different division, the court will apply the maxim ‘Equality is equity’ and order an equal division of the fund. In Salusbury v Denton (1857) 3 K & J 529, severance was permitted where an unspecified part of a fund was made for charitable purposes (the relief of poverty) and the remainder for a private purpose (the testator’s relatives). JUDGMENT ‘It is one thing to direct a trustee to give a part of a fund to one set of objects, and the remainder to another, and it is a distinct thing to direct him to give either to one set of objects or to another … This is a case of the former description. Here the trustee was bound to give a part to each.’ Page Wood VC 12.3 Perpetuity Charities are not subject to the rule against excessive duration. Indeed, many charities (schools and universities) continue indefinitely and rely heavily on donations. But charitable gifts, like private gifts, are subject to the rule against remote vesting, i.e. the subject-matter of the gift is required to vest in the charity within the perpetuity period. But even in this respect the courts have introduced a concession for charities, namely charitable unity. Once a gift has vested in a specific charity, then, subject to any express declarations to the contrary, it vests forever for charitable purposes. Accordingly, a gift which vests in one charity (A) with a gift over in favour of another charity (B) on the occurrence of an event will be valid even if the event occurs outside the perpetuity period. This concessionary rule does not apply to a gift over to a charity after a gift in favour of a non-charity. The normal rules as to vesting apply. Similarly, a gift over from a charity to a non-charity is caught by the rules as to remote vesting. 12.4 The cy-près doctrine The advantage over private trusts is that when a gift vests in a charity then, subject to express provisions to the contrary, the gift vests for charitable purposes. Accordingly, the settlor (and his estate) is excluded from any implied reversionary interests by way of a resulting trust in the event of a failure of the charitable trust. Thus, the cy-près doctrine is an alternative to the resulting trust principle. This principle will be dealt with in more detail later in this chapter. 12.5 Fiscal advantages A variety of tax reliefs are enjoyed both by charitable bodies and by members of the public (including companies) who donate funds for charitable purposes. A detailed analysis of such concessions is outside the scope of this book. 12.6 Registration Section 30 of the Charities Act 2011 lays down the requirement that all charitable bodies must be registered with the Charity Commission, subject to exemptions, exceptions and small charities. Section 29 of the Charities Act 2011 deals with the register of charities, including its contents, which the Charity Commission will continue to maintain. Section 34 of the 2011 Act deals with the circumstances when the Commission may remove charities or institutions that are no longer considered to be charities. The effect of registration is governed by s 37 of the 2011 Act. This provision declares that, except for the purposes of rectification, the organisation ‘shall be conclusively presumed to be or to have been a charity’ while it remains on the register. 12.7 Status of charitable organisations Charitable bodies may exist in a variety of forms. The choice of charitable medium is determined by the founders of the charity. Express trusts An individual may promote a charitable purpose by donating funds inter vivos or by will to trustees on trust to fulfil a charitable objective. The purpose need not be specified by the donor, for the test here is whether all the purposes are charitable; for example, a trust will be charitable if the donor disposes of property on trust for ‘charitable and benevolent purposes’. It may be necessary for the trustees to draw up a scheme with the Charity Commission or with the approval of the court in order to identify the specific charitable purposes which will benefit. It was pointed out earlier that charitable trusts are exempt from the test for certainty of objects applicable to private trusts. Alternatively, the donor may identify the charitable objectives which he or she had in mind and, if these objectives are contested, the courts will decide whether the purposes are indeed charitable. Corporations A great deal of charitable activity is conducted through corporations. Such bodies may be incorporated by royal charter, such as the ‘old’ universities, or by special statute under which many public institutions, such as hospitals and ‘new’ universities, have been created. In addition, many charitable bodies have been created under the Companies Act 2006, usually as private companies limited by guarantee. In these circumstances, there is no need for separate trustees; since the corporations are independent persons, the property may vest directly in such bodies. Charitable incorporated organisations Part 11 (ss 204–250) of the Charities Act 2011 introduces provisions creating a new legal form known as a ‘charitable incorporated organisation’ (CIO). The CIO is the first legal form to be created specifically to meet the needs of charities. A CIO is a body corporate with a constitution with at least one member. The purpose of a CIO is to avoid the need for charities that wish to benefit from incorporation to register as companies and be liable to comply with regulations from Companies House and the Charity Commission. Any one or more persons may apply to the Charity Commission for a CIO to be registered as a charity. The effect of registration is that all the property of the applicant’s organisation shall become vested in the CIO. The Minister may make provisions for the winding up, insolvency, dissolution and revival of CIOs. The regulations may provide for the transfer of the property and rights of a CIO to the official custodian or another person or body or cy-près. Unincorporated associations A group of persons may join together in order to promote a charitable purpose. Such an association, unlike a corporation, has no separate existence. The funds are usually held by a committee in order to benefit the charitable purpose. In the absence of such a committee, the funds may be vested in the members of the association on trust for the charitable activity. 12.8 Charitable purposes Pre-Charities Act 2011 The purpose of this section is to introduce the reader to the approach of the courts over four centuries in clarifying the law as to charitable purposes. Most of the case law is still relevant today in deciding whether a purpose is charitable or not. Prior to the passing of the Charities Act 2011 (consolidating the provisions laid down in the Charities Act 2006), there was no statutory or judicial definition of charitable purposes. It was at one time believed that a statutory definition of charitable purposes would have created the undesirable effect of restricting the flexibility which existed in allowing the law to keep abreast with the changing needs of society. Ever since the passing of the Charitable Uses Act 1601 (sometimes referred to as the Statute of Elizabeth I), the courts developed the practice of referring to the preamble for guidance as to charitable purposes. The preamble contained a catalogue of purposes which at that time were regarded as charitable. It was not intended to constitute a definition of charities. The purposes included in the preamble to the 1601 Act are: SECTION Preamble to the Statute of Elizabeth I ‘The relief of aged, impotent and poor people; the maintenance of sick and maimed soldiers and mariners, schools of learning, free schools and scholars of universities; the repair of bridges, ports, havens, causeways, churches, sea banks and highways; the education and preferment of orphans; the relief, stock or maintenance of houses of correction; the marriages of poor maids; the supportation, aid and help of young tradesmen, handicapped men and persons decayed; the relief or redemption of prisoners or captives; and the aid or care of any poor inhabitants concerning the payments of fifteens, setting out of soldiers and other taxes.’ Admittedly, the above-mentioned purposes were of limited effect, but Lord Macnaghten in IRC v Pemsel [1891] AC 531 classified charitable purposes within four categories, thus: JUDGMENT ‘charity in its legal sense comprises four principal divisions: ■ trusts for relief of poverty; ■ trusts for the advancement of education; ■ trusts for the advancement of religion; ■ trusts for other purposes beneficial to the community.’ The approach of the courts treated the examples stated in the preamble as a means of guidance in deciding on the validity of the relevant purpose. Two approaches have been adopted by the courts, namely: ■ Reasoning by analogy : the approach here is to ascertain whether a purpose has some resemblance to an example as stated in the preamble or to an earlier decided case which was considered charitable, for example the provision of a crematorium was considered charitable by analogy with the repair of churches as stated in the preamble in the following case: JUDGMENT ‘What must be regarded is not the wording of the preamble, but the effect of decisions given by the Courts as to its scope, decisions which have endeavoured to keep the law as to charities moving according as new social needs arise or old ones become obsolete or satisfied.’ Lord Wilberforce in Scottish Burial Reform and Cremation Society v City of Glasgow Corporation [1968] AC 138 ■ The spirit and intendment of the preamble: this approach is much wider than the previous approach. The courts decide whether the purpose of the organisation is ‘within the spirit and intendment’ or ‘within the equity’ of the statute, unhindered by the specific purposes as stated in the preamble. In other words, the examples enumerated in the preamble are treated as the context or ‘flavour’ against which the purpose under scrutiny may be determined. In this respect it has been suggested that purposes beneficial to the community are prima facie charitable, unless they could not have been intended by the draftsman of the Statute of Elizabeth I, assuming that he was aware of the changes in society. JUDGMENT ‘[I]f a purpose is shown to be so beneficial or of such utility it is prima facie charitable in law, but the courts have left open a line of retreat based on the equity of the statute in case they are faced with a purpose (e.g. a political purpose) which could not have been within the contemplation of the statute even if the then legislators had been endowed with the gift of foresight into the circumstances of later centuries.’ Russell LJ in Incorporated Council of Law Reporting v A-G [1972] Ch 73 CASE EXAMPLE Incorporated Council of Law Reporting v A-G [1972] Ch 73 The court decided that the Incorporated Council of Law Reporting was a charitable body, on the grounds that it advanced education and other purposes beneficial to society. The fact that the reports may be used by members of the legal profession for their ‘personal gain’ was incidental to the main charitable purposes. JUDGMENT ‘In a case such as the present in which the object cannot be thought otherwise than beneficial to the community and of general public utility, I believe the proper question to ask is whether there are any grounds for holding it to be outside the equity of the statute; and I think the answer to that is here in the negative.’ Russell LJ A second requirement for a trust to gain charitable status is that the entity exists for the public benefit, i.e. that it confers some tangible benefit to the public at large or a sufficiently wide section of the community. This feature distinguishes a charitable trust (public trust) from a private trust. In practice, the conferment of some tangible benefit was presumed to exist when the trust purpose fell within the first three categories of the Pemsel classification. With regard to the fourth category laid down in Pemsel the trustees were required to prove the existence of a benefit. The Charities Act 2011 has changed this practice. From this brief outline of the pre-2011 law of charities three conclusions may be drawn: ■ There was no statutory definition of a charity. ■ A formidable body of case law on charitable purposes was built up over the centuries. This wealth of case law is still relevant in deciding charitable purposes today. ■ It was perceived that a presumption existed in favour of public benefit concerning the first three heads of Lord Macnaghten’s classification in Pemsel. 12.9 Public benefit or element Section 2(1) of the Charities Act 2011 defines a ‘charitable purpose’ as a purpose that: (a) falls within s 3(1) of the Act (see later); and (b) also satisfies the definition of ‘public benefit’ as laid down in s 4 of the Act. The effect is that a two-tier definition of charitable purposes has been adopted by the Act. We will first examine the concept of public benefit before embarking on a discussion of the 13 specific charitable purposes. It must not be assumed that all public trusts will be treated as charitable: Chichester Diocesan Fund v Simpson [1944] AC 341 (see earlier) where a gift for ‘charitable or benevolent purposes’ failed as a charity because benevolent purposes, which were not charitable, were capable of deriving substantial benefits. In order to qualify for charitable status the entity is required to promote a benefit to society within one or more of the purposes enacted within s 3 of the Charities Act 2011 (the benefit aspect) and the beneficiaries who are capable of enjoying the facility comprises the public or an appreciable section of the society (the public aspect), i.e. the public benefit test. In Verge v Sommerville [1924] AC 650, Lord Wrenbury commented on the public benefit requirement in the following manner: JUDGMENT ‘To ascertain whether a gift constitutes a valid charitable trust so as to escape being void on the ground of perpetuity, a first inquiry must be whether it is public – whether it is for the benefit of the community or of an appreciably important class of the community. The inhabitants of a parish or town, or any particular class of such inhabitants, may for instance, be the objects of such a gift, but private individuals, or a fluctuating body of private individuals, cannot.’ 12.9.1 Public benefit The ‘public benefit’ test is used as a means of distinguishing a public trust from a private trust. A public or charitable trust is required to exist for the benefit of the public (the community) or an appreciable section of society, with the exception of trusts for the relief of poverty. Section 4(3) of the 2011 Act consolidates the case law interpretation of the public benefit test that existed before the introduction of the Charities Act. Thus, the wealth of case law that existed over four centuries may still be relevant. Section 4(3) declares that ‘any reference to the public benefit is a reference to the public benefit as that term is understood for the purposes of the law relating to charities in England and Wales’. This test incorporates two limbs. The first requirement involves the usefulness of the activity to society (‘the benefit or merit aspect’). Prior to the Charities Act 2011 a practical approach was adopted that prima facie assumed that public benefit to the community existed if the purpose was within the first three heads of the Pemsel classification (trusts for the relief of poverty and advancement of education and religion). This prima facie approach was assumed (incorrectly) to create a presumption which had, in any event, been abolished by s 4(2) of the Charities Act 2011. The effect is that all charitable purposes are put on an equal footing with the trustees being required to prove that the activity satisfies the test of usefulness to society within one or more of the stated purposes listed in the statute. In Independent Schools Council v Charity Commission [2011] UHUT 421, in judicial review proceedings, the Upper Tribunal decided that on a review of the cases there was no evidence that the courts had adopted a legal presumption with regard to public benefit. Instead, the approach of the courts, on a practical level, was to have regard to the purpose of the organisation in order to determine whether there was a correlation between the alleged charitable purpose and the public benefit aspect. The public benefit test would be satisfied if there was no cause for concern. But if there was any credible argument that this was not the case the court would require evidence to establish the public benefit test. JUDGMENT ‘[The judge] would start with a predisposition that an educational gift was for the benefit of the community; but he would look at the terms of the trust critically and if it appeared to him that the trust might not have the requisite element, his predisposition would be displaced so that evidence would be needed to establish public benefit. But if there was nothing to cause the judge to doubt his predisposition, he would be satisfied that the public element was present. This would not, however, be because of a presumption as that word is ordinarily understood; rather, it would be because the terms of the trust would speak for themselves, enabling the judge to conclude, as a matter of fact, that the purpose was for the public benefit.’ Warren J In deciding whether the ‘benefit aspect’ is satisfied, the approach of the courts is to weigh up the benefits to society as against the adverse consequences to the public and determine whether the net balance of benefits is in favour of the public. In Independent Schools Council v Charity Commission (2011), Warren J expressed the point in the following manner: JUDGMENT ‘The court … has to balance the benefit and disadvantage in all cases where detriment is alleged and is supported by evidence. But great weight is to be given to a purpose which would, ordinarily, be charitable; before the alleged disadvantages can be given much weight, they need to be clearly demonstated.’ This principle may be illustrated by the House of Lords decision in National Anti-vivisection Society v IRC [1948] AC 31. The court decided that a society whose main object was the abolition of vivisection was not charitable for its purpose was detrimental to medical science and was political in the sense that it involved a change in the law. JUDGMENT ‘There is not, so far as I can see, any difficulty in weighing the relative value of what it called the material benefits of vivisection against the moral benefit which is alleged or assumed as possibly following from the success of the appellant’s project. In any case the position must be judged as a whole. It is arbitrary and unreal to attempt to dissect the problem into what is said to be direct and what is said to be merely consequential. The whole complex of resulting circumstances of whatever kind must be foreseen or imagined in order to estimate whether the change advocated would or would not be beneficial to the community.’ Lord Wright The second requirement concerns the identification of the class of beneficiaries to be regarded as the public (the community) or an appreciable section of society. The satisfaction of the test is a question of law for the judge to decide on the evidence submitted to him. Further, the courts have decided this question in a flexible manner by reference to the description of the purposes of the entity within s 3(1) of the Charities Act 2011. In short, the public benefit test may be approached differently where the trust promotes education, relieves poverty or advances religion. In Gilmour v Coats [1949] AC 426, Lord Simonds expressed the point in the following manner: JUDGMENT ‘It is a trite saying that the law is life, not logic. But it is, I think, conspicuously true of the law of charity that it has been built up not logically but empirically. It would not, therefore, be surprising to find that, while in every category of legal charity some element of public benefit must be present, the court had not adopted the same measure in regard to different categories, but had accepted one standard in regard to those gifts which are alleged to be for the advancement of education and another for those which are alleged to be for the advancement of religion, and it may be yet another in regard to the relief of poverty. To argue by a method of syllogism or analogy from the category of education to that of religion ignores the historical process of the law.’ In IRC v Baddeley [1955] AC 572 (see below), a gift to promote recreation for a group of persons forming a class within a class did not satisfy the public benefit test. Lord Somervell expressed the flexible approach to the public benefit test, thus: I cannot accept the principle submitted by the respondents that a section of the public sufficient to support a valid trust in one category must as a matter of law be sufficient to support a trust in any other category. I think that difficulties are apt to arise if one seeks to consider the class apart from the particular nature of the charitable purpose. They are, in my opinion, interdependent. There might well be a valid trust for the promotion of religion benefiting a very small class. It would not at all follow that a recreation ground for the exclusive use of the same class would be a valid charity. Lord Somervell in IRC v Baddeley [1955] AC 572 In essence, this test will be satisfied if the potential beneficiaries of the trust are not numerically negligible and there is no personal bond or link between the donor and the intended beneficiaries, subject to the exception regarding trusts for the relief of poverty. The policy that underpins the second limb of the public benefit test was laid down by Lord Simonds in IRC v Baddeley [1955] AC 572. The policy distinguishes between gifts that are limited for the benefit of a defined class of individuals on the one hand, and gifts that are available to the community as a whole, but may be enjoyed by those beneficiaries who are willing to avail themselves of the benefit. In this case, a trust in favour of Methodists in West Ham and Leyton failed the public element test because the beneficiaries were composed of a class within a class: JUDGMENT ‘[There is a] distinction between a form of relief accorded to the whole community yet by its very nature advantageous only to a few and a form of relief accorded to a selected few out of a larger number equally willing and able to take advantage of it … for example, a bridge which is available for all the public may undoubtedly be a charity and it is indifferent how many people use it. But confine its use to a selected number of persons, however numerous and important; it is then clearly not a charity. It is not of general public utility; for it does not serve the public purpose which its nature qualifies it to serve.’ Lord Simonds in IRC v Baddeley In the provision of education, the public benefit test will not be satisfied if there is a personal nexus between the donor and the beneficiaries or between the beneficiaries themselves. The personal nexus may take the form of a ‘blood’ relationship. In Re Compton [1945] 1 All ER 198, the Court of Appeal decided that the test was not satisfied where the gift was on trust for the education of the children of three named relatives: JUDGMENT ‘I come to the conclusion, therefore, that on principle a gift under which the beneficiaries are defined by reference to a purely personal relationship to a named propositus cannot on principle be a valid charitable gift. And this, I think, must be the case whether the relationship be near or distant, whether it is limited to one generation or is extended to two or three or in perpetuity.’ Lord Greene MR This test was approved and extended to a personal nexus by way of contract in Oppenheim v Tobacco Securities Trust Co Ltd [1951] AC 297, HL. CASE EXAMPLE Oppenheim v Tobacco Securities Trust Co Ltd [1951] AC 297, HL Trustees were directed to apply moneys in providing for the education of employees or ex-employees of British American Tobacco or any of its subsidiary companies. The employees numbered 110,000. The court held that in view of the personal nexus between the employees themselves (being employed by the same employer), the public element test was not satisfied. JUDGMENT ‘[The] words section of the community have no special sanctity, but they conveniently indicate first, that the possible (I emphasise the word possible) beneficiaries must not be numerically negligible, and secondly, that the quality which distinguishes them from other members of the community, so that they form by themselves a section of it, must be a quality which does not depend on their relationship to a particular individual.’ Lord Simonds Lord MacDermott dissented and expressed the view that although the ‘common link’ test was of some value, it ought not to be an overriding consideration, as the majority believed: JUDGMENT ‘If the bond between those employed by a particular railway is purely personal, why should the bond between those who are employed as railwaymen be essentially different? … Are miners in the service of the National Coal Board now in one category and miners in a particular pit or of a particular district in another? Is the relationship between those in the service of the Crown to be distinguished from that obtaining between those of some other employer?’ More recently, in Dingle v Turner [1972] AC 601, Lord Cross of Chelsea gave his support to this view. There is some support for the view, albeit weak, that if the donor sets up a trust for the benefit of the public or a large section of the public, but expresses a preference (not amounting to an obligation) in favour of specified individuals, the gift is capable of satisfying the public element test. CASE EXAMPLE Re Koettgen’s Will Trust [1954] Ch 252 A trust was created for the promotion and furtherance of the commercial education of British-born subjects, subject to a direction that preference be given to the employees of a company. The court decided that, on construction, the preference was intended as permitting, without obliging, the trustees to consider distributing the property in favour of the employees. This decision had been criticised by the Privy Council in Caffoor v Commissioners of Income Tax, Colombo [1961] AC 584 as being in essence an ‘employee trust’ and ‘had edged very near to being inconsistent with Oppenheim’s case’. In IRC v Educational-Grants Association Ltd [1967] 3 WLR 341, the Court of Appeal refused to follow Re Koettgen’s Will Trust (1954). CASE EXAMPLE IRC v Educational-Grants Association Ltd [1967] 3 WLR 341 An association was established for the advancement of education by, inter alia , making grants to individuals. Its principal source of income consisted of annual sums paid to it by Metal Box Ltd. About 85 per cent of the association’s income during the relevant years was applied to the children of employees of Metal Box Ltd. The question in issue was whether the association was a charitable body. The Court of Appeal affirmed the decision of Pennycuick J and decided that the application of the high proportion of the income for the benefit of children connected with Metal Box Ltd was inconsistent with an application for charitable purposes. JUDGMENT ‘I find considerable difficulty in the Re Koettgen decision. I should have thought that a trust for the public with reference for a private class comprised in the public might be regarded as a trust for the application of income at the discretion of the trustees between charitable and non-charitable objects.’ Pennycuick J In essence, the public element test will be satisfied if: (i) the beneficiaries are not numerically negligible; and (ii) the beneficiaries have no ‘link’ in contract or in blood between themselves or with a narrow group of individuals. JUDGMENT ‘To constitute a section of the public, the possible beneficiaries must not be numerically negligible and secondly, the quality which distinguishes them from other members of the community so that they form by themselves a section of it must be a quality which does not depend on their relationship to a particular individual … A group of persons may be numerous but, if the nexus between them is their personal relationship to a single proposition or to several propositus they are neither the community nor a section of the community for charitable purposes.’ Lord Simonds in Oppenheim v Tobacco Securities Trust Co (1951) Subject to the absence of a personal nexus between the beneficiaries and/or a limited class of individuals, the issue of whether or not the beneficiaries constitute a section of the public in order to satisfy the public element test is a question of degree. There are many decisions which appear to be inconsistent with each other. In Gilmour v Coats [1949] 1 All ER 848, HL, the court decided that a gift to a community of 20 cloistered nuns who devoted themselves to prayer and contemplation did not satisfy the public element test: JUDGMENT ‘The community [order of nuns] does not engage in – indeed, it is by its rules debarred from – any exterior work, such as teaching, nursing, or tending the poor, which distinguishes the active branches of the same order.’ Lord Simonds On the other hand, in Neville Estates Ltd v Madden [1962] 1 Ch 832, the members of the Catford Synagogue were treated as an appreciable section of the public and satisfied the public element test because they integrated with the rest of society. JUDGMENT ‘The two cases [ Gilmour v Coats and Neville Estates v Madden ], however, differ from one another in that the members of the Catford Synagogue spend their lives in the world, whereas the members of a Carmelite Priory live secluded from the world.’ Cross J In Re Lewis [1954] 3 All ER 257, a gift to ten blind boys and ten blind girls in Tottenham was charitable. But in Williams’ Trustees v IRC [1947] AC 447, HL, a gift in order to create an institute in London for the promotion of Welsh culture failed as a charity: JUDGMENT ‘I doubt whether the public benefit test could be satisfied if the beneficiaries are a class of persons not only confined to a particular area but selected from within the area by reference to a particular creed … the persons to be benefited must be the whole community, or all the inhabitants of a particular area. Not a class within a class.’ Lord Simonds The same principle was applied in IRC v Baddeley (1955) (see above). In 2008, the Charity Commission published guidelines on the public benefit requirement and declared that the test will not be satisfied, as stated in paras 2(b) and (c) of the guide, if the provision of the benefit is determined by the ability to pay fees charged and excludes people in poverty. In Independent Schools Council v Charity Commission [2011] UKUT 421, the Upper Tribunal, in judicial review proceedings, decided that the Charity Commission guidelines were defective and ought to be quashed in respect of paras 2(b) and (c) as stated above. The issue in the proceedings concerned the accuracy of the Charity Commission’s published guidelines on the public benefit requirement and its application to fee-paying independent schools. Charitable independent schools would fail to act for the public benefit if they failed to provide some benefit for its potential beneficiaries, other than its fee-paying students. The Upper Tribunal decided that it was a matter for the trustees to decide how their obligations might be fulfilled. Benefits for potential beneficiaries who may not have the capacity to pay the full fees for their education may be provided in a variety of ways including, for example, the remission of all or partial fees to ‘poor’ students and the sharing of educational facilities with the maintained sector. As a result of the judgment in the Independent Schools Council case, the Charity Commission modified its guidelines on public benefit. The salient points in the guidelines include the following: ■ There are two aspects of public benefit – the ‘benefit’ and ‘public’ aspects. ● The ‘benefit aspect’ involves an inquiry as to whether the trust purposes comply with one or more of the 13 purposes laid down in s 2 of the Charities Act 2011, and any detriment or harm that results from the purpose does not outweigh the benefit. The benefit is required to be identifiable and capable of being proved, where necessary. In some cases the purpose may be so clearly beneficial that there may be little need for trustees to provide evidence of this. ● The ‘public aspect’ concerns those who may benefit from the funds of the trust and is required to be the public in general, or a sufficient section of the public. There is no set minimum number of persons who may comprise a sufficient section of the public. This issue is decided on a case-by-case basis and the approach is not the same for every purpose. With the exception of trusts for the relief or prevention of poverty, the test will not be satisfied if the beneficiaries are identified by reference to their family relationship, employment by an employer or membership of an unincorporated association. 12.9.2 Public benefit and poverty exception Before the introduction of the Charities Act 2011 (or the Charities Act 2006, which was consolidated in the 2011 Act) the courts adhered to the view that trusts for the relief of poverty were exempt from the public benefit test. Trusts for the relief of poverty are charitable even though the beneficiaries are linked inter se or with an individual or small group of individuals. In short, it is arguable that trusts for the relief of poverty are not subject to the strict public benefit test. The practice of the courts has always been to exclude such trusts from the public benefit test. The justification for this exception or exemption is that the creation of such trusts is prompted by motives of altruism with inherently public benefit characteristics, see Lord Greene’s judgment in Re Compton [1945] Ch 123: JUDGMENT ‘There may perhaps be some special quality in gifts for the relief of poverty which places them in a class by themselves. It may, for instance, be that the relief of poverty is to be regarded as in itself so beneficial to the community that the fact that the gift is confined to a specified family can be disregarded.’ Accordingly, in Gibson v South American Stores Ltd [1950] Ch 177 and Dingle v Turner [1972] AC 601, the courts decided that gifts in order to relieve the poverty of employees of a company were charitable. JUDGMENT ‘[C]ounsel for the appellant hardly ventured to suggest that we overrule the poor relations cases. His submission was that which was accepted by the Court of Appeal for Ontario in In Re Cox [1951] OR 205 – namely that while the poor relations cases might have to be left as longstanding anomalies there was no good reason for sparing the poor employees cases which only date from In Re Gosling [1900] 48 WR 300, and which have been under suspicion ever since the decision in In Re Compton. But the poor members and the poor employees decisions were a natural development of the poor relations decisions and to draw a distinction between different sorts of poverty trusts would be quite illogical and could certainly not be said to be introducing greater harmony into the law of charity. 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, as one must, that they are properly administered in the sense that benefits under them are only given to people who can fairly be said to be, according to current standards, poor persons, to treat such trusts as charities is not open to any practical objection. So it seems to me it must be accepted that wherever else it may hold sway the Compton rule has no application in the field of trusts for the relief of poverty.’ Lord Cross At the same time, the courts have drawn a subtle distinction between private trusts for the relief of poverty and public trusts for the same purpose. The distinction has been expressed as a private trust for identifiable individuals with the motive of relieving poverty, and a charitable trust in order to relieve poverty amongst a class of persons; for example a gift for the settlor’s poor relations, A, B and C, may not be charitable but may exist as a private trust, whereas a gift for the benefit of the settlor’s poor relations without identifying them may be charitable. It appears that the distinction between the two types of trust lies in the degree of precision in which the objects have been identified. The more precise the language used by the settlor in identifying the poor relations, the stronger the risk of failure as a charitable trust. This is a question of degree. CASE EXAMPLE Re Scarisbrick [1951] Ch 622, CA A bequest was made on trust ‘for such relations of my said son and daughters as in the opinion of the survivor shall be in needy circumstances’. The court held that the gift was charitable. JUDGMENT ‘[T]he true question in each case [is] whether the gift was for the relief of poverty amongst a class of persons, or rather … a particular description of poor, or was merely a gift to individuals, albeit with relief of poverty amongst those individuals as the motive of the gift … It should be added that the class of beneficiaries falls to be ascertained at the death of the survivor of the three children, not at the testatrix’s death. Thus, the class of beneficiaries is so extensive as to be incapable of being exhaustively ascertained and includes persons who the testatrix may never have seen or heard of.’ Jenkins LJ The court came to a similar conclusion in Re Segelman [1996] 2 WLR 173. Chadwick J was influenced by the fact that the class of ‘poor and needy’ relatives was not closed on the date of the testator’s death. The list of beneficiaries included six named members of the testator’s family and the issue (unnamed) of five of them who were ‘poor and needy’, provided that they were born within 21 years following the death of the testator. There were 26 persons within the class. The court decided that the gift was charitable for the relief of poverty. JUDGMENT ‘Prima facie , a gift for the benefit of poor and needy persons is a gift for the relief of poverty … [and] is no less charitable because those whose poverty is to be relieved are confined to a particular class limited by ties of blood or employment: see In Re Scarisbrick [1951] Ch 622; and Dingle v Turner [1972] AC 601. 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. It remained open for a further period of 21 years. During that period issue of the named individuals born after the death of the testator will become members of the class. It is, in my view, impossible to attribute to the testator an intention to make a gift to those after-born issue as such. His intention must be taken to have been the relief of poverty amongst the class of which they would become members.’ Chadwick J The position today is that there is an element of ambiguity as to whether trusts for the relief of poverty are subject to a different test of public benefit since the introduction of the Charities Act 2011 (or its predecessor, the Charities Act 2006). On the one hand, no such concession has been enacted in s 4 of the 2011 Act and any presumptions regarding public benefit have been abolished. On the other hand, s 4(3) consolidates the common law meaning of public benefit and declares that ‘any reference to the public benefit is a reference to the public benefit as that term is understood’. The Charity Commission and the Attorney General’s office are concerned that the law on public benefit may have been modified by statute, but recognise that it is only a question of time before the courts consider the issue. The possible outcomes are: (a) The law has been changed and trusts for the relief of poverty are subject to the rigorous public benefit test. (b) The law has not been modified and a special approach to the public benefit test in the context of trusts for the relief of poverty remains. (c) A third approach is that the law in this context has been changed, not retrospectively, but only from the date that the Charities Act 2006 came into force, namely 1 April 2008. The provisions of the Charities Act 2006 were consolidated in the Charities Act 2011. The effect may be that the funds of charitable trusts for the relief of poverty that existed before 1 April 2008 which contain a ‘personal nexus’ may be applied cy-près. However, in Attorney General v Charity Commission [2012] WTLR 977, the Upper Tribunal allayed fears that the public benefit test applicable to trusts for the relief of poverty has been modified by the Charities Act. The Upper Tribunal clarified this area of the law on the test of public benefit. The Upper Tribunal ruled that the pre-2008 approach of the courts is still relevant and applicable today to determine whether the public benefit test for the relief of poverty is satisfied. The Attorney General v Charity Commission case involved a non-adversarial reference by the Attorney General. The Upper Tribunal published its opinion on the public benefit requirement that is applicable to charitable trusts for the relief of poverty. The Tribunal decided: (i) Where a trust for the relief of poverty is limited, owing to a personal nexus, by reference to a class of individuals, their employment by a commercial company, or their membership of an unincorporated association, the trust was nevertheless capable of satisfying the public benefit test. (ii) Such trusts are not automatically treated as charitable but the approach is based on whether the evidence satisfies the dual nature test for public benefit. (iii) The abolition of the presumption of public benefit by statute will have no impact on whether a trust for the relief of poverty is charitable or not. (iv) In deciding whether a trust satisfied the public benefit test in the pre-Charities Act era, the courts had proceeded not by way of presumption, but on the evidence that existed on the facts of each case. (v) There was no real distinction between the expressions ‘prevention’ and ‘relief of poverty, as used in the Charities Act 2011. In 2013 the Charity Commission published its guidelines on the public benefit requirement and affirmed that trusts for the relief of poverty were subject to a broader set of rules. The public benefit requirement may be met by satisfying the ‘benefit’ aspect only. Accordingly, trusts for the relief of poverty may satisfy the public benefit test where the beneficiaries are defined by reference to their family relationship, employment by an employer or membership of an unincorporated association. But the test will not be satisfied if the beneficiaries comprise a group of named individuals. 12.9.3 Classification of charitable purposes Prior to the introduction of the Charities Act 2006 (consolidated in the Charities Act 2011), a useful classification of the charitable purposes, laid down in the preamble to the Charitable Uses Act 1601 (see earlier), was adopted by Lord Macnaghten in IRC v Pemsel (1891), as follows: (a) the relief of poverty; (b) the advancement of education; (c) the advancement of religion; and (d) other purposes beneficial to the community. It must be emphasised that Lord Macnaghten’s statement did not constitute a definition of charitable purposes but merely a classification of the purposes within the preamble. In short, prior to the Charities Act 2006, there was no comprehensive definition of charitable purposes. The purposes stated in the preamble (albeit obsolete) were the closest to a definition of charitable purposes. It became the practice of the courts to refer back to the preamble or precedents decided in accordance with the purposes within the preamble or indeed the ‘spirit’ (or flavour) of the preamble. There is no doubt that the classification of charitable purposes and approaches of the courts have provided a degree of flexibility that has allowed the meaning of charity to adapt to the changing needs and expectations of society. However, the four heads of charity provide little effective guidance to the public about what is a charitable purpose. The classification of charitable purposes by Lord Macnaghten is a vague indication of some charitable activities. Charitable purposes extend beyond education, religion and relief of the poor. Indeed, but for the creative approach of the courts, as evidenced by the multitude of judicial decisions, the law of charities would have been in a state of disarray. This state of affairs prompted Lord Sterndale MR in Re Tetley [1923] 1 Ch 258 to express his dissatisfaction at being unable to find any guidance as to what constitutes a charitable purpose: JUDGMENT ‘I am unable to find any principle which will guide one easily and safely through the tangle of cases as to what is and what is not a charitable gift. If it is possible I hope sincerely that at some time or other a principle will be laid down.’ Section 3 of the Charities Act 2011 addresses some of these limitations by adopting a statutory definition of ‘charitable purposes’. This is achieved by reference to a two-step approach – the listing or identification of a variety of charitable purposes, and the public benefit test. This is the first-ever statutory definition of a charity. Section 3(1) contains a list of some 13 charitable purposes – 12 specific descriptions of charitable purposes and a general provision designed to maintain flexibility in the law of charities. The charitable purposes enacted are intended to be a comprehensive list of charitable activities. Most of these purposes, in any event, were charitable before the Act was introduced. These purposes are: (a) the prevention or relief of poverty; (b) the advancement of education; (c) the advancement of religion; (d) the advancement of health (including the prevention or relief of sickness, disease or human suffering); (e) the advancement of citizenship or community development; (f) the advancement of the arts, heritage or science; (g) the advancement of amateur sport (games which promote health by involving physical or mental skill or exertion); (h) the advancement of human rights, conflict resolution or reconciliation; (i) the advancement of environmental protection or improvement; (j) the relief of those in need, by reason of youth, age, ill-health, disability, financial hardship or other disadvantage (including the provision of accommodation and care to the beneficiaries mentioned within this clause); (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 (the residual category). With the exception of amateur sport, arguably, all of these purposes were charitable under the law that existed before the 2011 Act, as illustrated by the wealth of case law. Section 3(3) endorses the common law approach to charitable objects by reference to the purposes declared in paragraphs (a) to (1) above. This is done by determining whether a purpose has some resemblance to an example as stated in the preamble, or to an earlier decided case that was considered charitable. In these cases the same meaning will be attributable to the term. Section 3(3) of the 2011 Act states that ‘where any of the terms used in any of the paragraphs (a) to (1)… has a particular meaning under the law relating to charities in England and Wales, the term is to be taken as having the same meaning where it appears in that provision’. Section 3(1)(m)(i)–(iii) consolidates the common law approach to the residual category of charitable purposes. SECTION ‘Other purposes– (i) that are not within paragraphs (a) to (I) but are recognised as charitable purposes by virtue of section 5 (recreational and similar trusts, etc.) 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 the paragraphs (a) to (I)…; (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 paragraph.’ This subsection affirms the pre-2008 (the date that the Charities Act 2006 came into force) broad approach to purposes within the fourth heading of the Pemsel classification as summarised by Lord Wilberforce in Scottish Burial Reform and Cremation Society v City of Glasgow Corporation [1968] AC 138, including the ‘spirit’ of charitable purposes, thus: JUDGMENT ‘The purposes in question, to be charitable, must be shown to be for the benefit of the public, or the community, in a sense or manner within the intendment of the preamble to the [Charitable Uses Act 1601]. The latter requirement does not mean quite what it says; for it is now accepted that what must be regarded is not the wording of the preamble itself, but the effect of decisions given by the court as to its scope, decisions which have endeavoured to keep the law as to charities moving according as new social needs arise or old ones become obsolete or satisfied.’ 12.9.4 Consideration of the charitable purposes Category 1: the prevention or relief of poverty Section 3(1)(a) of the Charities Act 2011 enacts that the ‘prevention or relief of poverty’ is capable of being a charitable purpose. As stated earlier, this description consolidates the common law approach. Very little turns on the distinction between ‘prevention’ and ‘relief. Lord MacNaghten in Pemsel , in classifying charitable purposes, referred to trusts for the ‘relief of poverty but case law and the Charity Commission drew no distinction between ‘prevention’ and ‘relief. Accordingly, trusts for the provision of the basic essentials of life, agriculture, irrigation and shelter in order to prevent an impending natural disaster are as much charitable as dealing with the consequences of such disasters. ‘Poverty’ includes destitution but is not interpreted so narrowly as to mean destitution. It connotes that the beneficiaries are in straitened circumstances and unable to maintain a modest standard of living (determined objectively). The Charity Commission in its report in December 2008 explained the concept of poverty: QUOTATION ‘The expression, “people in poverty” does not just include people who are destitute, but also those who cannot satisfy a basic need without assistance. The courts have avoided setting an absolute criteria to be met in order for poverty to be said to exist, although they have been prepared to state in specific cases whether or not a particular level of income or assets meant that a person was “poor”. In essence, “people in poverty” generally refers to people who lack something in the nature of necessity or quasi-necessity, which the majority of the population would regard as necessary for a modest, but adequate standard of living.’ CASE EXAMPLE Re Coulthurst [1951] Ch 661, CA A bequest of £20,000 to trustees was subject to the direction that the income be paid to the widows and orphans of deceased officers and ex-officers of Coutts & Co, as the trustees may decide the most deserving of such assistance, having regard to their financial circumstances. The court decided that, on construction of the terms of the gift, the gift was charitable for the relief of poverty. JUDGMENT ‘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.’ Evershed MR In addition, the gift is required to relieve the misery of poverty by providing the basic necessities of human existence – food, shelter and clothing. The expression ‘relief signifies that the beneficiaries have a need attributable to their condition which requires alleviating and which the beneficiaries may find difficulty in alleviating from their own resources. In Biscoe v Jackson (1887) 25 Ch D 460, a gift to establish a soup kitchen in Shoreditch was construed as a valid charitable trust for the relief of poverty. Likewise, in Shaw v Halifax Corporation [1915] 2 KB 170 it was decided that a home for ladies in reduced circumstances was charitable. Similarly, in Re Clarke [1923] 2 Ch 407 a gift to provide a nursing home for persons of moderate means was charitable. But a gift for the ‘working classes’ does not necessarily connote poverty: see Re Saunders’ Will Trust [1954] Ch 265, although a gift for the construction of a ‘working men’s hostel’ was construed as charitable under this head: see Re Niyazi’s Will Trust [1978] 1 WLR 910. JUDGMENT ‘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. When hostel is prefixed by the expression working men’s, then the further restriction is introduced of this hostel being intended for those with a relatively low income who work for their living, especially as manual workers.’ Megarry VC in Re Niyazi Under this head of poverty, it is essential that all the objects fall within the designation ‘poor’. If someone who is not poor is able to benefit significantly from the funds, the gift will fail as not being one for the relief of poverty. In Re Gwyon [1930] 1 Ch 225, a trust to provide free trousers for boys resident in Farnham was not charitable because there was no restriction to the effect that the boys were required to be poor. Relief of poverty maybe provided directly for the intended beneficiaries, and includes: apprenticing poor children, see AG v Minshull (1798) 4 Ves 11; the provision of allotments or buying land to be let to the poor at a low rent, see Crafton v Firth (1851) 4 De G & Sm 237; the provision of cheap flats to be let to aged persons of small means at rents that they can afford to pay, see Re Cottam [1955] 1 WLR 1299; gifts for the establishment or support of institutions for the benefit of particular classes of poor persons such as railway servants, see Hull v Derby Sanitary Authority (1885) 16 QBD 163; and policemen, see Re Douglas (1887) 35 Ch D 472. Relief may be provided indirectly, such as providing accommodation for relatives coming from a distance to visit patients critically ill in hospital, see Re Dean’s Will Trust [1950] 1 All ER 882; a home of rest for nurses at a particular hospital, see Re White’s Will Trust [1951] 1 All ER 528. As stated earlier, the approach of the courts to the public benefit test has been fairly relaxed in this context. Category 2: the advancement of education Section 3(1)(b) of the Charities Act 2011 identifies the advancement of education as a charitable purpose. This classification originates from the preamble to the 1601 Act, which refers to ‘the maintenance of schools of learning, free schools and scholars in universities’. The Charity Commission in its Guide for Consultation, published in March 2008, identified many forms of education. QUOTATION ‘Education today includes: ■ formal education; ■ community education; ■ physical education and development of young people; ■ training (including vocational training) and life-long learning; ■ research and adding to collective knowledge and understanding of specific areas of study and expertise; ■ the development of individual capabilities, competencies, skills and understanding.’ Charity Commission 2008 ‘Education’ has been interpreted generously and is not restricted to the classroom mode of disseminating knowledge, but requires some element of instruction or supervision. Thus, research is capable of being construed as the provision of education. CASE EXAMPLE Re Hopkins’ Will Trust [1964] 3 All ER 46 Money was bequeathed to the Francis Bacon Society, to be used to search for the manuscripts of plays commonly ascribed to Shakespeare but believed by the Society to have been written by Bacon. The court decided that the gift was for the advancement of education. The discovery of such manuscripts would be of the highest value to history and literature. JUDGMENT ‘The word education must be used in a wide sense, certainly extending beyond teaching, and the requirement is that, in order to be charitable, 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 may cover – education in this last context extending to the formation of literary taste and appreciation.’ Wilberforce J More recently, Slade J in McGovern v A-G [1981] 3 All ER 493 summarised the principles governing research: JUDGMENT ‘(i) A trust will ordinarily qualify as a charitable trust if, but only if, (a) the subject matter of the proposed research is a useful object of study; and (b) it is contemplated that the knowledge acquired as a result of the research will be disseminated to others; and (c) the trust is for the benefit of the public, or a sufficiently important section of the public. (ii) In the absence of a contrary context, however, the court will be readily inclined to construe a trust for research as importing subsequent dissemination of the results thereof. (iii) Furthermore, if a trust for research is to constitute a valid trust for the advancement of education, it is not necessary either (a) that the teacher/pupil relationship should be in contemplation, or (b) that the persons to benefit from the knowledge to be acquired should be persons who are already in the course of receiving “education” in the conventional sense.’ On the other hand, the mere acquisition of knowledge without dissemination or advancement will not be charitable. The emphasis here is on the publication or sharing of the information or knowledge. CASE EXAMPLE Re Shaw; Public Trustee v Day [1957] 1 All ER 745 The testator, George Bernard Shaw, bequeathed money to be used to develop a 40-letter alphabet and translate his play Androcles and the Lion into this alphabet. The court held that the gift was not charitable, as it was aimed merely at the increase of knowledge. JUDGMENT ‘The research and propaganda enjoined by the testator seem to me merely to tend to the increase of public knowledge in a certain respect, namely, the saving of time and money by the use of the proposed alphabet. There is no element of teaching or education combined with this, nor does the propaganda element in the trusts tend to more than to persuade the public that the adoption of the new script would be a good thing, and that, in my view, is not education.’ Harman J Gifts which have been upheld as charitable under this head have included: trusts for choral singing in London ( Royal Choral Society v IRC [1943] 2 All ER 101); the diffusion of knowledge of Egyptology and the training of students in Egyptology ( Re British School of Egyptian Archaeology [1954] 1 All ER 887); the encouragement of chess playing by boys or young men resident in the city of Portsmouth ( Re Dupree’s Trusts [1944] 2 All ER 443); the furtherance of the Boy Scout movement by helping to purchase sites for camping ( Re Webber [1954] 3 All ER 712); the promotion of the education of the Irish by teaching self-control, elocution, oratory, deportment and the arts of personal contact and social intercourse ( Re Shaw’s Will Trust [1952] 1 All ER 712); the publication of law reports which record the development of judge-made law ( Incorporated Council of Law Reporting for England and Wales v A-G [1971] 3 All ER 1029); the promotion of the works of a famous composer ( Re Delhis’ Will Trust [1957] 1 All ER 854) or celebrated writer ( Re Shakespeare Memorial Trust [1923] 2 Ch 389); the students’ union of a university ( Baldry v Feintuck [1972] 2 All ER 81); the furtherance of the Wilton Park project, i.e. a conference centre for discussion of matters of international importance ( Re Koeppler’s Will Trust [1986] Ch 423); the provision of facilities at schools and universities to play association football or other games ( IRC v McMullen [1981] AC 1); and professional bodies which exist for the promotion of the arts or sciences ( Royal College of Surgeons of England v National Provincial Bank Ltd [1952] 1 All ER 984). Many of these purposes will now overlap with other specified purposes laid down in the Charities Act 2006. Before deciding whether the gifts are charitable or not, the courts are required to take into account the usefulness of the gifts to the public. This may be effected by judicial notice of the value of the gift to society. In the event of doubt, the courts may take into account the opinions of experts. The opinions of the donors are inconclusive. In Re Pinion [1965] Ch 85, a gift to the National Trust of a studio and contents to be maintained as a collection failed as a charity. The collection as a whole lacked any artistic merit. The judge could conceive of no useful purpose in foisting on the public this ‘mass of junk’. The promotion of education of a political nature will be subject to the process of construction by the courts to ascertain the primary purpose of the gift. If the main object is political the gift will fail as a charity. But if the political element is subsidiary to the main political objective the gift will be valid. In Buxton v Public Trustee (1962) TC 235, the trust was designed to promote and aid the improvement of international relations and intercourse by various prescribed methods. The court held that the trust was not charitable because its objects were ‘public utility or political’. Whereas, in Re Koeppler’s Will Trust [1986] Ch 423 the gift created a valid charitable trust. In this case the gift was to create ‘Wilton Park’, i.e. a conference centre for participants who were capable of influencing opinion in Member States of the Organisation for Economic Co-operation and Development. The court decided that, on construction of the objects of the centre, there was no question of the conferences being intended to further the interests of political parties, or to procure changes in the law or government policy of any country. Even when the conferences touched on political issues they constituted no more than genuine attempts to ascertain and disseminate the truth. tutor tip The law on charitable trusts involves a vast array of cases and literature, with a good starting point being the Preamble to the Statute of Elizabeth 1601 and culminating in the Charities Act 2006.’

• Help and information
• Comparative
• Constitutional & Administrative
• Criminal Justice
• Criminology
• Environment
• Equity & Trusts
• Competition
• Human Rights & Immigration
• Intellectual Property
• International Criminal
• International Environmental
• Private International
• Public International
• IT & Communications
• Jurisprudence & Philosophy of Law
• Legal Practice Course
• English Legal System (ELS)
• Legal Skills & Practice
• Medical & Healthcare
• Study & Revision
• Business and Government
• Share This Facebook LinkedIn Twitter

Equity & Trusts: Text, Cases, and Materials (3rd edn)

• Acknowledgements
• Table of Cases
• Table of Statutes
• Table of Statutory Instruments
• Table of International Instruments
• 1. Introduction to Equity
• 2. Introduction to Trusts
• 3. The Requirements of an Express Trust
• 4. Creation of Express Trusts
• 5. Charitable Purpose Trusts
• 6. Non-Charitable Purpose Trusts
• 7. Constructive Trusts
• 8. Resulting Trusts
• 9. Informal Arrangements Relating to Land
• 10. Beneficiaries
• 11. General Principles Relating to Trustees
• 12. The Administration of Trusts
• 13. Dispositive Powers
• 14. Fiduciary Obligations
• 15. Variation of Trusts
• 16. Liability for Breach
• 17. Personal Claims and Remedies
• 18. Proprietary Claims and Remedies
• 19. Third Party Liability
• 20. Equitable Orders

p. 172 p. 173 5. Charitable Purpose Trusts

• Paul S Davies Paul S Davies Professor of Commercial Law, University College London
•  and  Graham Virgo Graham Virgo QC (Hon) Professor of English Private Law; Senior Pro-Vice Chancellor (Education), University of Cambridge, Bencher, Lincoln's Inn.
• https://doi.org/10.1093/he/9780198821830.003.0005
• Published in print: 24 May 2019
• Published online: September 2019

All books in this flagship series contain carefully selected substantial extracts from key cases, legislation, and academic debate, providing able students with a stand-alone resource. This chapter discusses the charitable trust — its definition and the consequences of its failure. A charitable trust is defined as a public trust for purposes that provide a benefit to the public or a section of the public and is a trust subject to supervision by the Charity Commission. A trust is only considered charitable if it is established for a purpose that the law regards as charitable. The purposes of the trust must be wholly and exclusively charitable otherwise the trust will be void. The consequences of the charitable trust failing depend on whether the failure occurs initially or subsequently. If the purpose fails initially and the settlor had a general charitable intention, the trust property can be applied for a similar charitable purpose through the application of a body of rules known as the cy-pres doctrine. If the purpose fails subsequently the cy-pres doctrine will apply automatically.

• charitable trust
• public trust
• Charity Commission
• charitable intention
• trust property
• cy-pres doctrine
• public benefit

You do not currently have access to this chapter

Please sign in to access the full content.

Access to the full content requires a subscription

Printed from Oxford Law Trove. Under the terms of the licence agreement, an individual user may print out a single article for personal use (for details see Privacy Policy and Legal Notice).

date: 24 April 2024

• Cookie Policy
• Privacy Policy
• Legal Notice
• Accessibility
• [66.249.64.20|185.80.151.9]
• 185.80.151.9

Characters remaining 500 /500

ESSAY SAUCE

FOR STUDENTS : ALL THE INGREDIENTS OF A GOOD ESSAY

Essay: Charitable trusts

Essay details and download:.

• Subject area(s): Law essays
• Reading time: 6 minutes
• Price: Free download
• Published: 6 June 2021*
• File format: Text
• Words: 1,674 (approx)
• Number of pages: 7 (approx)

Text preview of this essay:

This page of the essay has 1,674 words. Download the full version above.

Charitable trusts  are valid purpose trusts.  A  Charitable  trust  is a trust for a purpose, but where the purpose is regarded as sufficiently beneficial to the community at large to warrant acceptance of validity. This means that if it perfectly possible to establish a trust for the achievement of a purpose, provided that the purpose in law is regarded as charitable.  As far as charities are concerned, it is not important that there is o human beneficiary capable of enforcing the trust because the Attorney General may take action in respect of all  charitable trusts  subject to certain aspects of the perpetuity rule and may be of unlimited duration. Charitable trusts are distinguishable from private trusts in many ways.  First, charitable trusts may last in perpetuity because it is not contrary to public policy for the money to be permanently dedicated to a charitable purpose which is beneficial to the community and likewise a gift over from one charity to another, which could be triggered if the original charity should fail to observe some limitation placed on the use of the property by the donor, will not fail if it take effect outside the perpetuity period .  This is because charity is regarded in law as indivisible, irrespective of the actual group or body carrying out the purpose.  Secondly should a charitable trust fail the normal rules of resulting trusts may not apply.  Thirdly, there are some differences in the way charitable trustees may administer a charitable trust and some difference in the scope of their powers ad duties. The most important difference in relation to  charitable trusts  is that of relief from fiscal obligations and advantages that are received from charities.

1.    New Dawn

Traditionally,  charitable trusts  are said to fall within four broad categories, being those that were identified by Lord Macaughten in Pemsel’s case : viz, trusts for the relief of poverty, trusts for the advancement of education; trusts for the advancement of religion; and finally trusts for other purposes beneficial to the community. This fourfold classification represents a useful descriptive tool rather than a precise analysis of the meaning of charity .  The most crucial point seems to be that for a trust to be charitable; it must fall within “the spirit and intendment” of the Preamble of 1601 and it is not enough simply that a purpose is beneficial to the community; it must be one which is beneficial and which the law regards as charitable.  This is particularly important when considering the fourth category of charity referred to in Pemsel because not every purpose trust which confers a benefit to the community will be charitable , despite some suggestions to the contrary . It may be that this trust is within the scope of trusts for the advancement of religion and is thereby charitable. There is no doubt here that the proposed trust is connected with a religious establishment and questions concerning the disputed status of some faiths and beliefs are not relevant . Yet, it is unclear whether trusts for religious purposes per se can be charitable if they are not otherwise for the advancement of religion

2.    Democrac

There is first an argument here that this could fall within the category of education, however there is also an argument that this has political motivation.  Each of these arguments will now be considered in turn. The Preamble to the Statute of 1601 itself talks of “schools of learning”, and there is o doubt that the endowment of schools is a charitable purpose.  There is however an argument that the charitable purpose is limited to a particular area and might fail the test of public benefit. The class of persons who will receive such political education is fairly limited, and this may well be regarded as a class within a class and so too narrowly drawn to confer a benefit on the public, as in Williams Trustees v IRC . On the other hand, in this case, the door is not attempting to benefit persons with whom he is personally connected.  In the end, it will be a matter of judgement, although if the donor wishes to avoid these problems he cold amend the class limiting factors. It is possible that this might be regarded as a trust for the relief of poverty, in that it is for those in inner city schools.  However, although the construction would avoid the “public benefit” difficulties just discussed, the better view is that the purpose of the trust is educational and that the disadvantaged nature of the persons who might benefit is a subsidiary factor.  In sum, there is a good argument that this will be an educational charity, provided difficulties over the “public” nature of the benefits thereby conferred can be overcome.

3.    Medi Aid

It is perfectly in order for a charitable trust to allow the trustees some discretion in the selection of charitable objects provided, of course, that the trustees are required by the trust to exercise that discretion in favour of objects that are exclusively charitable.   In this particular cases there are two issues firstly whether the administration of treatment is in itself charitable and secondly, whether the trustees ability to use the money for those that have worked in the NHS has any bearing on whether or not this will or will not be a charitable trust. As far as the administration of medication is concerned, this is likely to be a purpose that falls within the category of “other purposes beneficial to the community”, the fourth category that was identified in the case of Pemsel.  This is despite the fact that there is some doubt as to how we are to determine whether any given purpose is charitable within this fourth class.  According to Russell LJ in Incorporated Council for Law Reporting in England and Wales v Attorney General, a court is entitled to assume that if a purpose is in itself beneficial to the community that it is also charitable in law.  On the other hand, the more traditional approach requires that there must be some precedent or analogy with the 1601 Preamble or previous case law before a new purpose which beneficial in itself can also be regarded as charitable . When considering the fourth category of charity it is clear that the beneficial nature of the purpose needs to be positively established before its charitable status can be admitted. Traditionally, when determining whether any purpose was charitable within the fourth category, the courts would look to the Preamble of the Statute of Charitable Uses and previous cases, and then decide whether there was either a precedent or analogy for the charitable status of the new purpose .  This could mean that a perfectly useful and worthy purpose might fail to be recognised as a charity simply because of a lack of existing precedent, although in practice this is highly unlikely given the wealth of material and the extensive discretion which judges enjoy.  On this analysis it is likely that this proposed charity will be granted charitable status. The second question which must now be considered is whether or not a sufficient section of the public benefit from this charitable purpose.  The law admits the special status and privileges of charitable trusts only when the benefit is not confined to a few people with special status.  This general statement of principle must be qualified for it is clear that charities for the relief of poverty are not subject to such a stringent test of public benefit as other types of charity . To consider whether a charity is or is not for the public benefit there are some questions that must be answered.  First, it is obvious that the benefits of a charitable trust must not be restricted to a group of people that are numerically negligible . The point is that the class of persons who may benefit from the charitable purpose must not be narrowly restricted by definition; it matters not that only a small group of people actually enjoy the benefits of the charitable purpose so long as those benefits are available to the public should they come forward .  What is numerically negligible will depend on the facts of the case. Given here that the NHS is such a huge public organisation, it is extremely unlikely that the persons who can benefit will be numerically negligible. The benefits derived from the charity may be limited to a class of persons .  Although this can only be a “rule of thumb”, the idea is that one limitation on the class of persons who may derive a benefit from the charity does not destroy the “public” character of the trust, but that a second or third limitation may well make it so difficult for the public at large to  qualify for the charitable benefit  that there is no real public benefit at all . The third consideration that must be made is that a trust will not be regarded as charitable, if the potential class of persons likely to benefit are united by a common personal bond.  This is known as the “Compton test ”, and it was confirmed by the House of Lords in Oppenheim.  Essentially, the point is that if the class intended to benefit from the charity shares a common personal relationship- perhaps all employees of a company- they may not be capable of being regarded as a section of the public, even if numerically very great.  However, there are difficulties here and there are doubts whether this “personal nexus” test is suitable to determine the public benefit.  As must was stated in Dingle v Turner , although this case was concerned with the relief of poverty which is outside the test and therefore renders its criticisms of Oppenheim strictly obiter. One important criticism is that it is unclear exactly what the personal nexus test is designed to prevent. On the basis of this personal nexus test it is likely that this charity will fail as it does not satisfy the requirements of public benefit as it is designed to benefit only those that have worked within the NHS.

...(download the rest of the essay above)

About this essay:

If you use part of this page in your own work, you need to provide a citation, as follows:

Essay Sauce, Charitable trusts . Available from:<https://www.essaysauce.com/law-essays/charitable-trusts/> [Accessed 24-04-24].

These Law essays have been submitted to us by students in order to help you with your studies.

* This essay may have been previously published on Essay.uk.com at an earlier date.

Essay Categories:

• Accounting essays
• Architecture essays
• Business essays
• Computer science essays
• Criminology essays
• Economics essays
• Education essays
• Engineering essays
• English language essays
• Environmental studies essays
• Essay examples
• Finance essays
• Geography essays
• Health essays
• History essays
• Hospitality and tourism essays
• Human rights essays
• Information technology essays
• International relations
• Leadership essays
• Linguistics essays
• Literature essays
• Management essays
• Marketing essays
• Mathematics essays
• Media essays
• Medicine essays
• Military essays
• Miscellaneous essays
• Music Essays
• Nursing essays
• Philosophy essays
• Photography and arts essays
• Politics essays
• Project management essays
• Psychology essays
• Religious studies and theology essays
• Sample essays
• Science essays
• Social work essays
• Sociology essays
• Sports essays
• Types of essay
• Zoology essays

Gift Planning History

Charitable Gift Planning in America

The 1000-Year History of Charitable Trusts

Introduction: History Matters

Soon after winning independence and ratifying a new U.S. Constitution, many states banned the use of charitable trusts. What was going on?

The answer is an important chapter in the thousand-year history of charitable trusts.

Eager to set aside ancient English precedents in favor of modern laws applicable to the American people, 1 newly-empowered legislators revoked many laws, including the Statute of Charitable Uses , enacted two centuries earlier by Parliament. (In modern law, what was called a “use” we now call a trust.)

Why was the statute unacceptable? One reason is that the statute specifically authorized the Church of England to act on behalf of the kingdom by supervising and regulating charitable trustees. 2 The statute could not be amended by simply substituting an American equivalent for England’s official state church. Freedom of religion, including freedom from regulation by any particular church, was enshrined in the first amendment to the Constitution: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.”

Policymakers assumed the 1601 statute provided the sole legal authority to create charitable trusts, so they believed that revoking the statute meant charitable trusts were no longer valid under the laws of their states. That position was upheld by the U.S. Supreme Court in 1819 in a decision written by Chief Justice John Marshall. 3

Legal support for charitable trusts in the United States was at a crossroads.  A better understanding of history changed the course of state and federal policies.

In 1818, British legal historians began to uncover overwhelming evidence that charitable trusts predated the Statute of Charitable Uses by hundreds of years. The statute was not the original authority for people creating charitable trusts.

Pointing to historical evidence first published in the U.S. in 1827, 4 a U.S. circuit court of appeals decision in Magill v. Brown (1833) 5 found that charitable trusts preceded the 1601 statute.  In 1844 the U.S. Supreme Court agreed in Vidal v. Girard’s Executors that the American law of charitable trusts was grounded in the long experience of trust donors and the precedents of common law. The court ruled that charitable trusts were valid even in states that had revoked the English statute, although New York imposed other restrictions. 6 

History may not always repeat itself, but sometimes it rhymes. In this 50 th anniversary year of the Tax Reform Act of 1969, a few people have asserted that charitable gift planning began with the 1969 legislation, which “created charitable remainder trusts.” American policymakers must not act on a false assumption that can be corrected easily by historical information. Like the Statute of Charitable Uses , the 1969 Act was intended to prevent well-known abuses of trust arrangements. [See my article on The 50 th Anniversary of the Tax Reform Act of 1969 ]   

Here is a selection of highlights from the thousand-year history of charitable trusts.

The Early History of Charitable Trusts and Trust-Like Gifts

The idea of creating trusts to realize personal and charitable objectives has deep international roots. Arrangements for holding and administering property “either for the benefit of someone else or to further some particular purpose,” 7 including charitable purposes, were available in medieval European countries before the year 1000.

Compiling evidence about the history of trusts is a relatively recent activity.  Today there are substantial reference works devoted to the law of trusts, but the concept of “trusts” as the subject of a unified body of law began in the 1800s. 8  People used trusts and related arrangements for many centuries before scholars developed a systematic legal framework that enabled rigorous research.

There is a growing consensus that, while Roman law did not recognize a trust, Roman concepts provided essential elements in the development of charitable trusts in Europe. Familiar modern words such as annuity, beneficiary, charity, donation, eleemosynary, executor, fiduciary, residuum, and testament have Latin roots.

An important trust-like arrangement called a usufruct was authorized under Roman law. The use of property (usually land) could be transferred temporarily to another person, who enjoyed beneficial use of the property (its “fruits”) without the right to change or sell the property itself.  The person receiving the right to use land could grow and sell crops or maintain livestock, for example.  After a period of years or the death of the beneficiary, the usufruct would end, and use of the land would revert to the property owner.

The medieval church adapted the Roman concept of usufruct for charitable purposes. One of the most important and influential examples of gifts that involve payments back to a donor for life with a surplus amount (residuum) for charitable purposes dates to the sixth century.  Life-income gifts were encouraged in the rules of the monastic communities founded by Saint Benedict of Nursia (480–543). Benedictine monks encouraged wealthy parents to help prepare their sons and daughters for entering religious communities by giving property to the church rather than to their children.

While the monks preferred gifts with no strings attached, they acknowledged that some parents were unable or unwilling to make valuable gifts unless they received an assurance of cash payments from the religious community.  Benedict’s Rule 59 encouraged parents to make gifts in exchange for lifelong income:

[if parents] wish to gain merit by offering some alms to the monastery, they may make a formal donation of the property they want to give to the monastery. If they wish, they may reserve the income for themselves.

Benedict’s Latin sentence ends in a very important word:

Vel certe si hoc facere noluerint et aliquid offerre volunt in eleemosynam monasterio donationem, reservato sibi, si ita voluerint, usufructu . [my emphasis] 9

This is a mirror image of the original Roman idea of a usufruct, since ownership of the property itself was transferred to the Benedictines, and the income generated by the property (its fruits) was retained by the donors during their lives. Though the transferred property was owned by the Benedictines and not held in trust, there is a fiduciary relationship that is not distant from a trustee.

The idea of making life-income gifts to Benedictine communities through modified Roman usufructs spread throughout the Mediterranean world in the 6th century.  The Rule of St. Benedict , including its encouragement of life-income gifts, remains in wide use today.

An Islamic charitable endowment called a waqf was documented in the year 876. Some scholars speculate that the waqf may have influenced English trusts. For more information see notes below. 10

Pioneering legal historians Sir Frederick Pollock and Frederic William Maitland traced the practice of giving land to a clergyman “for the use of the church” to an ancient period “far before the Norman Conquest” in 1066. 11 As early as the year 825, Maitland “found evidence of conveyances to bishops to the use of churches and monasteries.” 12

During the Crusades (1095-1291), an English warrior might travel to distant countries and convey title to a trusted friend to safeguard the ownership of land, buildings, and other property, while providing support for the warrior’s wife and children until his return. Devout, wealthy donors could entrust gifts of land or money to a fiduciary with the power to direct income or principal to a religious institution’s chapel, library, or hospital. Trusts were enforceable under the church’s Canon Law, and later in Chancery Court. 13

Charitable Trusts were Popularized by Franciscans in the 1200s

The earliest large-scale application of a recognizable trust arrangement came about through Franciscan missionaries. Fifteen years after the founding of their order in Italy by St. Francis of Assisi, nine Franciscan friars arrived in Dover, England, on September 10, 1224. Barefooted, they walked 16 miles to the city of Canterbury.  Sympathetic donors wished to provide the friars with living quarters, a chapel, and land for farming, but strict Franciscan vows of poverty were a challenge, as described by Frederic Maitland:

The rule of their order prescribes the most perfect poverty: they are not to have any wealth at all.  They differ from monks.  The individual monks can own nothing, but a community of monks, an abbey, a priory, may own land and will often be very rich.  On the other hand, friars’ priories are not to have property either individually or collectively.  Still, despite this high ideal, it becomes plain that they must have at least some dormitory to sleep in.  They have come as missionaries to the towns.  The device is adopted of having land conveyed to the borough community to the use of the friars . . .  Very soon in various towns in England a good deal of land is held thus. 14

The creative use of trusts for the Franciscans was widely imitated.  In 1225 a wealthy London merchant arranged for Franciscans in London to use land.  A house was constructed, for which King Henry III sent timber from Windsor forest.  Another contingent of Franciscans moved to the university town of Oxford, where they received a house and garden.  All these properties were owned by trusts managed by cities for the use of the friars.

Between 1225-1230 at least 13 Franciscan communities were founded under similar trust arrangements in places such as Bristol, Cambridge, Lincoln, Salisbury, and York. For the next several hundred years, while maintaining their vows of poverty, the Franciscans received gifts through charitable trusts. These gifts were most often given by subscription (annual pledge payments) by living donors. Substantial trust additions came through bequests.

The Black Plague and the effects of poverty diminished the population of the Franciscans in England.  By the time of the Dissolution of the monasteries in 1538 and the dismissal of the friars, all that remained of value in their trusts was the use of real estate, which was soon redirected to other purposes.

Charitable Trust Discoveries and the Statute of Charitable Uses (1601)

Trusts for the benefit of the church or for the poor were known as charitable “uses”: title was held in a trust, while the fruits of the trust property were used by a beneficiary. In modern law, what was called a use we now call a trust.

Trusts became quite popular in France and England during the Renaissance.  By the time of Shakespeare and Queen Elizabeth, English donors had created thousands of charitable trusts.

The extent of these trusts was documented in a massive research project begun in 1818, when a commission was charged with recording the history, development, donors, purposes, and assets of the country’s existing charitable trusts:

It was in the nineteenth century, however, that the first detailed general surveys of English and Welsh charities were made. In August 1818, amidst revived interest in the more effective utilization of charitable funds, the Brougham Commission was appointed by parliament to examine the state of charitable trusts for educational purposes in England. With the renewal and widening of its powers in the following year, it spent almost two decades investigating charitable trusts of all types in England and Wales … The establishment of charitable trusts, gifts or bequests made in perpetuity for specified charitable purposes, was common in England and Wales between the sixteenth and nineteenth centuries, and the Brougham Commission’s completed survey listed nearly 29,000.

Though their existence is well known, less generally appreciated is the wide range of their trustees’ activities and in particular the importance they assumed in the life of certain towns, especially during the eighteenth and nineteenth centuries. Most familiar amongst their functions is the extensive relief of poverty: many maintained almshouses and workhouses or relieved the needy by gifts in cash, clothing, blankets, fuel and bread; or by pensions and interest-free loans. Also manifest is the provision and maintenance of educational institutions such as grammar and charity schools, and the finance of schemes for apprenticing pauper children. Yet beyond these lay many other activities … 15

Records for many of the charitable trusts created before the 1500s had long since disappeared by the 1800s, but much evidence remained. The folio-sized reports on 29,000 charitable trusts compiled by the Brougham Commission researchers filled 32 large volumes.

There were so many charitable trusts in England in the 1500s, and so many clear abuses of them, that an influential Statute of Charitable Uses was enacted by Parliament in 1601 to prevent self-dealing. The Preamble to the statute listed many of the purposes that promote the general welfare. The body of the statute provided a review process to prevent the unacceptable use of trust assets for personal benefits.

Here are the first three paragraphs:

The Statute of Charitable Uses: An Act to Redress the Misemployment of Lands, Goods,  Stocks, and Money Heretofore Given to Charitable Uses

Whereas lands, tenements, rents, annuities, profits, inheritances, goods, chattels, money, and stocks of money have been heretofore given limited appointed and assigned, as well by the Queen’s most excellent majesty and her noble progenitors, as by sundry other well disposed persons.

Some for relief of aged, impotent, and poor people, some for maintenance of sick and maimed soldiers and marines, schools of learning, free schools, and scholars in universities, some for repair of bridges, ports, havens, causeways, churches, seabanks, and highways, some for education and preferment of orphans, some for or towards relief stock or maintenance for houses of correction, some for marriages of poor maids, some for support, aid and help of young tradesmen, handicraftsmen, and persons decayed, and others for relief or redemption of prisoners or captives, and for aid or ease of any poor inhabitant concerning payment of Fifteens [a tax], setting out of soldiers and other taxes.

Which lands, tenements, rents, annuities, profits, inheritances, goods, chattels, money, and stocks of money nevertheless have not been employed according to the charitable intents of the givers and founders thereof, by reason of fraudulent breeches of trust and negligence in those that should pay, deliver, and employ the same. 16

After listing approved activities (such as “relief of aged, impotent and poor people”) that became defined as charitable purposes in the laws of Great Britain and the United States, the Preamble pointed out typical abuses by trustees, observing that some charitable trust assets:

… have not been employed according to the charitable intent of the givers and founders thereof, by reason of frauds, breaches of trust, and negligence in those that should pay, deliver and employ the same.

W.K. Jordan noted that the Statute gave donors confidence in the legal foundations of their gift arrangements, and that gifts would be used as donors intended:

The great Elizabethan statute of charitable trusts was notable, then, not because it created charitable uses, but rather because it codified a body of law badly wanting classical statement and because it vastly stimulated constructive and well considered charitable giving by lending full and most formidable protection to the aspirations of donors. 17

The identification of tax-exempt charitable organizations in section 501©(3) of the U.S. Internal Revenue Code is derived from the Elizabethan statute.  Robert Bremner begins his useful list of important dates in American philanthropy with this 1601 statute, and it is the first document contained in Making the Nonprofit Sector in the United States: A Reader. 18

Note also the range of financial and noncash assets given through trusts: “lands, tenements, rents, annuities, profits, inheritances, goods, chattels, money, and stocks of money.” People in British-run American colonies brought with them a tradition of giving whatever they owned. Like today, most family wealth was not held in the form of cash. [See my article Surprisingly Complex Non-Cash Gifts .]

Historian Joseph Smith recorded an early American trust (though not a trust with a charitable purpose) created in 1641 in western Massachusetts by “the widdow Horton” to provide trust income and principal for the support and education of her two sons. By arranging a trust, Ms. Horton controlled the use of her property after her wedding to benefit her sons by a prior marriage. 19

While the purpose of the Elizabethan statute in 1601 was to reform longstanding practices, its intent was obscured over two centuries. After 1800, the meaning of the statute was misunderstood by American jurists and legislators, who assumed that the legal authority for creating charitable trusts had been provided by the statute, rather than by the long experience of donors and precedents embodied in common law.

As recounted in the Introduction of this article, it took 50 years for historical proof to change the course of the American law of charitable trusts. In its 1844 decision Vidal v. Girard’s Executors the U.S. Supreme Court acknowledged that legal historians working with the Brougham Commission had uncovered documentation for many charitable trusts that predated the 1601 statute. The court ruled that charitable trusts were valid under common law in the U.S., even in states that had revoked the Statute of Charitable Uses .

Research Needed on Early American Charitable Remainder Trusts

Until the Tax Reform Act of 1969 compelled the use of unitrust and annuity trust forms of payments, charitable remainder trusts in the U.S. were called life income trusts, because the trusts paid out the actual income earned by the trust principal.

For example, in 1779 Eleazar Wheelock, founder and first president of Dartmouth College, included a life income trust in his will to provide income to his wife and son. He directed that the trust remainder should endow a fund to support the college president or a professor:

I have disposed of for that purpose to the amount of upwards of a thousand pounds lawful money, fifty pounds of the interest of which I devote as above said to the support of my said son Ralph as above said, the rest of said interest whatever it may be, I give to be improved towards the support of his mother during her life as long as she shall have occasion for it for her own support, and when they, my said wife and my said son Ralph shall be by any means either by death or any favourable circumstances in life in no necessity thereof for their support, I give and bequeath the whole debt, that now is or shall be due to me from the school both principal and interest at my decease to the only use and benefit of said school forever to be improved at the discretion and by the direction of the honourable corporation towards the support of the President or a professor as they shall judge most necessary or convenient. 20

Life income trusts were administered by banks or trust firms whose charter empowered them to do so until 1828, when the Chancery Court of New York State approved a life income trust created in the will of Nicholas Anderson to be administered by St. George’s Episcopal Church, incorporated in lower Manhattan. 21

Anderson bequeathed $4,000 in trust for the church to invest and to pay the income to his housekeeper for her life, with the remainder to become an endowed fund of the church.  The church invested the trust principal in municipal bonds and mortgages that paid the housekeeper the trust income of “at least 6% per year.”

Lawrence Friedman discusses a charitable life income trust contest in the case of Harvard College v. Amory (1830), 22 in which the Supreme Court of Massachusetts approved the “prudent investor” rule that allows trustees freedom in investing trust assets as “men of prudence, discretion and intelligence manage their own affairs.” Friedman observed that this case encouraged the rise of private, professional trustees, but does not comment on the fact that the donor’s wife received payments from the trust during her life, with the remainder distributed to Harvard and Massachusetts General Hospital.

The American Bible Society has documented several life income trusts created in the mid-1800s. Aware of the historical importance of these gifts, in 1964, Eric M. North, general secretary of the American Bible Society, wrote an account of its “Annuity and Trust Agreements” from 1831 to 1848. He and his staff combed through minutes, reports, and financial records to document the gifts as meticulously as possible. Many of the records had already been lost. 23

The common practice of adding a trust power that provides a person with income for life or a number of years, with the remainder going towards a charitable purpose, has been explored in great detail by modern writers, but was unremarkable to American legal historians until the 20 th century.

For example, the sole reason that an influential reference book on trust law published in 1862 gave two examples of trusts that provided life income to surviving family members was to analyze a contest over the trust remainders. 24 A 938-page text on trust law published in 1872 does not mention life income provisions with a charitable remainder. 25

This gap in documentation for the history of charitable life income trusts before the 20 th century is challenging. It would be reasonable to assume that early American settlers created charitable trusts as their ancestors had done in their countries of origin. Evidence of charitable trusts from 1600-1800 is missing. In particular, life income powers are mentioned in 19 th century texts discussing charitable trusts (such as in the Anderson and Hart trust cases cited above), but trust agreements are rarely published.

In my experience, law firms and banks that created or administered personal charitable trusts before 1900 have not preserved those trust agreements in their archives, whether to protect the privacy of clients or simply to reduce the volume of paper files relating to terminated trusts. I am not aware of a systematic effort to search the archives of American nonprofit organizations for early charitable trust agreements.

I would be very pleased to learn of any examples of early charitable trust agreements: [email protected] .

1 See for example A Report of All Such English Statutes as Existed at the Time of the First Emigration of the People of Maryland, and Which by Experience Have Been Found Applicable to Their Local and Other Circumstances … and Lists of the Statutes Which Had Not Been Found Applicable to the Circumstances of the People (Annapolis: Printed by Jehu Chandler, 1811).

2 This is not the place for a longer explanation of policy debates as Americans  grappled with a host of weighty questions, such as the proper division of responsibilities for the general welfare between independent, private charity and legally-mandated public spending. These debates have received much scholarly attention. See for example Lawrence Meir Friedman, A History of American Law , 4 th edition (Oxford: Oxford University Press, 2019); Howard S. Miller, The Legal Foundations of American Philanthropy, 1776-1844 (Madison, WI: Historical Society of Wisconsin, 1961); Irvin G. Wyllie, “The Search for an American Law of Charity, 1776-1844,” Mississippi Valley Historical Review 46:203-221 (September 1959); A.G. Roeber, “The Long Road to Vidal: Charity Law and State Formation in Early America,” The Many Legalities of Early America , ed. by Christopher L. Tomlins and Bruce H. Mann (Chapel Hill and London: University of North Carolina Press, 2001); and Carl Zollman, American Law of Charities (Milwaukee: Bruce Publishing Company, 1924.

3 See Cases and Text on the Law of Trusts by George Gleason Bogert et al (Westbury, NY: The Foundation Press, Inc., 1991), p. 200. The chapter on “Charitable Trusts” begins by discussing the Supreme Court’s decision in Trustees of Philadelphia Baptist Association v. Hart’s Executors, 17 U.S. (4 Wheat) 1, 4 L.Ed. 499 (1819): “In the United States, an 1819 John Marshall opinion invalidated a charitable disposition on the ground that the doctrine was statutory and the Statute of Charitable Uses had not been enacted or adopted in Virginia.”

4 Calendar of the Proceedings in Chancery , discussed below.

5 Magill v. Brown , 16 F. Casa. 408 (C.C.E.D. Pa. 1833)(No. 8954).

6 Bogert, Cases and Texts on the Law of Trusts , p. 200: the Supreme Court decision in Vidal v. Girard’s Executors, 43 U.S. (2 How.) 127, 11 L.Ed. 205 (1844), “which restored the law of charitable trusts to its common law origins, gave substantial impetus to the validity and use of charitable trusts in the United States.”  For an overview see “The Enforcement of Charitable Trusts in America: A History of Evolving Social Attitudes” by S.F.D., Jr., Virginia Law Review , Vol. 54, No. 3 (April 1968), pp. 436-465. Developments in the laws restricting charitable trusts in New York were particularly complicated. For a masterful analysis see Stanley N. Katz et al, “Legal Change and Legal Autonomy: Charitable Trusts in New York, 1777–1893” ( Law and History Review , Vol. 3, 1985).

7 “Preface” to Itinera Fiduciae: Trust and Treuhand in Historical Perspective, ed. by Richard Helmholz and Reinhard Zimmerman (Berlin: Duncker & Humblot, 1998), p. 5.

8 “The idea that there was a law of trusts in England, rather than separate legal entities – executors, feoffees to uses, custodians of charities, and guardians of minors – emerged slowly.  It was only in the 19th century that treatises devoted to the trust as a separate body of law began to be written.  Only then did what now appear to be basic theoretical questions, such as determining the exact nature of the beneficiary’s interest in a trust, need finally to be confronted.” Helmholz and Zimmerman, “Views of Trust and Treuhand: An Introduction,” Itinera Fiduciae, p. 41.

9 T.G. Kardong, Benedict’s Rule: A Translation and Commentary (Collegeville, MN: Liturgical Press, 1996), 485-486.

10 Wikipedia entry downloaded 8/12/2019:

A waqf (Arabic: وَقْف‎; [ˈwɑqf]), also known as hubous (حُبوس)[1] or mortmain property, is an inalienable charitable endowment under Islamic law, which typically involves donating a building, plot of land or other assets for Muslim religious or charitable purposes with no intention of reclaiming the assets.The donated assets may be held by a charitable trust. The person making such dedication is known as waqif, a donor. In Ottoman Turkish law, and later under the British Mandate of Palestine, the waqf was defined as usufruct State land (or property) of which the State revenues are assured to pious foundations. Although based on several hadiths and presenting elements similar to practices from pre-Islamic cultures, it seems that the specific full-fledged Islamic legal form of endowment called waqf dates from the 9th century AD …

The waqf in Islamic law, which developed in the medieval Islamic world from the 7th to 9th centuries, bears a notable resemblance to the English trust law. Every waqf was required to have a waqif (founder), mutawillis (trustee), qadi (judge) and beneficiaries. Under both a waqf and a trust, “property is reserved, and its usufruct appropriated, for the benefit of specific individuals, or for a general charitable purpose; the corpus becomes inalienable; estates for life in favor of successive beneficiaries can be created” and “without regard to the law of inheritance or the rights of the heirs; and continuity is secured by the successive appointment of trustees or mutawillis.”

The only significant distinction between the Islamic waqf and English trust was “the express or implied reversion of the waqf to charitable purposes when its specific object has ceased to exist”, though this difference only applied to the waqf ahli (Islamic family trust) rather than the waqf khairi (devoted to a charitable purpose from its inception). Another difference was the English vesting of “legal estate” over the trust property in the trustee, though the “trustee was still bound to administer that property for the benefit of the beneficiaries.” In this sense, the “role of the English trustee therefore does not differ significantly from that of the mutawalli.”

Personal trust law developed in England at the time of the Crusades, during the 12th and 13th centuries. The Court of Chancery, under the principles of equity, enforced the rights of absentee Crusaders who had made temporary assignments of their lands to caretakers. It has been speculated that this development may have been influenced by the waqf institutions in the Middle East.  [end Wikipedia cite]

See Avisheh Avini, “The Origins of the Modern English Trust Revisited,” Tulane Law Review, Vol. 10 (1995-1996), pp. 1139-1163, and Monica M. Gaudiosi, “The Influence of the Islamic Law of Waqf on the Development of the Trust in England: The Case of Merton College,” University of Pennsylvania Law Review, 136 (4), April 1988, pp. 1231–1261.

11 Sir Frederick Pollock, The History of English Law before the Time of Edward I, vol. 2 (Cambridge: Cambridge University Press, 1898), page 229; see esp. the extended discussion of the history of trusts and uses on pp. 226-39.

12 F.W. Maitland, Equity: A Course of Lectures, revised by John Brunyate (Cambridge: University Press, 1936; reprinted 1969), page 25. Other pioneering works on the history of English charitable trusts include J.M.W. Bean, The Decline of English Feudalism 1215-1540 (Manchester, UK: Manchester University Press, 1968); W.K. Jordan, Philanthropy in England 1480-1660 (London: George Allen & Unwin Ltd, 1959); Gareth Jones, History of the Law of Charity 1532-1827 (Cambridge, UK: Cambridge University Press, 1969); and David Owen, English Philanthropy 1660-1960 (Cambridge, MA: The Belknap Press of Harvard University Press, 1964). There is no book documenting the long history of charitable remainder trusts. The best modern history of charitable trusts is Helmholz and Zimmerman, Itinera Fiduciae  (1998). Some standard legal texts on trusts include A.W. Scott, The Law of Trusts, 4th ed. (Boston: Little, Brown, 1987); American Law Institute, Restatement of the Law Third, Trusts. Vol. 1 (Philadelphia: American Law Institute, 2003); and A.M. Hess, Bogert Trusts and Trustees, Rev. 2nd and 3nd ed. (Eagan, MN: Thomson Reuters, 1980-2017).

13 Richard Helmholz, “Trusts in the English Ecclesiastical Courts 1300-1640,” Itinera Fiduciae, 153-172.

14 Maitland, Equity p. 25.

15 Kevin Grady, “The Records of the Charity Commissions: A Source for Urban History,” Urban History Yearbook, Vol. 9 (1982), pp. 31-37. Published by Cambridge University Press, available at https://www.jstor.org/stable/44610919 . Also see Richard Tompson, The Charity Commission and the Age of Reform (London and Henley: Routledge & Kegan Paul, 1979).

16 “The Statute of Charitable Uses, 1601,” published in Making the Nonprofit Sector in the United States: A Reader, edited with an introduction by David C. Hammack (Bloomington: Indiana University Press, 1998), p. 6.

17 W.K. Jordan, Philanthropy in England 1480-1660, p. 112.

18 R.H. Bremner, American Philanthropy (Chicago: University of Chicago Press, 1960; revised 1988), p. 217. See above cite for Hammack, Making the Nonprofit Sector in the United States: A Reader.

19 Joseph H. Smith, ed., Colonial Justice in Western Massachusetts, 1639-1702 (Cambridge: Harvard University Press, 1961), p. 210. Discussed by Friedman, A History of American Law, p. 31.

20 James Dow McCallum, Eleazar Wheelock: Founder of Dartmouth College (Hanover, NH: Dartmouth College Publications, 1969), p. 210.

21 In the Matter of Howe, etc., Executor, and Anderson, Deceased, 1828.

22 Harvard College v. Amory, 26 Mass. (9 Pick.) 446 (1830), discussed in Lawrence Meir Friedman, A History of American Law, 4th ed. (Oxford: Oxford University Press, 2019), pp. 235-236.

23 See E.M. North, “Annuity and Trust Agreements.” Sec. G of ABS Historical Essay 20, part 2, Financial Administration 1861–1900 (New York: American Bible Society, 1964); “Annuities and Special Agreements.” Sec. H of ABS Historical Essay 20, part 3, Financial Administration 1861–1900 (New York: American Bible Society, 1966); and ABS Historical Essay 17, part 3, Financial Administration 1861–1900 (New York: American Bible Society, 1966).

24 Joel Tiffany and E.F. Bullard, The Law of Trusts and Trustees, as Administered in England and America Embracing the Common Law (Albany, NY: W.C. Little, 1862), pp. 264-266 and 337-339.

25 Jairus Ware Perry, A Treatise on the Law of Trusts and Trustees (Boston: Little, Brown, 1872).

Share this:

Leave a comment cancel reply.

• Already have a WordPress.com account? Log in now.
• Subscribe Subscribed
• Copy shortlink
• Report this content
• View post in Reader
• Manage subscriptions
• Collapse this bar

You must be logged in to post a comment.

• Register or Log In
• 0) { document.location='/search/'+document.getElementById('quicksearch').value.trim().toLowerCase(); }">

Equity & Trusts Concentrate 7e Student Resources is no longer available and it was replaced by Equity and Trusts Concentrate 8e .

Chapter 6 Outline answers to essay questions

Critically discuss the impact of the Charities Act 2011 on the public benefit requirement.

Introduction : to answer this question, contrast the previous legal position with the changes contained in the Charities Act 2011 . One of the aims of the Charities Act 2011 is to make charities more accountable for the benefits they receive. This aim is clearly seen in the reforms made to the public benefit requirement.

Previous legal position : originally, charities for the relief of poverty and the advancement of education and religion benefited from a presumption of public benefit.

Discuss how this presumption assisted some 'borderline' trusts to be deemed charitable, e.g. trusts for poor relations (eg Re Segelman ) and trusts for religions with an extremely small following (see, for example, Re Watson [1973] 1 WLR 1472).

Discuss the impact of the Charities Act 2011 : s 4(2) Charities Act 2011 removes the presumption of public benefit – all charities must now be able to provide evidence that they are for the public benefit. It is arguable that the removal of the presumption itself will have little practical effect on how charitable status is to be assessed.

‘Poor relations’: while the Charity Commission suggested that 'poor relations' trusts will be subject to closer scrutiny to ensure they are for the public benefit, the decision in Attorney-General v Charity Commission for England and Wales and others [2012] suggests that public benefit will still be generously assessed for charities which seek to relieve poverty.

Public schools: discuss whether the Act will affect the charitable status of public schools. Early indications that the impact of the Act would be limited appear to have been confirmed by the decision of Independent Schools Council and others v Charity Commission for England and Wales [2011]. Discuss how the Upper Tribunal confirmed that the Charity Commission Guidance on the public benefit requirement took too restrictive an approach to how public benefit was to be assessed in relation to fee-charging charities, such as public schools and hospitals. This decision also suggested that the presumption removed by s 4(2) never really had the force of a ‘true’ legal presumption and operated more as a simple ‘predisposition’ for judges considering the public benefit of potentially charitable trusts (see paras. 54-71 and particularly paras. 67-71 of the decision for further detail).

Consider whether the reforms introduced by the Charities Act 2011 have resolved the problems of 'public benefit' – are there issues which should have been addressed, e.g. should the Act have included a statutory definition of 'public benefit'? This area is an interesting example of how the political agenda which seemed to motivate the reforms to public benefit was not sufficiently supported by the terms of the Act itself (for example, through the retention of the previous common law by s 4(3) Charities Act 2011 ). Attempts by the Charity Commission to address the spirit of these reforms, rather than their letter, have been hotly contested.

An enhanced regulatory role for the Charity Commission : the Charities Act 2011 charges the Charity Commission with ensuring the accountability of charities and with providing guidance to charities on how they may comply with the public benefit requirement (see, now, ss 14-17 Charities Act 2011 ). Arguably, it is the Charity Commission’s attempts to embrace this enhanced role that has led to recent litigation and debate on this area. A number of recent charitable scandals have also led to criticisms of the Charity Commission’s use of its regulatory powers. Researching the Charity Commission’s role and operation will add further depth to your essay by demonstrating an understanding of how charities are regulated - see, for example, the application for charitable status of the Preston Down Trust in relation to a charity for the advancement of religion.

Conclusion : drawing together your arguments, conclude on the extent to which the Charities Act 2011 has altered the public benefit requirement.

Select your Country

Law Notes Trusts and Equity Notes

Charitable Purpose Trusts Notes

Updated charitable purpose trusts notes.

Trusts and Equity

Equity notes fully updated for recent exams at Oxford and Cambridge. These notes cover all the LLB trusts cases and so are perfect for anyone doing an LLB in the UK or a great supplement for those doing LLBs abroad, whether that be in Ireland, Hong Kong or Malaysia (University of London).

These were the best Equity and Trusts Law notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through dozens of LLB samples from outstanding law students with the highest re...

The following is a more accessible plain text extract of the PDF sample above, taken from our Trusts and Equity Notes . Due to the challenges of extracting text from PDFs, it will have odd formatting:

Table of Contents

The beneficiary principle 2

Gardner, Introduction to the Law of Trusts 3

Non-charitable purpose trusts 4

Hayton, ‘Developing the Obligation Characteristic of the Trust’ (2001) 117 LQR 96 4

Charitable purpose trusts 4

Charities Act 2011 ss 1-5 7

Charity Commission, Analysis of the Law relating to Public Benefit (September 2013) 7

I - THE STRUCTURE OF ‘CHARITY’ 8

Independent Schools Council v Charity Commission [2012] 1 All ER 127, [41]-[92] (Upper Tribunal) 8

II – Heads of Charity ( section 3 CA 2011 ) 9

A - ‘RELIEF OF Poverty’ 9

1 – Charitable purpose 9

Independent Schools Council [2012] 1 All ER 127 (meaning of “poverty”) 9

Re Coulthurst [1951] Ch. 661 9

Re Niyazi [1978] 1 W.L.R. 910 (Megarry VC) 9

2 – Public Benefit 9

Re Segelman [1995] 3 All E.R. 676, 687-694 (poor relations – open class upon testator’s death) 9

Dingle v. Turner [1972] A.C. 601; [1972] 1 All ER 878 (poor employees – indistinguishable from poor relations) 10

Independent Schools Council [2012] 1 All ER 127 (meaning of “poverty”) 10

B - ‘ADVANCEMENT OF Education’ 10

1 – Charitable Purpose 10

*Incorporated Council of Law Reporting v. A-G [1972] Ch. 73 (research) 10

*Re Hopkin’s Will Trusts [1965] Ch. 669; [1964] 3 All ER 46 (research) 10

2 – Public Benefit 11

*Oppenheim v. Tobacco Securities Trusts Ltd [1951] A.C. 297; [1951] 1 All ER 31 (applies the personal nexus test) 11

III – The Public Benefit Requirement ( section 4 CA 2011 ) 11

Independent Schools Council [2012] 1 All ER 127 (pre-2006 state of the law regarding public benefit test) 12

A - ‘BENEFIT’ 12

National Anti-Vivisection Society v IRC [1948] AC 31 12

Independent Schools Council [2012] 1 All ER 127 (indirect and wider benefit can be relevant to public benefit test) 13

Gilmour v Coats [1949] AC 426 13

B – Not political objectives 14

Stevens and Feldman (1997) 14

I. Maxims of Equity

Equity is discretionary

Though now governed by principles, they are not set in stone and remedies are awarded at the discretion of the court, emphasizing fairness

Schmidt v Rosewood – beneficiaries of a trust have no right to inspect trust documents but court has discretion to allow them to do so

Equity is triggered by unconscionability

Those who seek equity must do equity

Equitable remedies won’t be granted if C doesn’t intend to treat D fairly

Chappell v Times – employees denied remedy because they refused to sign an undertaking not to strike in the future

Those who come to equity must come with clean hands

Remedies will not be granted to C who has acted improperly

Dering v Earl of Winchelsea – legal impropriety only (not moral); conduct must relate to relief sought

Equity treats as done that which ought to be done

If A has a specifically enforceable contractual obligation to transfer property to B, Equity will regard it as transferred

Equity protects the weak and vulnerable

Equity is cynical

In certain cases Equity will mistrust gifts and hold that donee is holding them on a trust on behalf of donor

Equity is imaginative

Equity follows the law

Equity recognizes Common Law principles but doesn’t apply them slavishly or always

Equity looks to substance rather than form

Equity will not assist a volunteer

Equity assists the diligent

C may be denied a remedy due to lapse in time

Equity is equality

If there are multiple equitable interests, they are treated equally

Equity acts in personam

Rights destroyed when bona fide acquirer acquires the property (no rights in rem )

II. Rule against perpetuities

Purpose trusts and gifts to unincorporated associations can infringe the perpetuity period and the latter may also raise problems of future vesting. The rule against perpetuities was reformed by the Perpetuities and Accumulations Act 2009 (a product of the 1998 LRC report). It still applies to trusts but abolishes the rule against perpetuities in most real property contexts. The perpetuity period is now simply 125 years (s.5).

A - Rule against remoteness of vesting

Property must be vested in individuals within a recognized period of time (the perpetuity period), so as to prevent wealth being locked away indefinitely.

B - Perpetuity Period

Common Law: Life in being plus 25 years

Reformed by Perpetuities and Accumulations Act 1964: possible to specify a period not exceeding 80 years

Reformed by Perpetuities and Accumulations Act 2009: 125 years even if trust specifies a different period

C - Wait-and-See Rule

Under common law: if at the outset property may not be vested within the perpetuity period it is considered void

Under the Perpetuities and Accumulation Act 2009: if at any one time it possible that property will not vest during perpetuity period it is not to be treated as void until it is certain that it will not vest.

D - Duration of Purpose Trusts

Charitable purpose-trusts: since these are vested in the public there is an interest in them lasting forever so Act does not apply

Non-charitable purpose-trusts: Act still doesn’t apply but since no public interest these are caught by common law perpetuity rules

The beneficiary principle

I. Principle

Property must be held on trust for identified beneficiaries or objects, or it is void, so that the court has people in whose favor it can decree performance. A trust for purposes will not be valid.

II. Example Cases

Morice v Bishop of Durham – a trust bequeathing “such objects of benevolence and liberality as the Bishop of Durham in his own discretion shall most approve of” was invalid as there were no ascertainable beneficiaries

Sir William Grant: “There must be somebody, in whose favour the Court can decree performance”

III. Exceptions

Charitable trusts – valid though trust for purposes (does not undermine rationale because Charity Commision and AG enforce them

Express trusts – though appearing to be trusts for purposes people can benefit indirectly, satisfying the requirement

Exceptionally non-charitable purpose trusts – old cases that are likely to be...

Buy the full version of these notes or essay plans and more in our Trusts and Equity Notes .

• Oxbridge Notes' prizewinning note marketplace has been servingstudents since 2010 with premium study materials
• Reap the benefits of joined-up learning and earn higher grades, just like our 75,000+ happy customers.

Charitable Purpose Trusts

Need instant answers our ai exam tutor is here to help..

Ask questions 🙋 Get answers 📔 It's simple 👁️👄👁️

Our AI is educated by the highest scoring students across all subjects and schools. Join hundreds of your peers today.

More Trusts And Equity Samples

• Administrative Powers Of Trustees Notes
• Basic Concepts Of Equity And Trust Notes
• Beneficiary Principle Notes
• Breach Of Trust Notes
• Certainties Notes
• Certainties Trusts Vs. Powers Notes
• Charitable Trusts Notes
• Constitution And Formalities Notes
• Constitution Notes
• Constitution Long Notes
• Constitution Of Trusts Notes
• Constitution Short Notes
• Constructive Trusts Notes
• Constructive Trusts, Unjust Enrichment, Tracing Notes
• Dishonest Assistance, Unjust Enrichment Notes
• Dispositive Powers, Standing And Enforcement, Certainty Notes
• Duties And Interests Notes
• Equity And Trust Condensed Revision Tables Notes
• Fiduciaries Notes
• Fiduciary Liability And Tracing Notes
• Formalities Constitution Of Trusts Incompletedly Constituted Trusts Notes
• Formalities Notes
• Iii. Trustee Duties And Compensatory Liability Notes
• I. Introduction Elements Of An Express Trust Notes
• Ii. Rules Governing Trusts Notes
• Implied Or Resulting Trusts Notes
• Implied Trusts Notes
• Introduction Elements Of An Express Trust Notes
• Iv. The Law Of Fiduciaries Notes
• Nature Of A Beneficial Interest Notes
• Nature Of Beneficiary Interest Essat Notes
• Possible Objects Of Trusts Purpose Quistclose Trusts Notes
• Proprietary Remedies For Breach Of Trust Notes
• Purpose Trusts Notes
• Quistclose Trusts Notes
• Quitsclose Trusts Notes
• Remedies For Breach Tracing And Defences Notes
• Resulting Trusts And Unincorporated Associations Notes
• Resulting Trusts Notes
• Rules Governing Trusts Notes
• Secret Trusts Notes
• Secret Trusts, Testamentary Gifts Not Complying With The Wills Act Notes
• The Beneficiary Principle And Non Charitable Purpose Trusts Notes
• The Law Of Fiduciaries Notes
• The Quistclose Trust Notes
• The Three Certainties Notes
• Third Parties Knowing Receipt Dishonest Assistance Trustees De Son Tort Notes
• Third Party Liability In Breach Of Fiduciary Duties Notes
• Third Party Personal Liabilities Notes
• Three Certainties Notes
• Tracing Notes
• Trust Administration Notes
• Trustee Duties And Compensatory Liability Notes
• Trustees Duties Notes
• Trust Formalities Notes
• Trust Remedies Including Tracing Knowing Receipt Trust Dutiies And Powers And Equitable Damages Notes
• Trusts For Purposes Notes
• Trusts Of The Family Home Notes
• Trusts Revision Summaries Notes
• Types Of Trusts And 3 Certainties Notes
• Unicorporated Associataions Notes
• Unincorporated Associations Notes
• Unincorporated Associations Framework Notes
• Vi. Proprietary Remedies For Breach Of Trust Notes
• V. Third Party Personal Liabilities Notes
• What Is A Trust Notes

Introduction and Charitable Purposes

Subjects | law notes | trusts law, subscribe on youtube.

I help people navigate their law degrees

🎓 Simple and digestible information on studying law effectively.

🎬 One new video every week (I accept requests and reply to everything!)

📚 FREE courses, content, and other exciting giveaways.

Legal Definition of Charity

Statutory codification.

⇒ Historically, the legal definition of charity was the product of common law → this recently changed with the introduction of the Charities Act 2006 (in force 2008)

⇒ So since the Charities Act 2006 there has been a comprehensive statutory definition of charity → it effectively codified the common law definition

⇒ The Charities Act 2006 has now been consolidated in the Charities Act 2011

• So, the 2011 act is a consolidating statute → it is one which repealed a number of other statutes relating to charity law and brought them together in one single, overarching, piece of legislation

Charities Act 2011 sections 1-2

⇒ The legal definition of ‘charity’ is contained in the Charities Act sections 1-2

⇒ Charities Act s.1 defines a ‘charity’ as an “institution established for charitable purposes only”

⇒ Charities Act s.2 defines a ‘charitable purpose’ as one which “falls within s. 3(1) and is for the public benefit”

Charities as “institutions”

⇒ A charity is an “institution” established for exclusively charitable purposes (CA s.1)

⇒ “Institution” is defined in s.9 as “an institution whether incorporated or not, and includes a trust or undertaking”

• s.9 provides a fairly broad definition of an institution, to embrace unincorporated associations (see topic notes), incorporated organisations (i.e. companies) and also, explicitly, to embrace a trust → So section 9 of the Charities Act is telling us a trust counts as an institution i.e. a trust can be a legal charity under s.1 of the CA 2011

⇒ The focus of these notes is on charitable trusts

Special legal treatment

Special treatment applicable to all charitable institutions.

⇒ All charitable institutions benefit from tax reliefs and exemptions

• There is full exemption from income tax, corporation tax, capital gains, stamp duty, and partial exemption from VAT
• Gifts to charities are also afforded tax breaks via ‘Gift Aid’

⇒ General guidance for charity trustees provided by the Charity Commission via its website

• So the people administering a charity (charitable trustees) are given free advice by the Charity Commission, which helps to ensure they are properly run

⇒ The Charity Commission also provides individualised advice (Charities Act s.110)

• This advice is either generic (i.e. provided to all charity trustees by the charity commission website) or individualised (i.e. to particular charitable trustee)

⇒ Giving charitable instruments tax breaks and a public funded Charity Commission is at the expense of the State → the rationale for this lies in the fact that charities are institutions with purposes for the public benefit

Special treatment specific to charitable trusts

⇒ The certainty rules are more flexible for charitable trusts than private trusts

• So there is no requirement, as with other trusts, that the objects of the trust must be certain → thus, a trust for “charitable purposes” will be valid

⇒ A charitable trust will be validly created provided there is an intention to apply property for a charitable purpose

• If there is any doubt surrounding the charitable purpose the court or charity commission can specify its charitable purpose
• The purpose expressed must not be so vague and uncertain that the court could not control the application of the assets

THE BENEFICIARY PRINCIPLE:

⇒ Charitable trusts are exempt from the ‘beneficiary principle’ (i.e. the demand that a valid trust must have ascertainable beneficiaries)

• charitable trust is a purpose trust → they are not trusts for ascertainable beneficiaries, but rather they are trusts for broad brush purposes
• So, charitable trusts then present a direct challenge to the beneficiary principle

PERPETUITIES:

⇒ Charitable trusts are exempt from aspects of the rule against perpetuities

⇒ Charitable trusts are exempt from ‘the rule against inalienability’ (Chamberlayne v Brockett (1872)) i.e. a charitable trust, in principle, endures forever

⇒ Charitable trusts are subject to ‘the rule against remoteness of vesting’ (Perpetuities and Accumulations Act 2009, s.5)

• So this means that the charity’s interest in the property in question must vest in the charity within the perpetuity period i.e. property must vest within 125yrs

⇒ On the failure of a private trust any funds that remain will revert back to the settlor on a resulting trust, but charitable trusts are slightly different…

⇒ Any funds that remain on the failure of a charitable trust are applied to a similar/analogous charitable purpose → so they do not revert back to the settlor

PART 2: THE LIST OF CHARITABLE PURPOSES

The list of charitable purposes.

⇒ For a purpose to be a charitable purpose, for the purposes of s2 of the Charities Act, it must fall within one of the categories listed in s.3(1). It reads as follows:

⇒ CA s.3(1): “A purpose falls within this subsection if it falls within any of the following descriptions of purposes –

• 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…that may reasonably be regarded as analogous to, or within the spirit of, any purposes falling within any of paragraphs (a) to (l)…”

Historical backdrop to s3(1)

Charitable uses act 1601.

⇒ Foundations of s.3(1) lie in the Charitable Uses Act 1601 (i.e. the “Statute of Elizabeth”)

⇒ The Preamble to the 1601 Act listed a number of charitable purposes, which the 17th century judiciary then used in their determinations of charitable status

• So the judiciary used the list in the preamble in order to determine whether a purpose was charitable or not

The Art of Getting a First in Law - ONLY £4.99

FOOL-PROOF methods of obtaining top grades

SECRETS your professors won't tell you and your peers don't know

INSIDER TIPS and tricks so you can spend less time studying and land the perfect job

We work really hard to provide you with incredible law notes for free...

The proceeds of this eBook helps us to run the site and keep the service FREE!

Judicial development of the list

⇒ Over the next 300 years, the judiciary developed the list of charitable purposes by including purposes analogous to the purposes in the list

⇒ The Preamble influenced this development; a purpose was held charitable only if it fell within the Preamble expressly or by analogy

A Statutory List: s3(1)

⇒ The list of charitable purposes has now been placed on a statutory footing and is contained in the Charities Act s.3(1) (previously CA 2006 S.2(2))

⇒ Statutory articulation has made little difference to the contents of the list

⇒ But possible innovations are:

• 1) The addition of the “advancement of amateur sport” (s.3(1)(g))
• 2) The inclusion within the “advancement of religion” of “the advancement of a religion which does not involve belief in a god” (s.3(2)(a)(ii))

The prevention or relief of poverty s.3(1)(a)

Oor as distinct from destitute.

⇒ “Poor” does not equate to “destitute”; it embraces those who do not have access to the normal things in life that most people would take for granted

• Destitution is a poverty that is so extreme that one lacks the means to provide for oneself; Poor, therefore embraces those who do not have access to the normal things in life that most people would take for granted
• Mary Clark Homes Trustees v Anderson : someone is poor if he is in ‘genuinely straightened circumstances and unable to maintain a very modest standard of living for himself and persons dependent upon him’

⇒ ‘Poor’ for the purposes of s.3(1)(a) also includes those who suffer a merely temporary financial hardship caused by a sudden change in circumstance (Re Coulthurst [1951]; IRC v Oldham Training and Enterprise Council [1996])

• In Re Coulthurst [1951] , a fund was set up for a newly widowed women and the orphans of deceased bank offices. It was held that this purpose was charitable because the purpose relieved poverty under s3(1)(a) Charities Act
• So poverty embraces those who suffer only a temporary financial hardship caused by a sudden change of circumstance i.e. the death of a family member as in the case of Re Coulthurst
• IRC v Oldham Training [1996] , a trust for the unemployed in business was held charitable on the basis that it relieved poverty → So the unemployed were held to be poor on the grounds that they suffered a temporary financial hardship

Poor as distinct from working class

⇒ Poor and working class are not synonymous: one can be both working class and wealthy

⇒ A trust to provide dwellings for the working classes was refused charitable status in Re Sanders’ Will Trusts [1954]

• This was because there was no requirement the people who received dwellings had to be poor
• In Re Gwyon , money was left to provide boys in Hampshire with underwear. This purpose ws not for the prevention or relieve of poverty because there was no requirement the boys be poor

Advancement of Education s.3(1)(b)

Transmitting knowledge and ideas.

⇒ Education is not restricted to the teacher-pupil context; it has been broadly defined to encompass the transmission of knowledge and ideas

⇒ “[The advancement of education extends] to the improvement of a useful branch of human knowledge and its public dissemination (Buckley L.J. in Incorporated Council of Law Reporting for England and Wales v A-G [1972] )

• So the transmission of knowledge thus suffices to advance education

⇒ “[T]he concept of education is now wide enough to cover the intensive discussion process…designed to dent opinions and to cross-fertilise ideas” (Re Koeppler [1984])

• In Re Koeppler [1984] , the court saisaid the advancement includes the transmission of ideas too → money was left on trust for a centre dedicated to holding conferences on global issues, attended by high-profile individuals. This purposes did fall under advancing education

⇒ Education also encompasses research, provided both that: (i) it concerns a subject of study which is not manifestly futile; and (ii) the results are to be disseminated

⇒ “[I]n order to be charitable, research…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 [including] the formation of literary taste and appreciation.” (Wilberforce J in Re Hopkins [1965])

• In Re Hopkins [1965] , money had been settled for purpose of researching whether Shakespeare plays were actually written by Francis Bacon. It was held this was a purpose under s3(1)(b) as it was not manifestly futile and that on publication of the research the sum of knowledge would be improved

⇒ Re Shaw [1958] : a trust was established for the purpose of undertaking research to create a new alphabet that would be comprehensible to all. It was held that this was not charitable because it involved propaganda

⇒ In Re Dupree’s Deed Trusts, Vaisey J was uneasy about the limits to charitable education purposes. When validating a trust to provide funds for an annual chess tournament for young men under the age of 21, his Lordship sensed: “one is on rather a slippery slope. If chess, why not draughts? If draughts, why not bezique, and so on”

Advancement of religion s.3(1)(c)

A new, wider understanding of ‘religion’.

⇒ Prior to the Charities Act 2006 it was well-established in case law that ‘religion’ necessitates faith in, and worship of, a God (see Dillon J in Re South Place Ethical Society [1980])

⇒ This understanding of ‘religion’ has been altered by the Charities Acts: religion now expressly includes (i) a religion which involves belief in more than one god; and (ii) a religion which does not involve belief in a god (Charities Act s.3(2)(a))

Multiple gods; no god

⇒ The inclusion of religions involving belief in more than one god means that purposes advancing Hinduism fall squarely within s.3(1)(c)

• Although, note, that Hinduism was always accepted by the Charity Commission as constituting a religion for charity law purposes

⇒ The inclusion of religions which do not involve belief in a god means that purposes advancing Buddhism fall squarely within s.3(1)(c)

• There are some limits though to qualifying as a religion in the absence of a God
• In order to be a religion in the absence of a god there needs to be faith in, and worship of, a “supreme being, or divine or transcendental being or entity or spiritual principle.” (Charity Commission guidance)

Faith and worship

⇒ The requirements of “faith” and “worship” remain unchanged: “religion” still demands faith in, and worship of, a god/multiple gods/supreme being/principle

⇒ It has been held that “worship” must have some of the following characteristics:

• “Submission to the object worshipped, veneration of that object, praise, thanksgiving, prayer or intercession.” (R v Registrar General ex p Segerdal)
• Lack of ‘worship’ is reason why Scientology is not accepted as a charity: instead they engage in counselling (called auditing) and studying the works of Hubbard

A moral framework

⇒ A “religion” must promote a moral framework

⇒ The requirement of moral framework serves to explain the following decisions:

• i) Charity Commission rules that paganism is a religion (2010) as it promotes moral code: in particular, the preservation of ancient monuments
• ii) Charity Commission rules that Gnosticism is not a religion (2009)

Religion not ethics

⇒ The promotion of ethical principles does not advance religion ; religion concerns man’s relationship with god (or, in lieu of this, a supreme being, entity, or principle) while ethics concerns man’s relations with man → so ethics is not a requirement of s3(1)(c)

⇒ Re South Place Ethical Society [1980]: the purpose of studying and disseminating ethical principles was held not to advance religion (s3(1)(c)) i.e. so it was not a charitable purpose

⇒ To fall within CA s.3(1)(c) a purpose must advance religion

⇒ The advancement of religion is defined as taking positive steps to promote or spread religious belief ( United Grand Lodge of Ancient Free and Accepted Masons of England v Holborn Borough Council [1957] )

• In this case, freemasonary was held not to advance religion within s3(1)(c) → although it is a religion, its goals are not to advance the religion therefore its purposes cannot be charitable purposes under s3(1)(c)

⇒ Religion can be advanced by instruction/teaching; persuading unbelievers; religious services and pastoral or missionary work

Advancement of amateur sport s.3(1)(g)

The position before the charities act 2006.

⇒ Before the enactment of the Charities Act 2006 (now CA 2011) the advancement of amateur sport was not a charitable purpose in its own right

• This explains why the purpose of promoting yachting was not held to be a charitable purpose in Re Nottage 1885

⇒ Trusts to advance sport were, however, held charitable if they could be construed as advancing education

• Re Mariette 1915: there was a gift to provide Eton fives courts and squash rackets courts at Aldenham School. Eve J upheld this, on the principle that learning to play games at a boarding school was as important as learning from the books

⇒ The advancement of sport is now a charitable purpose in its own right (Charities Act s.3(1)(g))

‘Sport’ and ‘advancement’ defined

⇒ Sport is defined in the Charities Act s.3(2)(d) as “sports or games which promote health by involving physical or mental skill or exertion”

⇒ The definition encompasses games, such as chess, which involve mental skill

⇒ A purpose “advances” amateur sport if it either (i) provides facilities for sporting activity; or (ii) encourages participation in a sport

• So amateur sport must be advanced, just like religion had to be

Law Application Masterclass - ONLY £9.99

Learn how to effortlessly land vacation schemes, training contracts, and pupillages by making your law applications awesome. This eBook is constructed by lawyers and recruiters from the world's leading law firms and barristers' chambers.

✅ 60+ page eBook

✅ Research Methods, Success Secrets, Tips, Tricks, and more!

✅ Help keep Digestible Notes FREE

Digestible Notes was created with a simple objective: to make learning simple and accessible. We believe that human potential is limitless if you're willing to put in the work.

© 2024 Digestible Notes All Rights Reserved.

Our Socials

• Register or Log In
• 0) { document.location='/search/'+document.getElementById('quicksearch').value.trim().toLowerCase(); }">

Chapter 7 Guide answers to the essay questions and problem scenarios

Hypothetical facts Reginald died recently. Consider which of the following provisions in his will might be a valid charitable legacy:

• £100,000 to my trustees on trust to provide temporary shelter for Old Etonians who have fallen on hard times. Preference to be given to my old class mates;
• £10,000 to my trustees to support research into the likely consequences for political and public life of a legal ban on the Society of Free and Accepted Masons;
• £5,000 to my trustees to promote the playing of card games by deprived youth as an alternative to watching television;
• £5,000 to my psychotherapist, Doctor F. Reud, to buy a new couch for the greater comfort of his many grateful patients.

Guidance Your answer should commence with a brief introduction to the way in which charity is defined at law. You should explain the relationship between the preamble to the Statute of Elizabeth I 1601, and the four heads of charity suggested by Lord Macnaghten in Commissioners for Special Purpose of the Income Tax v Pemsel [1891] AC 531. You should then take each part of the question in turn and attempt to identify whether or not the provision falls within the legal definition of charity and yields the necessary public benefit in order to be charitable.

(a) This provision might be charitable under the first head of charity: the relief of poverty (Charities Act 2006 s. 2(2)(a) as consolidated in Charities Act 2011 s. 3(1)(a)). It is somewhat reminiscent of the gift in Re Niyazi’s Will Trusts [1978] 1 WLR 910. There a testator provided that his residuary estate should be held by his trustees upon trust to pay the capital and income to a local authority in a needy part of Cyprus ‘on condition that the same shall be used for the purposes only of the construction of or as a contribution towards the cost of the construction of a working men’s hostel’. Megarry V-C held that this was a valid charitable trust for the relief of poverty. The word ‘hostel’ suggested a poor inhabitant. The judge also took into account the fact that the relatively modest size of the fund made it unlikely that a ‘grandiose building’ would be erected.

The word ‘shelter’ as used in the present legacy also suggests a poor inhabitant. The fact that the beneficiaries are Old Etonians will not disqualify them from benefiting from a charitable trust. In Re Gardom [1914] 1 Ch 662 a trust for ‘ladies of limited means’ was held to be charitable, as was a trust for ‘distressed gentlefolk’ in Re Young [1951] Ch 344. The courts have never been slow to allow the charitable relief of the impoverished upper classes. The inclusion of a preference does not invalidate educational trusts ( Re Koettgen [1954] 1 All ER 581), and is even less likely to invalidate a trust for the relief of poverty. As long as the potential benefiting class is sufficiently large there should be no problem ( Re Segelman [1995] 2 All ER 676). However, there may be a problem if too narrow a class of beneficiaries is actually preferred, if that class, as here, is defined by some personal connection to the testator or to each other, thereby excluding benefits to society at large. Thus, in IRC v Educational Grants Association Ltd [1967] 2 All ER 893, evidence showed that 76 per cent to 85 per cent of the association’s income had been applied to educate the children of persons connected with an associated commercial company. Despite this, the association had claimed a tax refund from the Inland Revenue. The Inland Revenue refused the refund, claiming that the association had failed to apply its funds to exclusively charitable ends. The court held for the IRC.

(b) Trusts for research may be charitable if they are for the advancement of education (Charities Act 2006 s. 2(2)(b) as consolidated in Charities Act 2011 s. 3(1)(b)).

In Re Shaw [1957] 1 WLR 729 George Bernard Shaw left his residuary estate on trust to research into a new English alphabet. This failed as a charitable trust for the advancement of education. The judge held that ‘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’. Accordingly, the clause is Reginald’s will is more likely to be recognised to be a valid charitable trust for education were it to include express provision for dissemination of the research outcomes. There has, however, been limited recognition that the educational benefits of research might still be charitable if confined to the researchers themselves, provided that the subject matter of the research is a worthy object of study ( Re Hopkins [1965] Ch 669).

The political aspect of the research is a bit of a red-herring. Although a trust established for political purposes will not be recognised to be charitable, research into political matters can be charitable ( McGovern v Attorney-General [1981] 3 All ER 493), provided it is not undertaken to support a political campaign.

(c) The playing of card games, as an alternative to television, might be thought to be educational. However, the educational value of television might be expected to be higher than that afforded by most card games. Without more detail as to the nature of the card games and the professions of the trustees, the court is unlikely to approve this gift as charitable. However, subject to proof of a sufficient public benefit, this trust could be a charitable trust for the advancement of education, or even a charitable trust within the Recreational Charities Act 1958 (which, having been reformed by the Charities Act 2006 s. 2(4)(a), has now been repealed and replaced by the Charities Act 2011 s.5). It will not qualify as a trust for sport, because although the advancement of amateur sport is a recognized head of charity under the Charities Act 2006 (now Charities Act 2011 s3(1)(g)), the sport in question must “promote health by involving physical or mental skill or exertion”.

(d) It is acknowledged that trusts for private hospitals can be charitable within the fourth head of charity: other purposes beneficial to the community ( Re Resch’s Will Trusts [1969] 1 AC 514). The legacy of £5,000 to the psychotherapist might be analogous to the case of a private hospital.

However, the fact that the psychotherapist benefits personally from the gift militates against the recognition of charity in this case. In fact, in Re Incorporated Council of Law Reporting for England and Wales [1972] 1 Ch 73 the members of the Court of Appeal expressly doubted that the provision of ‘tools of a trade’ would be charitable.

Select your Country

Jump to navigation

Search form

Pew Charitable Trusts: 2025 Pew-Stewart Scholars Program for Cancer Research

Research category, funding type, internal deadline.

Submit ticket request   // Limit: 1 // Tickets Available: 1 

The 2025 Pew-Stewart Scholars Program for Cancer Research upports assistant professors of outstanding promise in science relevant to the advancement of a cure for cancer.

This program does not fund clinical trials research . Strong proposals will incorporate particularly creative and pioneering approaches to basic, translational, and applied cancer research. Ideas with the potential to produce an unusually high impact are encouraged.

An award of $75,000 per year for four years will be provided. Pew-Stewart scholars will spend at least 80 percent of their time in work related to their overall research goals. Eligibility:

• Candidates must have been awarded a doctorate in biomedical sciences, medicine or a related field.
• As of Aug. 28, 2024 nominees must be at the rank of assistant professor.
• Candidates must  not  have been appointed as an assistant professor at any institution prior to June 10, 2020. 
• Candidates may apply two times in total
• Candidates may not be nominated for the Pew Scholars Program and the Pew-Stewart Scholars Program for Cancer Research in the same year.

For more information please contact  [email protected] .

Program URL

External deadline, solicitation type.

Subscribe to the UArizona Impact in Action newsletter to receive featured stories and event info to connect you with UArizona's research, innovation, entrepreneurial ventures, and societal impacts.

Subscribe now

• Share full article

Advertisement

Supported by

Guest Essay

Skepticism Is Healthy, but in Medicine, It Can Be Dangerous

By Daniela J. Lamas

Dr. Lamas, a contributing Opinion writer, is a pulmonary and critical-care physician at Brigham and Women’s Hospital in Boston.

I arrived at the hospital one recent morning to find a team of doctors gathered just outside a patient room. The patient was struggling — his breaths too fast and too shallow. For days we had been trying to walk the line between treating the pain caused by his rapidly growing cancer and prolonging his life.

Overnight he had worsened. His family, wrestling with the inevitability of his death, had come to a tentative plan, and I needed to make sure that his wife understood what was ahead. I explained that if we inserted a breathing tube, as she had decided overnight, her husband would be sedated. When the rest of their family arrived in Boston, we would take out the tube and he would die. We would not be able to wake him up — to do so would only cause him to suffer.

At this, his wife stiffened. Why wouldn’t he be able to wake up? I explained that his cancer was so advanced that to wake him would be to give him the conscious awareness of drowning. I watched as she took me in, this doctor she had never met before, telling her something she did not want to hear. Her expression shifted. “Why should I believe you?” she asked me. And then, her voice toughening: “I don’t think that I do.”

The room was silent. My patient’s wife looked into her bag, rooting around for a tissue. I glanced down at my feet. Why should she believe me? I was wearing sneakers with my scrub pants, and I found myself wondering whether she would have trusted me without question if I appeared more professional, or if I were older or male. Perhaps, but there was so much more at play in that moment. This was not just about one doctor and one family member, but instead, about a public for whom the medical system is no longer an institution to be trusted.

We are at a crossroads in medicine when it comes to public trust. After a pandemic that twisted science for political gain, it is not surprising that confidence in medicine is eroding. In fact, trust in medical scientists has fallen to its lowest levels since January 2019. As a result, more people are seeking out less conventional voices of “authority” that hew closer to their beliefs. Robert F. Kennedy Jr., a longtime vaccine skeptic campaigning for the presidency, is finding double-digit support in some polls and has made medical freedom a recurring theme of his candidacy.

But our medical system relies on trust — in face-to-face meetings as well as public health bulletins. Distrust can lead doctors to burnout and can encourage avoidable negative outcomes for our patients. This is partly what is driving increasing rates of measles among unvaccinated children , failure to follow recommended cancer screening and refusal to take lifesaving preventive medications . There are no easy solutions here. But if we do not find ways to restore and strengthen trust with our patients, more lives will be lost.

This is relatively new terrain for American physicians. When I was in medical training, we did not talk much about trust. During my early years as a doctor, I barely trusted myself and in fact felt uncomfortable with the responsibility I had to keep my patients alive. Only recently have I found myself thinking about what happens when this ephemeral ingredient in the doctor-patient relationship is lost.

Medical skepticism is not the same as medical nihilism. The data behind the drugs doctors prescribe and the decisions we make need not be the purview of us alone; the public has the right to review the numbers and to make their own decisions about risk and benefit. But when that skepticism shifts into abject and irreparable disbelief, we see some patients make dangerous decisions. And when doctors respond with frustration, that only further separates us from those patients.

Trust can sometimes be repaired by clearly presenting facts and figures, but it is about more than explaining numbers. We tell patients things about the body that are unseen. We recommend lifestyle changes and medication to treat or to prevent problems that may not be felt. Surgeons refer to a profound version of trust called the surgical contract: the idea that when people go under the knife, they are allowing their surgeon to make them sicker — to cut them open — in order to make them better. That trust must be earned.

In emergencies, patients don’t have the luxury to choose whom to trust, and medical decisions must happen hastily, in minutes even. So part of our job is to build rapport quickly. That becomes harder, impossible even, when we enter into the climax of a medical crisis to find that whatever trust our patient may have once had long ago has been eroded. Many of our patients started their medical journeys wanting to believe in their doctors. But then the medical system that they wanted to trust failed them, in small ways and large, from haphazardly rescheduled appointments to real medical error. How do we begin the process of repair, both as a profession and as individuals, when time is short?

In medicine, we talk about the idea of shared decision-making, in which medical decisions are arrived at jointly by doctor and patient, in contrast to the paternalistic tone of years gone by. As doctors, we do not tell our patients what to do — instead we offer them the information necessary for them to choose the path that is right for them.

For all our training, our medical knowledge is useless if our patients are unwilling or unable to believe what we have to offer. And that isn’t a fault of our patients, no matter how bothered we might become. This is a fault of a system that does not deserve our patients’ blind faith, of a surrounding political milieu that has turned scientific fact into fiction in many people’s minds.

That is how I found myself in that room, early that one morning, with my patient’s wife, her disbelief and the weight of the decision hanging between us. I knew so little about her. I did not know her history or her interactions with the medical system. I did not know the story of her husband’s diagnosis and treatment, or whether he had struggled to find care for his cancer. In our fractured system, I was just meeting her that day. I had no way to make her trust me, except to sit with her, to give her what little time with her husband we could. And to hope that regardless of what came before, she would choose to believe what I was telling her.

I am not certain what she believed, but she chose against intubation. Her husband lived until the rest of his family came anyway. And when he died, they left without a word, carrying with them his bags of belongings and — I can only hope — faith that we had done the best we could.

Daniela Lamas is a contributing Opinion writer and a pulmonary and critical-care physician at Brigham and Women’s Hospital in Boston.

The Times is committed to publishing a diversity of letters to the editor. We’d like to hear what you think about this or any of our articles. Here are some tips . And here’s our email: [email protected] .

Follow the New York Times Opinion section on Facebook , Instagram , TikTok , WhatsApp , X and Threads .

• Skip to main content
• Keyboard shortcuts for audio player

NPR suspends veteran editor as it grapples with his public criticism

David Folkenflik

NPR suspended senior editor Uri Berliner for five days without pay after he wrote an essay accusing the network of losing the public's trust and appeared on a podcast to explain his argument. Uri Berliner hide caption

NPR suspended senior editor Uri Berliner for five days without pay after he wrote an essay accusing the network of losing the public's trust and appeared on a podcast to explain his argument.

NPR has formally punished Uri Berliner, the senior editor who publicly argued a week ago that the network had "lost America's trust" by approaching news stories with a rigidly progressive mindset.

Berliner's five-day suspension without pay, which began last Friday, has not been previously reported.

Yet the public radio network is grappling in other ways with the fallout from Berliner's essay for the online news site The Free Press . It angered many of his colleagues, led NPR leaders to announce monthly internal reviews of the network's coverage, and gave fresh ammunition to conservative and partisan Republican critics of NPR, including former President Donald Trump.

Conservative activist Christopher Rufo is among those now targeting NPR's new chief executive, Katherine Maher, for messages she posted to social media years before joining the network. Among others, those posts include a 2020 tweet that called Trump racist and another that appeared to minimize rioting during social justice protests that year. Maher took the job at NPR last month — her first at a news organization .

In a statement Monday about the messages she had posted, Maher praised the integrity of NPR's journalists and underscored the independence of their reporting.

"In America everyone is entitled to free speech as a private citizen," she said. "What matters is NPR's work and my commitment as its CEO: public service, editorial independence, and the mission to serve all of the American public. NPR is independent, beholden to no party, and without commercial interests."

The network noted that "the CEO is not involved in editorial decisions."

In an interview with me later on Monday, Berliner said the social media posts demonstrated Maher was all but incapable of being the person best poised to direct the organization.

"We're looking for a leader right now who's going to be unifying and bring more people into the tent and have a broader perspective on, sort of, what America is all about," Berliner said. "And this seems to be the opposite of that."

Conservative critics of NPR are now targeting its new chief executive, Katherine Maher, for messages she posted to social media years before joining the public radio network last month. Stephen Voss/Stephen Voss hide caption

Conservative critics of NPR are now targeting its new chief executive, Katherine Maher, for messages she posted to social media years before joining the public radio network last month.

He said that he tried repeatedly to make his concerns over NPR's coverage known to news leaders and to Maher's predecessor as chief executive before publishing his essay.

Berliner has singled out coverage of several issues dominating the 2020s for criticism, including trans rights, the Israel-Hamas war and COVID. Berliner says he sees the same problems at other news organizations, but argues NPR, as a mission-driven institution, has a greater obligation to fairness.

"I love NPR and feel it's a national trust," Berliner says. "We have great journalists here. If they shed their opinions and did the great journalism they're capable of, this would be a much more interesting and fulfilling organization for our listeners."

A "final warning"

The circumstances surrounding the interview were singular.

Berliner provided me with a copy of the formal rebuke to review. NPR did not confirm or comment upon his suspension for this article.

In presenting Berliner's suspension Thursday afternoon, the organization told the editor he had failed to secure its approval for outside work for other news outlets, as is required of NPR journalists. It called the letter a "final warning," saying Berliner would be fired if he violated NPR's policy again. Berliner is a dues-paying member of NPR's newsroom union but says he is not appealing the punishment.

The Free Press is a site that has become a haven for journalists who believe that mainstream media outlets have become too liberal. In addition to his essay, Berliner appeared in an episode of its podcast Honestly with Bari Weiss.

A few hours after the essay appeared online, NPR chief business editor Pallavi Gogoi reminded Berliner of the requirement that he secure approval before appearing in outside press, according to a copy of the note provided by Berliner.

In its formal rebuke, NPR did not cite Berliner's appearance on Chris Cuomo's NewsNation program last Tuesday night, for which NPR gave him the green light. (NPR's chief communications officer told Berliner to focus on his own experience and not share proprietary information.) The NPR letter also did not cite his remarks to The New York Times , which ran its article mid-afternoon Thursday, shortly before the reprimand was sent. Berliner says he did not seek approval before talking with the Times .

NPR defends its journalism after senior editor says it has lost the public's trust

Berliner says he did not get permission from NPR to speak with me for this story but that he was not worried about the consequences: "Talking to an NPR journalist and being fired for that would be extraordinary, I think."

Berliner is a member of NPR's business desk, as am I, and he has helped to edit many of my stories. He had no involvement in the preparation of this article and did not see it before it was posted publicly.

In rebuking Berliner, NPR said he had also publicly released proprietary information about audience demographics, which it considers confidential. He said those figures "were essentially marketing material. If they had been really good, they probably would have distributed them and sent them out to the world."

Feelings of anger and betrayal inside the newsroom

His essay and subsequent public remarks stirred deep anger and dismay within NPR. Colleagues contend Berliner cherry-picked examples to fit his arguments and challenge the accuracy of his accounts. They also note he did not seek comment from the journalists involved in the work he cited.

Morning Edition host Michel Martin told me some colleagues at the network share Berliner's concerns that coverage is frequently presented through an ideological or idealistic prism that can alienate listeners.

"The way to address that is through training and mentorship," says Martin, herself a veteran of nearly two decades at the network who has also reported for The Wall Street Journal and ABC News. "It's not by blowing the place up, by trashing your colleagues, in full view of people who don't really care about it anyway."

Several NPR journalists told me they are no longer willing to work with Berliner as they no longer have confidence that he will keep private their internal musings about stories as they work through coverage.

"Newsrooms run on trust," NPR political correspondent Danielle Kurtzleben tweeted last week, without mentioning Berliner by name. "If you violate everyone's trust by going to another outlet and sh--ing on your colleagues (while doing a bad job journalistically, for that matter), I don't know how you do your job now."

Berliner rejected that critique, saying nothing in his essay or subsequent remarks betrayed private observations or arguments about coverage.

Other newsrooms are also grappling with questions over news judgment and confidentiality. On Monday, New York Times Executive Editor Joseph Kahn announced to his staff that the newspaper's inquiry into who leaked internal dissent over a planned episode of its podcast The Daily to another news outlet proved inconclusive. The episode was to focus on a December report on the use of sexual assault as part of the Hamas attack on Israel in October. Audio staffers aired doubts over how well the reporting stood up to scrutiny.

"We work together with trust and collegiality everyday on everything we produce, and I have every expectation that this incident will prove to be a singular exception to an important rule," Kahn wrote to Times staffers.

At NPR, some of Berliner's colleagues have weighed in online against his claim that the network has focused on diversifying its workforce without a concomitant commitment to diversity of viewpoint. Recently retired Chief Executive John Lansing has referred to this pursuit of diversity within NPR's workforce as its " North Star ," a moral imperative and chief business strategy.

In his essay, Berliner tagged the strategy as a failure, citing the drop in NPR's broadcast audiences and its struggle to attract more Black and Latino listeners in particular.

"During most of my tenure here, an open-minded, curious culture prevailed. We were nerdy, but not knee-jerk, activist, or scolding," Berliner writes. "In recent years, however, that has changed."

Berliner writes, "For NPR, which purports to consider all things, it's devastating both for its journalism and its business model."

NPR investigative reporter Chiara Eisner wrote in a comment for this story: "Minorities do not all think the same and do not report the same. Good reporters and editors should know that by now. It's embarrassing to me as a reporter at NPR that a senior editor here missed that point in 2024."

Some colleagues drafted a letter to Maher and NPR's chief news executive, Edith Chapin, seeking greater clarity on NPR's standards for its coverage and the behavior of its journalists — clearly pointed at Berliner.

A plan for "healthy discussion"

On Friday, CEO Maher stood up for the network's mission and the journalism, taking issue with Berliner's critique, though never mentioning him by name. Among her chief issues, she said Berliner's essay offered "a criticism of our people on the basis of who we are."

Berliner took great exception to that, saying she had denigrated him. He said that he supported diversifying NPR's workforce to look more like the U.S. population at large. She did not address that in a subsequent private exchange he shared with me for this story. (An NPR spokesperson declined further comment.)

Late Monday afternoon, Chapin announced to the newsroom that Executive Editor Eva Rodriguez would lead monthly meetings to review coverage.

"Among the questions we'll ask of ourselves each month: Did we capture the diversity of this country — racial, ethnic, religious, economic, political geographic, etc — in all of its complexity and in a way that helped listeners and readers recognize themselves and their communities?" Chapin wrote in the memo. "Did we offer coverage that helped them understand — even if just a bit better — those neighbors with whom they share little in common?"

Berliner said he welcomed the announcement but would withhold judgment until those meetings played out.

In a text for this story, Chapin said such sessions had been discussed since Lansing unified the news and programming divisions under her acting leadership last year.

"Now seemed [the] time to deliver if we were going to do it," Chapin said. "Healthy discussion is something we need more of."

Disclosure: This story was reported and written by NPR Media Correspondent David Folkenflik and edited by Deputy Business Editor Emily Kopp and Managing Editor Gerry Holmes. Under NPR's protocol for reporting on itself, no NPR corporate official or news executive reviewed this story before it was posted publicly.

• Katherine Maher
• uri berliner

site categories

Awa studios names victoria rossellini, who shepherded financing of film blockbusters like ‘avatar’ and ‘life of pi’, senior strategic advisor, npr editor resigns in aftermath of his essay criticizing network for bias.

By Ted Johnson

Ted Johnson

Political Editor

More Stories By Ted

• TikTok Faces Potential U.S. Ban As Joe Biden Signs National Security Bill; CEO Vows Court Fight And Says “Facts And The Constitution Are On Our Side”
• FTC Passes Ban On Non-Compete Clauses In Employee Contracts
• White House Correspondents’ Dinner Preview: Network Mix Celebrity And Politicos For Guest Lists

UPDATE: The NPR editor who penned an essay criticizing the network for what he saw as bias in its coverage of Donald Trump and a host of other issues has resigned.

Uri Berliner , who had been a senior business editor and reporter, posting his resignation letter to NPR CEO Katherine Maher on his X/Twitter account.

A spokesperson for the network declined to comment.

Berliner had been temporarily suspended from NPR after publishing on essay for The Free Press that called out the network for losing “an open minded spirit” and lacking viewpoint diversity. He cited, among other things, audience research showing a drop in the number of listeners considering themselves conservative.

While Berliner’s essay was immediately seized upon by right wing media as evidence of NPR’s bias, some of his colleagues criticized him for making mistakes in his piece in for using “sweeping statements” to make his case, in the words of NPR’s Steve Inskeep. Maher criticized the essay in a note to staffers, writing, “Questioning whether our people are serving our mission with integrity, based on little more than the recognition of their identity, is profoundly disrespectful, hurtful, and demeaning.”

But Berliner’s essay did trigger some discussion within NPR, as some voices on the right, including Trump, called for defunding the network.

PREVIOUSLY: NPR has put on temporary suspension the editor who penned an essay that criticized the network for losing the trust of listeners as it has covered the rise of Donald Trump and coverage of Covid, race and other issues.

Uri Berliner has been suspended for five days without pay, starting last Friday, according to NPR’s David Folkenflik.

Related Stories

NPR’s Linda Wertheimer, One Of The Network’s “Founding Mothers,” Announces Retirement

Bob Edwards Dies: Longtime Anchor Of NPR’s ‘Morning Edition’ & SiriusXM Host Was 76

“That wouldn’t be a problem for an openly polemical news outlet serving a niche audience. But for NPR, which purports to consider all things, it’s devastating both for its journalism and its business model,” Berliner wrote. He also wrote that “race and identity became paramount in nearly every aspect of the workplace,” while claiming that the network lacked viewpoint diversity.

His essay set off a firestorm on the right, with Trump blasting the network and Fox News devoting extensive coverage to the criticism, along with calls for ending government funding for NPR.

In his essay, Berliner wrote that “defunding isn’t the answer,” but that its journalism needed to change from within. The network’s funding has been a target of conservatives numerous times in the past, but lawmakers ultimately have supported public radio.

Berliner shared his suspension notice with Folkenflik, who wrote that it was for failure to seek approval for outside work, as well as for releasing proprietary information about audience demographics.

Katherine Maher, who recently became CEO of the network, published a note to staff last week that appeared to take issue with Berliner’s essay, writing that there was “a criticism of our people on the basis of who we are.”

“Asking a question about whether we’re living up to our mission should always be fair game: after all, journalism is nothing if not hard questions,” Maher wrote. “Questioning whether our people are serving our mission with integrity, based on little more than the recognition of their identity, is profoundly disrespectful, hurtful, and demeaning.”

Maher herself has become a target on the right, with some figures citing her past social media posts, including one from 2020 that referred to Trump as a “deranged racist sociopath.” At the time, she was CEO of the Wikimedia Foundation. In a statement to The New York Times , Maher said that “in America everyone is entitled to free speech as a private citizen.” “What matters is NPR’s work and my commitment as its C.E.O.: public service, editorial independence and the mission to serve all of the American public,” she said.

An NPR spokesperson did not immediately return a request for comment. The network told The Times that Maher is not involved in editorial decisions.

Some of Berliner’s colleagues have been vocal in their own criticism of his essay. Eric Deggans, the network’s TV critic and media analyst, wrote that Berliner “set up staffers of color as scapegoats.” He also noted that Berliner “didn’t seek comment from NPR before publishing. Didn’t mention many things which could detract from his conclusions.”

Must Read Stories

Tiktok faces potential u.s. ban as joe biden inks bill; ceo vows court fight, sony global scripted boss nina lederman exiting after six years, amy adams to star in drama ‘at the sea’ from ‘pieces of a woman’ filmmakers, saturday’s contenders lineup: gypsy rose blanchard, ‘quiet on set’ team, more.

Subscribe to Deadline Breaking News Alerts and keep your inbox happy.

Read More About:

39 comments.

Deadline is a part of Penske Media Corporation. © 2024 Deadline Hollywood, LLC. All Rights Reserved.

Watch CBS News

Uri Berliner, NPR editor who criticized the network of liberal bias, says he's resigning

By Aimee Picchi

Edited By Anne Marie Lee

April 17, 2024 / 12:21 PM EDT / CBS News

Uri Berliner, a senior editor at National Public Radio who had been suspended from his job after claiming the network had "lost America's trust" by pushing progressive views while suppressing dissenting opinions, said he is resigning from the broadcaster.

"I am resigning from NPR, a great American institution where I have worked for 25 years," Berliner wrote in his resignation letter to NPR CEO Katherine Maher, and which he posted in part on X, the former Twitter. "I cannot work in a newsroom where I am disparaged by a new CEO whose divisive views confirm the very problems at NPR I cite in my Free Press essay."

My resignation letter to NPR CEO @krmaher pic.twitter.com/0hafVbcZAK — Uri Berliner (@uberliner) April 17, 2024

Berliner's resignation comes eight days after he published an  essay  in the Free Press that caused a firestorm of debate with his allegations that NPR was suppressing dissenting voices. In response to his critique, some conservatives, including former President Donald Trump, called on the government to "defund" the organization. 

Maher, who became NPR's CEO in March, wrote a staff memo a few days after publication of Berliner's essay addressing his criticisms of the organization's editorial process. Among Berliner's claims are that NPR is failing to consider other viewpoints and that it is fixated on diversity, equity and inclusion initiatives.

"Questioning whether our people are serving our mission with integrity, based on little more than the recognition of their identity, is profoundly disrespectful, hurtful and demeaning," Maher wrote. 

Some of Berliner's NPR colleagues also took issue with the essay, with "Morning Edition" host Steve Inskeep  writing on his Substack  that the article was "filled with errors and omissions."

"The errors do make NPR look bad, because it's embarrassing that an NPR journalist would make so many," Inskeep wrote.

Berliner's suspension, which occurred Friday, was  reported  by NPR media correspondent David Folkenflik. NPR declined to comment to CBS News about Berliner's resignation. "NPR does not comment on individual personnel matters," a spokesperson said.

Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.

More from CBS News

Pelosi says Netanyahu "should resign"

Poland "ready" to host NATO nuclear weapons, its president says

Terry Anderson, reporter held hostage for years in Lebanon, dies at 76

Tesla cuts prices around the globe amid slowing demand for its EVs