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Charitable Trusts: Equity & Trusts Law Directions (7th Edn) Gary Watt

This chapter discusses charitable trusts, highlighting their privileges and the legal distinctions between charitable and private purpose trusts. It outlines the requirements for charitable status, including the necessity for public benefit, and examines the roles of the Charity Commission and the Attorney-General in overseeing charities. Additionally, it addresses the advantages and disadvantages of charitable status, the implications of failing charitable purposes, and the administration of charitable trusts.

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0% found this document useful (0 votes)

41 views47 pages

Charitable Trusts: Equity & Trusts Law Directions (7th Edn) Gary Watt

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2004jade.h

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Download as PDF, TXT or read online on Scribd

8.

Charitable trusts

Equity & Trusts Law Directions (7th edn)

Gary Watt

p. 172 8. Charitable trusts

Gary Watt

[Link]
Published in print: 08 April 2021
Published online: September 2021

Abstract
Without assuming prior legal knowledge, books in the Directions series introduce and guide readers through key points of law
and legal debate. Questions, diagrams and exercises help readers to engage fully with each subject and check their
understanding as they progress. Charitable trusts are not subject to the objections against private purpose trusts and enjoy
certain privileges. Charities are not public institutions, but are nevertheless subject to judicial control, to the constitutional
protection of the Crown as parens patriae (acting through the Attorney-General) and to the supervision of the Charity
Commission. Moreover, they are not subject to the beneficiary principle and to the rule against inalienability of capital. This
chapter deals with charitable trusts and discusses the distinction between legal and ‘everyday’ notions of charity. It also
examines a charitable purpose, the advantages and disadvantages of charitable status, limits on the recognition of charitable
trusts, what happens when a charitable purpose fails, whether the purpose of a charitable status is sufficiently beneficial to
the public and the administration of charitable trusts. The chapter furthermore considers trust law and tax law privileges; the
roles of charities, such as the prevention or relief of poverty and the advancement of education and religion; the public benefit
requirement in educational trusts; recreational charities; the exclusivity requirement; the doctrine of cy près; and the disposal
of surplus donations.

Keywords: charitable trusts, charity, Charity Commission, poverty, public benefit, recreational charities, exclusivity,
doctrine of cy près, surplus donations, educational trusts

Page 1 of 47

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personal use (for details see Privacy Policy and Legal Notice).
Subscriber: University of Sussex; date: 24 April 2025
8. Charitable trusts

Learning objectives

By the end of this chapter you should be able:

● to distinguish between legal and ‘everyday’ notions of charity;

● to recognise a charitable purpose;

● to describe the advantages and disadvantages of charitable status;

● to identify limits on the recognition of charitable trusts, including the requirement that purposes
be exclusively charitable, not for profit and non-political;

● to understand what happens when a charitable purpose fails;

● to advise as to the extent to which the charitable status of a particular purpose turns upon whether
the purpose is sufficiently beneficial to the public;

● to outline the administration of charitable trusts.

Page 2 of 47

p. 173 Introduction

At the start of every new chapter it is useful to pause to reflect. When it comes to a chapter on charity, it is
more important than ever. Charity is a big idea; it has the potential to be the greatest of ideas. The UK public
has supported a number of high-profile charitable fundraising initiatives over the years, including Live Aid in
1985 and Comic Relief’s ‘Red Nose Day’ which has run every year since. It might surprise, therefore, to
discover that we still lag far behind our American friends when it comes to charitable giving. The following
extract is from an article on philanthropy written by Sir Philip Christopher Ondaatje, OC, CBE, a noted
philanthropist. (An entire new wing of the National Portrait Gallery has been named after his family.)

Outside the box

Christopher Ondaatje, ‘Giving It All Away’, New Statesman, 15 January 2007

There are … enormous differences between how Americans and British people give: 77 per cent of all
collection methods in the UK are spontaneous, looking for loose change. In the United States, there is
a culture of ‘planned giving’, which provides 61 per cent of the voluntary income of non-profit
organisations. One critical factor is tax incentives. According to the biweekly US Chronicle of
Philanthropy, 54 per cent of the richest US donors said that they give for the tax benefits. In Britain,
the charity, rather than the individual, receives most of the refund under Gift Aid. As a result, many
potential donors do not feel that the system gives them a tax break.

8.1 The significance of charitable status

Thinking point

In the following sections frequent reference is made to the ‘privileges’ of charitable status. We should
acknowledge from the outset that the special treatment of charities established for the benefit of the
public might be regarded as something they are justly entitled to rather than something that is
granted to them by the government as an indulgence.

8.1.1 The privileges of charitable status

In 1955 the Radcliffe Commission on Taxation (Cmd 9474) recommended that when considering the validity
of a charitable trust, the fiscal privileges attaching to such trusts should be considered separately from the
general trust law privileges they enjoy. Approving this, Lord Cross has stated (in Dingle v Turner [1972] AC
601) that:

Page 3 of 47

[i]t is, of course, unfortunate that the recognition of any trust as a valid charitable trust should
automatically attract fiscal privileges, for the question whether a trust to further some purpose

p. 174 ↵ is so little likely to benefit the public that it ought to be declared invalid and the question
whether it is likely to confer such great benefits on the public that it should enjoy fiscal immunity
are really two quite different questions. The logical solution would be to separate them and to say—
as the Radcliffe Commission proposed—that only some charities should enjoy fiscal privileges.

For the purposes of the remainder of this section we will adopt the distinction between trust law and fiscal
privileges.

[Link] Trust law privileges

Charitable trusts are not subject to the objections that are raised against private purpose trusts:

although they are not public institutions, charities are subject to the constitutional protection of the
Crown as parens patriae (acting through the Attorney-General), to the supervision of the Charity
Commission and to judicial control;

charities are not subject to the beneficiary principle; the Attorney-General represents the public as the
person in whose favour the court can decree performance of a charitable trust, although he can be
substituted as claimant for individuals: see Hauxwell v Barton-on-Humber UDC [1974] Ch 432;

charitable trusts are not subject to the rule against inalienability of capital (6.4). This is because the
public policy considerations which prohibit perpetual gifts and trusts should be no bar to the public
benefits which charities bring about;

charitable trusts will not fail for uncertainty of object. Provided that the trust was intended to be applied
exclusively for charitable purposes it will not fail if those purposes are, or become, uncertain (see cy-
près at 8.4). It may be valid even if it is impossible to discharge the trust according to its strict terms. In
Chichester Diocesan Fund and Board of Finance v Simpson [1944] AC 341 at 348, Viscount Simon LC held
that charities are an exception to the fundamental principle that the testator must by the terms of his
will determine the specific destination of the property with which the will proposes to deal.

Additional privileges of charitable status include:

the more generous approach taken by the courts to the construction of charitable trusts. In Weir v
Crum-Brown [1908] AC 162 at 167 Lord Loreburn stated that ‘there is no better rule than that a
benignant construction will be placed upon charitable bequests’ and in IRC v McMullen Lord Hailsham
of St Marylebone approved that dictum when he held that ‘[i]n construing trust deeds the intention of
which is to set up a charitable trust, and in others too, where it can be claimed that there is ambiguity, a
benignant construction should be given if possible’;

charities must be registered, registration bringing with it a conclusive presumption of charitable status
for the period of registration.

Page 4 of 47

[Link] Tax law privileges

Charitable trusts, and those who donate to them, enjoy a wide range of fiscal exemptions and privileges. They
include exemptions for the charity from income tax, corporation tax and capital gains tax and exemptions for
the donor from capital gains tax and inheritance tax. There are also exemptions from stamp duty on transfers
and from non-domestic local rates. In addition, donors can reclaim income tax on one-off donations under
the ‘gift aid’ scheme, and charities can reclaim income tax on annual covenants for more than three years.

p. 175 ↵ The extent of these privileges has prompted some to call for a costs–benefit calculus as a prerequisite to
the recognition of charitable status (see, for example, Lord Cross in Dingle v Turner [1972] AC 601). If it were
to occur, it would undoubtedly involve a calculation of great complexity. It cannot be assumed, for instance,
that gains made by charities due to fiscal privilege are equal in value to the losses made by the Inland Revenue
as a result of that privilege. To use the economists’ term, it is not a ‘zero-sum game’. The fiscal privilege of
charitable status may itself influence the size and frequency of donations made to the charity (at present,
donors are entitled to a degree of tax relief on one-off donations of over £250 and donations covenanted to be
made regularly for at least four years). The calculation is a complex one even before an attempt has been
made to quantify the benefit in such abstract goods as research into a cure for cancer, education in the arts
and the advancement of religion.

8.1.2 The need for public benefit

In theory, charities ought to enjoy certain advantages by right, but in practice they enjoy them by way of
privileges granted by the political State. It will therefore come as no surprise to discover that a purpose will
only be considered charitable if it is for the public benefit. This requirement has been strengthened by the
Charities Act 2006. There is certainly merit in the idea that all charities should pass a threshold minimum
public benefit requirement, but the difficulty will be to fix that threshold at the appropriate level. It is
politically sensitive, economically complex and morally invidious to attempt to rate charities according to the
degree to which they are beneficial to the public.

According to the Charity Commission’s 2013 official guidance on public benefit, for a purpose to be ‘for the
public benefit’ it must generally satisfy both the ‘benefit’ and ‘public’ aspects. The exception is if the purpose
is to relieve or prevent poverty, where different rules apply (see later). The Commission explains that in order
to satisfy the ‘benefit aspect’ of public benefit, the purpose must be ‘beneficial’ and ‘any detriment or harm
that results from the purpose must not outweigh the benefit’. To satisfy the ‘public aspect’ of public benefit,
the purpose must ‘benefit the public in general, or a sufficient section of the public’ and ‘not give rise to more
than incidental personal benefit’. The Commission acknowledges that the ‘benefit’ and ‘public’ aspects can
overlap, and warns that where a charity has more than one purpose, the public benefit of one purpose ‘cannot
be used to offset any lack of public benefit in another’. To satisfy the ‘beneficial’ requirement of the ‘benefit
aspect’, the beneficial aspect must be identifiable and ‘capable of being proved by evidence where necessary’
and ‘not based on personal views’. The Commission gives the example of emergency aid in response to
natural disaster as one where the beneficial element is objectively self-evident and will not need to be proved.
The artistic merit of paintings or the health benefits of a therapy, for example, are not objectively self-evident

Page 5 of 47

in that sense. Objective evidence of the detrimental effects of a purpose can outweigh its beneficial aspect, but
where the benefit is clearly strong it will take especially strong evidence of detriment to outweigh it. In short,
there seems to be a presumption in favour of supporting benefits in the face of possible detriment.

Under the ‘public aspect’ of public benefit, the requirement of benefit to the public in general is self-
explanatory (it would include, for example, the benefit of protecting an endangered species), but the
alternative requirement of benefiting ‘a sufficient section of the public’ (also called a ‘public class’ of people)
requires more explanation. People in a certain area or belonging to a certain community will generally be a
‘public class’ of people. More controversially, so are categories of people defined by reference to a ‘protected

p. 176 characteristic’ under the Equality ↵ Act 2010. Thus a ‘public class’ may be identified by age, disability, sex,
sexual orientation, gender reassignment, marriage and civil partnership, pregnancy and maternity, race or
nationality (but not skin colour), religion or belief, ‘provided the restriction of benefits to people having that
characteristic is justified in relation to the purpose’. The question of what is and is not ‘justified’ promises to
be hotly disputed in future cases.

A trust that excludes the poor from benefiting will not be for a ‘sufficient section of the public’. Other trusts
that will not be for a ‘sufficient section of the public’ will be determined on a case-by-case basis, but
according to the Commission’s guidance they will include the following: ‘a purpose which is confined to a
closed religious organisation’; ‘a purpose where all the potential beneficiaries (now and in the future) are
named, such as an individual or individuals or a fixed group of individuals’; ‘a purpose where the number of
people who can benefit (now and in the future) is numerically negligible (unless the purpose is for the relief,
and in some cases the prevention, of poverty)’; ‘a purpose which defines who can benefit in a manner which,
when related to the purpose, is “capricious” (e.g. wholly irrelevant, irrational or without good reason)’; ‘a
purpose which benefits members of a mutual benefit society’; and, with the exception of a purpose for the
relief, and in some cases the prevention, of poverty, ‘a purpose which exists for the benefit of an
organisation’s members only unless: a sufficient section of the public can access those benefits by becoming
members and the membership is a suitable way of carrying out the charity’s purpose for the public benefit’.
Finally, a charitable purpose may only confer personal benefits if these are ‘incidental’ to carrying out the
purpose.

Case close-up

The Independent Schools Council v The Charity Commission for England and Wales
[2011] UKUT 421 (TCC)
In response to issues referred by the Attorney-General under the Charities Act 1993, the UK’s Upper
Tribunal (Tax and Chancery Chamber) considered the law governing fee-paying schools.

Held: The 2006 Act ‘makes little, if any, difference to the legal position of the independent schools
sector’, but it does ‘bring into focus what it is that the pre-existing law already required’, namely that
a trust which ‘excludes the poor from benefit cannot be a charity’ and therefore a school which
operates solely for the benefit of fee-paying students is not sufficiently for the public benefit even

Page 6 of 47

though it undoubtedly operates for the public benefit in the general sense of advancing the overall
level of education in the population at large. It lies within the trustees’ discretion to determine what
level of provision (above the minimum necessary to secure charitable status) should be made for the
poor to access the educational benefits arising from a fee-paying school. The Upper Tribunal
suggested that the issue of the charitable status of fee-charging schools ought to be resolved by
politicians rather than judges.

Thinking point

Do you think that the tribunal took an overly laissez-faire approach to the issue? (See next.)

p. 177 ↵

Outside the box

‘Charity that Begins at the School Gate’ The Guardian, Friday 11 July 2008
(Extract from a letter submitted by members of the ‘Education Reform Group’)

‘We are asking the Charity Commission to ensure … that [fee-charging] schools are made truly
accountable to deliver public benefit, particularly to the 93% of children who do not attend them.
State schools are made rigorously and publicly accountable for their performance. Charitable fee-
charging schools should be equally accountable to the public, not just to fee-paying parents. We also
call upon the Charity Commission to avoid approving public benefit activities that are in fact a
disbenefit to the state sector: for example, bursaries—a reworking of the assisted places scheme that
creams off the most able pupils; or the poaching of state school teachers in shortage subjects.’

Calls for accountability turned into calls for abolition when the Labour Party’s 2019 annual conference voted
to integrate private schools into the state sector, take over their teaching and redistribute their assets (which
include historic buildings, endowments and land) (‘Labour pledge to abolish private schools could prove
costly’, Financial Times, 23 September 2019).

Page 7 of 47

Thinking point

Would such a proposal be workable? Would it be beneficial to the public? Should that last question be
determined by Parliament or by the courts and Charity Commission?

NOTE: Throughout this chapter reference is made to the Charities Act 2011. This is a consolidating statute
that brings the Charities Acts 1993 and 2006 and the Recreational Charities Act 1958 under one new title
without changing the substance of the law in any significant way. Given the relatively recent date of this
change and in the interests of ease of cross-referencing between this text and your study notes and other
materials, references to the 2011 Act are sometimes still accompanied by references to corresponding
provisions in the old 1993 and 2006 Acts.

8.1.3 The management of charities

[Link] By a corporation
Part VII of the Charities Act 1993 introduced a simplified scheme for the incorporation of charities. (See, now,
Part 12 of the 2011 Act.) The increasing use of corporate status by charities should not be underestimated, but
there is not the scope to consider that here. For present purposes, our attention will be confined to charitable
trusts.

[Link] By trustees
The basic duties of charity trustees are the same as those of other trustees. There are, however, some
additional duties peculiar to charity trustees. These include registration of the charity (most charities must be

p. 178 registered—see s 3 of the 1993 Act; ss 29–31 of the 2011 Act); seeking ↵ a cy-près scheme (see 8.4) where
the trust can no longer be discharged; avoiding needless accumulation of funds (1992 Charity Commissioners
Report, p. 25); keeping accounts in the form appropriate to the size of the charity (Charities Act 1993, ss 41–
43; Charities Act 2011, Part 8); and preparing an annual report (s 45). Charity trustees also have special duties
in relation to the investment of the trust fund (see Chapter 14). If a problem should arise in the course of the
administration of a charity, the trustees may, by written request, seek the advice of the Charity Commission
(s 29).

Certain persons are disqualified from acting as trustees of charitable trusts (s 72). Examples include persons
who have been convicted of dishonesty offences and persons subject to an undischarged bankruptcy. The
maximum punishment for acting whilst disqualified is two years’ imprisonment and a fine (s 73).

Page 8 of 47

[Link] By the court

As a result of the Charities Act 1993 the role of the courts in deciding whether or not a body is charitable has
been largely transferred to the Charity Commission. The court remains the forum of ultimate appeal. The
court’s jurisdiction to establish a scheme for the administration of a charity (matters such as the
appointment of trustees, extending powers of investment, etc) is concurrent with that of the Charity
Commission (as to which, see s 17 of the 1993 Act; Charities Act 2011, ss 69–75).

[Link] By the Charity Commission

The Charity Commission for England and Wales is a non-ministerial government department and part of the
Civil Service. According to its website, the Commission is ‘completely independent of Ministerial influence
and also independent from the sector it regulates. It has a number of quasi-judicial functions where it uses
powers similar to those of the High Court.’ The Commission is required to report on its performance to
Parliament annually.

The Charities Act 2006, s 7 (Charities Act 2011, Part 2) defines the objectives, functions and duties of the
Charity Commission. Its objectives are as follows: its ‘public confidence objective is to increase public trust
and confidence in charities’; its ‘public benefit objective is to promote awareness and understanding of the
operation of the public benefit requirement’; its ‘compliance objective is to promote compliance by charity
trustees with their legal obligations in exercising control and management of the administration of their
charities’; its ‘charitable resources objective is to promote the effective use of charitable resources’; and its
‘accountability objective is to enhance the accountability of charities to donors, beneficiaries and the general
public’. The Commission’s general functions include determining whether institutions are or are not charities;
encouraging and facilitating the better administration of charities; identifying and investigating apparent
misconduct or mismanagement in the administration of charities and taking remedial or protective action in
connection with misconduct or mismanagement therein; determining whether public collections certificates
should be issued, and remain in force, in respect of public charitable collections; obtaining, evaluating and
disseminating information in connection with the performance of any of the Commission’s functions or
meeting any of its objectives (including the maintenance of an accurate and up-to-date register of charities);
and giving information or advice, or making proposals, to any Minister of the Crown on matters relating to
any of the Commission’s functions or meeting any of its objectives. The Commission’s general duties require
it to act, so far as is reasonably practicable, in a way which is compatible with its objectives, and which it
considers most appropriate for the purpose of meeting those objectives and so as to encourage all forms of
charitable giving and voluntary participation in charity work.

p. 179 8.2 The legal definition of charity

‘Of all the words in the English language bearing a popular as well as a legal signification I am not sure that
there is one which more unmistakably has a technical meaning in the strictest sense of term, that is a
meaning clear and distinct, peculiar to the law as understood and administered in this country, and not
depending upon or coterminous with the popular or vulgar use of the word’ (per Lord Macnaghten,
Commissioners for Special Purpose of the Income Tax v Pemsel [1891] AC 531).

Page 9 of 47

‘“Charity” and “charitable” are technical words in English law and must be so construed unless it can be seen
from the wording of the will as a whole that they are used in some other than their technical sense’ (per Lord
Porter, Chichester Diocesan Fund and Board of Finance v Simpson [1944] AC 341 at 363).

Thinking point

How would you have defined charity before you commenced your legal studies? How would you
define charity now? Write down your definition and at the end of the chapter reflect upon how you
would need to change your definition to make it legally accurate. Which of the pursuits listed at Table
8.1 would you regard as being charitable? Briefly write the reason for your choice under the relevant
column and review your choices at the end of the chapter.

Table 8.1 Charity or not charity?

Purpose Charitable Non-charitable

Campaigning to end the Gulf War □ □

Seeking a ban on vivisection □ □

The provision of sporting facilities to the Royal Navy □ □

Faith healing □ □

Giving cash to a destitute nephew □ □

The provision of a sanctuary for wild animals □ □

The exhibition of watercolours by a little-known artist □ □

Whilst we are playing the definition game, try to define the following concepts in your own words (again, it
would be useful to write them down and review them at the end of the chapter to see if they need to be
changed):

poverty;

education;

art;

p. 180 sport;

religion;

political.

Page 10 of 47

The presence of some of the words in the list might surprise you. Nevertheless, it has been the task of the
courts down the years to attach useful meaning to some of these concepts and terms. As you work through
this chapter reflect upon how the judges approach the problem of defining such large concepts as ‘art’ and
‘religion’. Could you do any better?

8.2.1 Statutory definitions

The Charities Act 2006 attempted to provide a statutory definition of charity in the form of a list of charitable
purposes. The only statutory precedent for such a list is the preamble to a statute of 1601, the so-called
Statute of Elizabeth I. The preamble contains a list of contemporary charitable uses ‘so varied and
comprehensive that it became the practice of the court [of Chancery] to refer to it as a sort of index or
chart’ (Lord Macnaghten, Commissioners for Special Purpose of the Income Tax v Pemsel [1891] AC 531 at 581).
Ironically, the statute itself was not at all concerned with the definition of charity.

Statute

Statute of Charitable Uses (1601) 43 Eliz. I, c. 4

Preamble
Whereas Lands, Tenements, Rents, Annuities, Profits, Hereditaments, Goods, Chattels, Money and
Stocks of Money, have been heretofore given, limited, appointed and assigned, as well as by the
Queen’s most excellent Majesty, and her most noble Progenitors, as by sundry other well disposed
persons; some for Relief of aged, impotent and poor People, some for the Maintenance of sick and
maimed Soldiers and Mariners, Schools of Learning, Free Schools, and Scholars in Universities, some
for the Repair of Bridges, Ports, Havens, Causeways, Churches, Sea-Banks and Highways, some for the
Education and Preferment of Orphans, some for or towards Relief, Stock or Maintenance for Houses of
Correction, some for the Marriages of Poor Maids, some for Supportation, Aid and Help of young
Tradesmen, Handicraftsmen and Persons decayed, and others for the Relief or Redemption of
Prisoners or Captives, and for Aid or Ease of any poor Inhabitants concerning Payments of Fifteens [a
tax on moveable property], setting out of Soldiers and other Taxes; which Lands, Tenements, Rents,
Annuities, Profits, Hereditaments, Goods, Chattels, Money and Stocks of Money, nevertheless have
not been employed according to 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: For
Redress and Remedy whereof, Be it enacted …

Page 11 of 47

Case close-up

Morice v Bishop of Durham (1804) 9 Ves 399, Court of Appeal

Facts: a bequest was made to the Bishop upon trust for ‘such objects of benevolence and liberality as
the Bishop of Durham in his own discretion shall most approve’.

Sir William Grant MR: ‘Is this a trust for charity? Do purposes of liberality and benevolence mean the

p. 181 same as objects of charity? That word in its widest sense denotes all the good ↵ affections men
ought to have towards each other; in its most restricted and common sense relief of the poor. In
neither of these senses is it employed in this court. Here its signification is derived chiefly from the
statute 43 Eliz., c. 4 [relating to charitable gifts]. Those purposes are considered charitable which that
statute enumerates or which by analogies are deemed within its spirit and intendment, and to some
such purpose every bequest to charity generally shall be applied. But, it is clear, liberality and
benevolence can find numberless objects not included in that statute in the largest construction of it.
The use of the word “charitable” seems to have been purposely avoided in this will in order to leave
the bishop the most unrestrained discretion. Supposing the uncertainty of the trust no objection to its
validity, could it be contended to be an abuse of the trust to employ this fund upon objects which all
mankind would allow to be objects of liberality and benevolence though not to be said, in the language
of this court, to be objects also of charity? But what rule of construction could it be said that all objects
of liberality and benevolence are excluded which do not fall within the statute of Elizabeth? The
question is not whether he may not apply it upon purposes strictly charitable, but whether he is
bound so to apply it? I am not aware of any case in which the bequest has been held 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.’

All this talk of the ‘spirit of the preamble’ will understandably lead you to think that the legal definition of
charity floats cloud-like above the judge’s head. To decide whether or not a particular enterprise is charitable
is indeed an invidious task, and the judges have generally preferred to avoid it by means of rules and
precedent (see Gardner, An Introduction to the Law of Trusts, Oxford: Clarendon Press, 1990, pp. 105–6). This
brings us to the next section.

8.2.2 The heads of charity

In Commissioners for Special Purpose of the Income Tax v Pemsel [1891] AC 531, Lord Macnaghten held that
‘charity’ in its legal sense comes under four principal heads:

trusts for the relief of poverty;

trusts for the advancement of education;

trusts for the advancement of religion;

Page 12 of 47

trusts for other purposes beneficial to the community, not falling under any of the preceding heads.

In Scottish Burial Reform and Cremation Society Ltd v Glasgow Corpn [1968] AC 138 the appellant was a non-
profit making company incorporated to promote cremation, which service it had carried out in Glasgow for
many years. It provided opportunities for religious observance but had not been incorporated on any religious
basis.

Thinking point

Do you think that the business of the company fell within any of Lord Macnaghten’s four heads of
charity?

The House of Lords held that the objects of the company were for the benefit of the community and fell

p. 182 within the fourth of Lord Macnaghten’s heads of charity. However, Lord Wilberforce ↵ asserted that the
‘four heads’ were a classification of convenience and not necessarily a comprehensive set of charitable
classes, that Lord Macnaghten’s words should not be given the force of statute and that the law of charity is a
continually evolving subject. As mentioned earlier, the heads of charity have now been extended by statute.
The list contained in s 3(1) of the Charities Act 2011 (s 2(2) of the Charities Act 2006) is as follows:

the prevention or relief of poverty (para. a);

the advancement of education (para. b);

the advancement of religion (para. c);

the advancement of health or the saving of lives (para. d);

the advancement of citizenship or community development (para. e);

the advancement of arts, culture, heritage or science (para. f);

the advancement of amateur sport (para. g);

the promotion of human rights, conflict resolution or reconciliation or the promotion of religious or
racial harmony or equality and diversity (para. h);

the advancement of environmental protection or improvement (para. i);

the relief of those in need, by reason of youth, age, ill-health, disability, financial hardship or other
disadvantage (para. j);

the advancement of animal welfare (para. k);

the promotion of the efficiency of the armed forces of the Crown or of the efficiency of the police, fire
and rescue services or the ambulance services (para. l);

[other existing charitable purposes or analogous charitable purposes. In essence, any other purpose
intended to provide community benefit] (para. m).

Page 13 of 47

In Gilmour v Coats [1949] AC 426 (subsequently followed by Cross J in Neville Estates Ltd v Madden [1962] Ch
832 at 853) Lord Simonds warned (at 449) that, in enlarging the compass of charity ‘it is dangerous to reason
by analogy from one head of charity to another’. In a similar vein, Lord Upjohn observed in Scottish Burial
Reform and Cremation Society Ltd v Glasgow Corpn [1968] AC 138 that ‘the authorities show that the “spirit and
intendement” of the preamble to the Statute of Elizabeth have been stretched almost to breaking point’ (at
153). The enlargement of the list of charitable ‘heads’ from four to 13 (and the inclusion within the 13 of a
great many sub-heads) was a direct response to the fact that the four heads had been seriously overstretched
with the effort of encompassing the range of modern charitable purposes. We can nevertheless expect new
species of charity to be admitted in the future, by analogy to those listed in paras a–l. This is because the final
head (‘m’) includes any purposes that may reasonably be regarded as analogous to, or within the spirit of, any
purposes which have been recognised under charity law as falling within the other heads.

In the following sections existing law is arranged under each of the new heads of charity. The existing law
remains valid apart from the very few cases in which the Charities Act 2006 expressly changed the meaning
of charity.

8.2.3 The prevention or relief of poverty (head ‘a’)

[Link] The meaning of poverty

Does ‘the relief of poverty’ equate to ‘the meeting of a material need’?

In Re Gwyon [1930] 1 Ch 255 the testator directed that the residue of his estate should be applied by his

p. 183 executor to establish the ‘Gwyon’s Boys Clothing Foundation’; a foundation to ↵ provide ‘knickers’ (a sort
of trouser) for boys between the ages of 10 and 15 in a certain district. The boys could replace their old pair for
a new pair, provided that the words ‘Gwyon’s Present’ were still legible on the waistband of the old pair. The
claim that the gift was a valid charitable trust for the relief of poverty failed. None of the conditions of the gift
necessarily imported poverty. Eve J noted that the trustees would have no power to refuse a boy his gift on the
ground merely that the boy was materially affluent. (In fact, a closer examination of the conditions attaching
to the gift reveals that the gift was anything but charitable. According to its terms, no boy was eligible who
was already receiving support from a charity or the local parish, and no ‘black boy’ was eligible!)

Does the ‘relief of poverty’ equate to ‘the relief of the destitute’?

The Oxford English Dictionary defines ‘destitute’ in this sense as ‘now, without the very necessaries of life or
means of bare subsistence, in absolute want’. The attitude of the courts has always been that the destitute are
always poor, but that the poor are not always destitute. In Re Gardom [1914] 1 Ch 662 at 668 Eve J held that
‘there are degrees of poverty less acute than abject poverty or destitution, but poverty nevertheless’. In Re
Gardom 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.

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Outside the box

Institute for Fiscal Studies, Poverty and Inequality in the UK: 2011 (IFS Commen
tary C118)

Box 4.1. Poverty definitions and the reporting of poverty

Unless stated otherwise, we measure poverty by counting the number of individuals whose household
income is below 60 per cent of that of the median individual (the median individual is in the middle of
the income distribution). The indicator is a ‘relative’ measure of poverty because the poverty line
moves with median income each year. This definition of poverty as a relative concept is in common
with those used in most of the rest of Europe but contrasts with, for example, the official measure of
poverty used by the United States Census Bureau, which was initially based on the income required to
purchase a fixed basket of food items and has since been uprated in line with price changes. Such
measures are called ‘absolute’ measures of poverty—although this terminology is not intended to
suggest that it measures a more severe state of poverty than relative poverty.

The relative nature of ‘poverty’ in charity law was made explicit by the Court of Appeal in Re Coulthurst [1951]
Ch 622.

The testator, Coulthurst, directed that the income from his estate should be applied by his trustees ‘to or for
the benefit of such … of the … widows and orphaned children of deceased officers and deceased ex-officers’ of
a bank ‘as the bank shall in its absolute discretion consider by reason of his, her or their financial
circumstances to be most deserving of such assistance’.

This was held to be a valid charitable trust intended to benefit the poor, in accordance with the meaning of
the preamble to the Act of 1601. The fact that the beneficiaries were chosen by reference to their employment
with a particular bank did not defeat the charitable nature of a gift for the relief of poverty.

Evershed MR held that ‘poverty does not mean destitution; it is a word of wide and somewhat indefinite

p. 184 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”’.

Are the ‘working classes’ poor?

It has long been accepted by the courts that ‘the poor need not necessarily be poor of the class known as the
working class, and many of the working class … are not poor’ (per Lord Wrenbury in Re Sutton [1901] 2 Ch 640
at 646). Nevertheless, the question still came up for consideration in Re Sanders’ Will Trusts [1954] Ch 265.
There the testator had directed his trustees, by a codicil to his will, to ‘apply one equal third part of my
residuary trust fund in … providing dwellings for the working classes and their families resident in the area of
Pembroke Dock, Pembrokeshire, Wales, or within a radius of five miles therefrom (with preference to actual

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dockworkers and their families employed at the said docks)’. Harman J held that the words ‘working class’
did not indicate a gift to the poor: ‘These are not old persons; they are not widows, they are merely men
working in the docks and their families, and, therefore, I cannot infer any element of poverty here.’

Thinking point

What if a testator provided that his residuary estate should be held 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’?

This disposition arose for consideration in Re Niyazi’s Will Trusts [1978] 1 WLR 910. Megarry V-C held that this
was a valid charitable trust for the relief of poverty. The judge described the case as ‘desperately near the
borderline’, but concluded that only poor persons would be likely to live in a hostel. The word ‘hostel’, he said,
was very different from the word ‘dwelling’ as used in Re Sanders’ WT (see earlier in this section): the former
suggested a poor inhabitant, the latter was appropriate to any house. The judge also took into account (1) the
depressed nature of the area in which the hostel had been directed to be built, and (2) the fact that the
relatively modest size of the fund made it unlikely that a ‘grandiose building’ would be erected.

[Link] The public benefit requirement in poverty trusts

As a result of the Charities Act 2006 (now Charities Act 2011), new trusts for the relief of poverty will only be
awarded charitable status if they are for the public benefit. Prior to the Act it was not a requirement that
poverty trusts should benefit the general public. However, in contrast to other charities, it is not necessary to
demonstrate the ‘sufficient section of the public’ element of public benefit in the case of trusts for the relief
(and in some cases for the prevention) of poverty (AG v Charity Commission Upper Tribunal (Tax and Chancery
Chamber) FTC/84/2011 20 February 2012).

A trust to relieve the poverty of named or identified individuals has never been charitable, but trusts for the
relief of poor members of a private class of persons (i.e. a class of people identified by reference to particular
person or employer (such as the bank in Re Coulthurst, earlier in this section)) were charitable. This appears
to be unchanged by the 2006 Act (Her Majesty’s Attorney General et al. v The Charity Commission Upper Tribunal
(Tax and Chancery Chamber) (2012) WL 488349). In Re Scarisbrick [1951] Ch 622 a testatrix left one-half of
her residuary estate upon ultimate trusts for such of the relations of her son and daughters as the survivor of

p. 185 her ↵ son and daughters shall deem to be ‘in needy circumstances’. The Court of Appeal held that the
disposition was a valid charitable trust for the relief of poverty because the gift was for a class of poor persons.

Re Scarisbrick was approved by the House of Lords in Dingle v Turner [1972] AC 601. There the testator gave his
residuary estate to trustees upon trust for his wife for her life and thereafter to place £10,000 on trust ‘to
apply the income thereof in paying pensions to poor employees of E Dingle & Co Ltd’ who were old or

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disabled. It was held that the terms of the will created a valid charitable trust for the relief of poverty, despite
the personal nexus between the beneficiaries and the named company. In the case of trusts for the relief of
‘poverty’ the distinction between a public charitable trust and a private non-charitable trust depended upon
whether, on a true construction of the gift, it was for the relief of poverty amongst a particular description of
poor people or was merely a gift to particular poor persons.

Trusts for the benefit of ‘poor relations’ had been accepted as charitable for more than 200 years when the
House of Lords heard Dingle v Turner, but trusts for ‘poor employees’ had only been recognised since around
1900 (Re Gosling (1900) 48 WR 300). It was suggested in argument that the poor relations cases were an
established anomaly and should not be disturbed, but that trusts for poor employees should not be afforded
the same respect. The House of Lords rejected this suggestion, as it would lead to ‘illogical’ distinctions
between different types of poverty.

The requirement of public benefit introduced by the 2006 Act should in the future prevent trusts such as the
one in Re Segelman from gaining charitable status. In Re Segelman [1996] 2 WLR 173 the court recognised the
charitable status of a trust for the ‘poor and needy’ of a class comprising at the time of the hearing a mere 26
people related to the testator, a multi-millionaire. These 26 were for the most part ‘comfortably off’ (although
the court accepted that they might need financial assistance to ‘overcome an unforeseen crisis’). Chadwick J
held that, although this case very nearly infringed the rule that relief should not be restricted to named
individuals, it was saved by the inclusion within the class of after-born issue of the 26 identified beneficiaries,
thereby raising the possibility of quite substantial numbers of additional beneficiaries who might themselves
be, or become, poor.

8.2.4 The advancement of education (head ‘b’)

I call … a complete and generous education that which fits a man to perform justly, skilfully and
magnanimously all the offices both private and public, of peace and war.

John Milton, On Education, 1673

Amongst the catalogue of charitable uses appearing in the preamble to the Statute of Elizabeth, reference is
made to ‘Schools of Learning and Scholars in Universities’. In fact the class of educational charitable trusts
now includes museums, nursery schools, scholarly societies, trusts for industrial and technical training and
trusts for the promotion of the arts.

Thinking point

Can you think of any educational charities of which you are a beneficiary?

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If you are a student at a university in the UK your institution will have charitable status (even private

p. 186 universities have charitable status). As a law student there is at least one further ↵ educational charity of
which you are a beneficiary—provided that you read law reports! The House of Lords in Incorporated Council
of Law Reporting for England and Wales v A-G [1972] Ch 73 agreed that the production and publication of
Official Law Reports by the Incorporated Council of Law Reporting for England and Wales was a charitable
activity. Their Lordships were unanimous in holding that the trust was charitable, with two of the five
holding the primary purpose of the society to be the advancement of education. The suggestion that the law
reports were merely a tool of the lawyer’s trade was sharply dismissed as being as untenable as the
suggestion that charitable trusts for the development of medicinal drugs exist only to promote the medical
profession. Sachs LJ referred once again to the disjunction between the popular and the legal meaning of the
word ‘charity’, stating that ‘it is … necessary to eliminate from one’s mind a natural allergy, stemming simply
from the popular meaning of “charity”, to the idea that law reporting might prove to be a charitable activity’.
In reaching this conclusion their Lordships echoed the words of the Rt Hon Edmund Burke who in 1816
opined that ‘to put an end to reports, is to put an end to the law of England’.

[Link] Educative value of research

George Bernard Shaw’s trust for research into a new English alphabet failed as a charitable trust for the
advancement of education (see 7.1). 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’. Perhaps the judge
had in mind the words of St Paul: ‘knowledge puffeth up, but charity edifieth’. Shaw’s trust was a trust for
private purposes and therefore failed (see 7.1).

In contrast, the testamentary gift in Re Hopkins [1965] Ch 669 was held to be charitable because of the
importance of the research that was being carried out. The testatrix had left a third of her residuary estate to
the Francis Bacon Society, to be ‘applied towards finding the Bacon–Shakespeare manuscripts and in the
event of the same having been discovered by the date of my death then for the general purposes of the work
and propaganda of the society’. The society, which was a registered charity under the Charities Act 1960,
existed primarily to study the evidence for Francis Bacon’s authorship of plays commonly ascribed to William
Shakespeare. It was held that for a gift for research to be charitable it must be combined with teaching or
education, albeit the education of the researchers themselves. Wilberforce J held that it did not matter that the
charitable purposes might not fall neatly into any one only of the four heads of charity. He considered the
possibility that the research might fall within the general head of charities ‘beneficial to the community’, and
stressed that ‘benefits’ need not be material and would include intellectual or artistic benefits. According to
virtually all Shakespearean scholars, the hypothesis that Francis Bacon wrote Shakespeare’s plays borders on
the ridiculous. One might ask whether such whimsical research should be charitable, but it is the fact that the
law does not prejudge the merit of particular research (or particular religion) that makes the law of charity
truly charitable in spirit.

The Amnesty International organisation set up a trust to administer those of its purposes which were
considered to be charitable. Its aims included the release and humane treatment of prisoners of conscience,
research into the observance of human rights and the dissemination of the results of such research. It applied
to the Charity Commissioners for registration of the trust as a charity under s 4 of the Charities Act 1960.

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Registration was refused (McGovern v Attorney-General [1982] 1 Ch 321). On appeal to the High Court, Slade J
confirmed the Commissioners’ decision. The major part of the trust purposes was of a political, and therefore
non-charitable, nature (see 8.2.17). However, had the provisions as to research stood alone they would have
been charitable. The subject matter of the research was ‘capable of adding usefully to the store of human
knowledge’. His Lordship noted that human rights has become an accepted academic discipline, and stated
that it should be benignly presumed that the trustees would not implement the research in a political
manner.

p. 187 [Link] The public benefit requirement in educational trusts

The key case is the decision of the House of Lords in Oppenheim v Tobacco Securities Trust Co Ltd [1951] AC
297. In that case a settlement directed trustees to apply the income from the trust fund ‘in providing for … the
education of children of employees or former employees of the British–American Tobacco Co Ltd … or any of
its subsidiary or allied companies in such manner … as the acting trustees shall in their absolute discretion …
think fit’. The employees referred to numbered more than 110,000. The issue was whether the class of
potential beneficiaries constituted a sufficient section of the general public. It was held by the majority that,
despite the huge number of potential beneficiaries, they were identified by the personal nexus between them
and the employer company. Accordingly, the trust did not satisfy the requirement that it produce a benefit to
a sufficient section of the community. The words ‘section of the’ community have no special meaning, but
they indicate, first, that the possible beneficiaries must not be numerically negligible, and secondly, that they
must not be distinguishable from other members of the public by reason of a relationship to a particular
individual.

Thinking point

Would a trust to establish a school in a small mining village be charitable if the education it provided
was limited to children of employees of the mining company?

According to the majority in Oppenheim it would not. Against this, Lord Cross of Chelsea had this to say in
Dingle v Turner [1972] AC 601:

That reasoning—based on the distinction between personal and impersonal relationships—has

never seemed to me very satisfactory and I have always—if I may say so—felt the force of the
criticism to which my noble and learned friend Lord MacDermott subjected it in his dissenting
speech in the Oppenheim case. For my part I would prefer to approach the problem on far broader
lines … with the bare contrast between ‘public’ and ‘private’ … One might say that … the employees in
such concerns as ICI or GEC are just as much ‘sections of the public’ as the residents in some
geographical area.

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[Link] Preferences

Thinking point

Imagine that you are the Charity Commission. You have received an application to register a
charitable trust in the following terms: ‘for the promotion and furtherance of commercial education
of persons of either sex who are British born subjects who are desirous of educating themselves or
obtaining tuition for a higher commercial career, but whose means are insufficient or will not allow of
their obtaining such education or tuition at their own expense; in selecting beneficiaries it is my wish
that the charity trustees shall give a preference to any employees of J Co Ltd or any members of the
families of such employees; failing a sufficient number of beneficiaries under such description then
the persons eligible shall be any persons of British birth as the charity trustees may select. Provided
that the total income to be available for benefiting the preferred beneficiaries shall not in any one year
be more than seventy-five per cent of the total available income for such year.’ Would you grant the
application?

p. 188 ↵ The facts set out in the thinking point reproduce almost exactly the trust that was considered in Re
Koettgen [1954] Ch 252. Surprising as it may seem, Upjohn J held that the trust was a charitable one, despite
the preference. His Lordship held that the primary class of beneficiaries was sufficiently large to satisfy the
public benefit requirement for educational trusts and that the direction to prefer could not affect the validity
of the primary trust given that it was not certain that the preferred class would exhaust 75 per cent of the
fund in any year. However, if the direction to ‘prefer’ a class is made in absolute, imperative terms, so as to
elevate the preferred class to the status of primary class of beneficiaries, the trust will only be charitable if the
preferred class is itself large enough to constitute a sufficient section of the public. A trust for the education of
‘deserving youths of the Islamic faith’, which directed the trustees to grant an absolute priority to the settlor’s
family, failed as a charitable trust (Caffoor v Commissioners of Income Tax [1961] AC 584, PC). Crucial to the
decision in Re Koettgen was the fact that it could not be said that the trustees would actually apply a full 75 per
cent of the income in favour of the preferred class in any given year.

Thinking point

Would it still be a charitable trust if the trustees did in fact exercise their power to favour the preferred
class in this way?

This is what occurred in IRC v Educational Grants Association Ltd [1967] Ch 123. In that case the Inland
Revenue successfully challenged an educational association which had very close links with a commercial
company (the principal donor to the Association). Evidence showed that 76 to 85 per cent of the association’s
income had been applied to educate the children of persons connected with the commercial company. Despite

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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. Pennycuick J
criticised and distinguished Re Koettgen and decided in favour of the IRC. The Court of Appeal upheld his
judgment, but without airing any opinion of Re Koettgen. The present status of Re Koettgen is therefore
somewhat uncertain. The Charity Commissioners have followed Re Koettgen and registered similar trusts on
a few occasions, but the Annual Report of the Charity Commissioners warned (in their 1978 report) that the
‘application of too large a proportion of the income would constitute an application for non-charitable
purposes’.

8.2.5 The advancement of religion (head ‘c’)

As you progress through this section it may be helpful to distinguish religious beliefs from religious
practices. A belief may be religious but it will not be charitable unless it is backed up by practices which
benefit the public.

[Link] What is religion?

some useful terms

‘Monotheism’ is belief in one God; ‘polytheism’ is belief in more than one god; ‘atheism’ is belief in no
god at all and ‘agnosticism’ is a belief that neither affirms nor denies the existence of a God or gods.

Before the Charities Act 2006 it was apparent that atheistic and agnostic beliefs were not to be considered

p. 189 religious. In Barralet v Attorney-General (Re South Place Ethical Society) Dillon J held ↵ that ‘religion’ is
concerned with mankind’s relations with God or gods, whereas ethics is concerned with relations between
humans only. Without belief in a supernatural entity, faith could not properly be described as religious, no
matter how sincerely held. The view held in America that a religion is any belief occupying in the life of the
possessor a place parallel to that occupied by belief in God prompted the judge to remark that ‘parallels, by
definition, never meet’. The judge suggested, further, that worship of God or gods was essential to religion,
and worship in that sense had no place between humans, and accordingly no place in a humanist ethical
system of belief. According to the Charities Act 2006 (now the 2011 Act) the charity law meaning of ‘religion’
should now be taken to include not only monotheism and polytheism, but even some atheistic or, more
properly, ‘non-deistic’, religions such as Buddhism. Express inclusion of ‘non-deistic’ religions brings the UK
definition of religion more closely (but not exactly) in line with the US definition described earlier. Other
requirements summarised by the Charity Commission are ‘a relationship between the believer and the
supreme being or entity by showing worship of, reverence for or veneration of the supreme being or entity’;
‘a degree of cogency, cohesion, seriousness and importance’ and ‘an identifiable positive, beneficial, moral or
ethical framework’. Applying these criteria, the Charity Commission decided on 21 September 2010 that ‘The
Druid Network’ should be registered as an unincorporated association that exists for the purpose of
advancing religion for the public benefit. According to its adherents, modern ‘Druidry’ is principally

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concerned with ‘the spiritual interaction between an individual and the spirits of nature, including those of
landscape and ancestry, together with the continuities of spiritual, literary and cultural heritage’. What isn’t
clear is where the line should be drawn (if indeed a line should be drawn) when taking account of ‘literary and
cultural heritage’. Consider the following ‘thinking point’.

Thinking point

Is Shakespearism a religion? It has a revered book (William Shakespeare’s Complete Works), Stratford-
upon-Avon is a focal point for international pilgrimage and the rituals of the religion are performed
daily in dedicated temples around the globe (including the Globe itself). Dominic Dromgoole, the
Artistic Director of the Globe Theatre, professes the faith in Will & Me: How Shakespeare Took Over My
Life (Penguin, 2006): ‘Stratford was electrifying … we went to his tomb and liked it so much we went
back twice more … I was a Catholic in Rome, a Moslem in Mecca.’

George Bernard Shaw, whom we encountered under the previous head of charity, was a confirmed agnostic.
In the preface to volume 2 of Plays Pleasant and Unpleasant (1898) he opined that ‘there is only one religion,
though there are a hundred versions of it’. Absent the cynicism, the courts have taken a similarly liberal
approach to the recognition of religion (see next).

Case close-up

Thornton v Howe [1862] 31 Beav 14

Facts: the court considered a gift of land which had been made to assist in the promotion and
publication of the ‘sacred writings of the late Joanna Southcote’. She had claimed that she was with
child by the Holy Spirit and would give birth to a Second Messiah.

p. 190 ↵ Held: the Master of the Rolls described her as ‘a foolish ignorant woman’ but nevertheless held
that the gift was a charitable gift for the advancement of religion.

Romilly MR: ‘the Court of Chancery makes no distinction between one religion and another … [or] one
sect and another … [unless] the tenets of a particular sect inculcate doctrines adverse to the very
foundations of all religions and … subversive of all morality … If the tendency were not immoral and
although this Court might consider the opinions sought to be propagated foolish or even devoid of
foundation the trust would nevertheless be charitable. If the decision seems a surprising one, its
context should be borne in mind. As a charitable gift of land, it failed under the Statute of Mortmain
(now repealed) and passed to the donor’s heir.’

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Thornton v Howe was followed in Re Watson [1973] 1 WLR 1472. There the testatrix left her estate ‘for the
continuance of the work of God as it has been maintained by Mr HG Hobbs and myself since 1942 by God’s
enabling … in propagating the truth as given in the Holy Bible …’ Hobbs (a retired builder) predeceased the
testatrix but had written a number of religious tracts during his lifetime. His publications were regarded by
experts as being unlikely to extend the knowledge of the Christian religion, but quite likely to confirm, in the
group who had produced the publications, their own religious opinions. The trust was held to be a valid
charitable trust for the advancement of religion.

It is clear from these judgments that all religions are regarded equally by the courts. Indeed, generally
speaking courts do not profess to pass judgment on religious claims. (Although in Khaira v Shergill [2014]
UKSC 33, where one of the questions was whether a person was ‘holy’ according to the Sikh religion, the
Supreme Court confirmed that although ‘courts do not adjudicate on the truth of religious beliefs or on the
validity of particular rites’, ‘the judge may have to determine such religious issues as are capable of objective
ascertainment’ where a claimant asks the court to enforce private rights and obligations which depend on
religious issues (para. [45])). It is also obvious that the courts regard any religion as better than none (if they
did not, it would be difficult to justify their charitable status on public benefit grounds); indeed, Cross J said as
much in Neville Estates v Madden [1962] Ch 832. What is not entirely clear is what belief systems count as
‘religions’.

Is ancestor worship a religious practice? In Yeap Cheah Neo v Ong Chen Neo (1875) LR 6 PC 381 the Judicial
Committee of the Privy Council held that it is not, giving two main reasons. First, worship of human
ancestors did not involve the worship of a deity and could not therefore be described as being a religion.
Secondly, on the terms of the particular trust there was no assurance that the worship would produce a
sufficient public benefit (Gilmour v Coats [1949] AC 426 (see [Link])).

Is faith healing a religious practice? In Funnell v Stewart [1996] (Re Le Cren Clarke) 1 WLR 288 it was held that
faith healing could be charitable under either the category of advancement of religion or other purposes
beneficial to the community. The private religious services of the group were ancillary to their work for the
public benefit, and many of their services were open to the public.

[Link] The public benefit requirement in trusts for the advancement of religion
In Gilmour v Coats [1949] AC 426 £500 was settled upon trust for the purposes of the Carmelite Priory, a
community of strictly cloistered nuns. The nuns devoted themselves to prayer, meditation, fasting, penance

p. 191 and self-sanctification. They conducted private religious services, ↵ but were not engaged in any good
works outside of the convent. Do you think that the nuns’ activities were for the benefit of the community?
Your answer to this will probably depend upon whether you believe in the power of prayer! The House of
Lords held that the trust for the purposes of the cloistered community did not satisfy the public benefit.
Accordingly, this was not a valid charitable trust for the advancement of religion. The potential for religious
edification of others through the example set by the nuns was said to be too vague. Nor did their Lordships
accept the argument, made by analogy to educational trusts, that the public benefit requirement had been
met through the fact that membership of the community was potentially open to any woman in the whole
world. Lord Simonds made the following general observation: ‘the law of charity … has been built up not

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logically but empirically … To argue by a method of syllogism or analogy from the category of education to
that of religion ignores the historical processes of law.’ Gilmour v Coats was distinguished in Neville Estates Ltd
v Madden [1962] Ch 832.

Case close-up

Neville Estates Ltd v Madden [1962] Ch 832

Facts: the company claimed specific performance of a contract for the sale of land owned by a
synagogue. The trustees of the synagogue claimed that the synagogue existed for charitable purposes
and that the consent of the Charity Commissioners would be required before the sale could proceed.

Held: the synagogue’s purposes were charitable.

Cross J: ‘the trust with which I am concerned resembles that in Gilmour v Coats [1949] AC 426 in this,
that the persons immediately benefited by it are not a section of the public but the members of a
private body. All persons of the Jewish faith living in or about Catford might well constitute a section
of the public, but the members for the time being of the Catford Synagogue are no more a section of
the public than the members for the time being of a Carmelite priory. The two cases, 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. If once one refuses to pay
any regard—as the courts refused to pay any regard—to the influence which these nuns living in
seclusion might have on the outside world, then it must follow that no public benefit is involved in a
trust to support a Carmelite priory. As Lord Greene MR said in the Court of Appeal: “Having regard to
the way in which the lives of the members were spent, the benefit was a purely private one”. But the
court is, I think, entitled to assume that some benefit accrues to the public from the attendance at
places of worship of persons who live in this world and mix with their fellow citizens. As between
different religions the law stands neutral, but it assumes that any religion is at least likely to be better
than none.

But then it is said—and it is this part of the argument that has caused me the greatest difficulty: But
this is a case of self help. Suppose that a body of persons, being dissatisfied with the facilities for the
education of small children provided in their district, form an association for the education of the
children of members …

I feel the force of this analogy; but, as Lord Simonds pointed out in Gilmour v Coats, it is dangerous to
reason by analogy from one head of charity to another.’

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p. 192 ↵ In the Pemsel case, mentioned earlier, Lord Bramwell cast doubt on a trust to proselytise: ‘What of a
trust for the conversion of the Jews? Is that a charitable purpose? If so, what of a trust for their reconversion?’
He concluded that this was not a charitable purpose. Lord Herschell in the same case observed, somewhat
cynically, that ‘You may desire to convert the richest people, and very often do … A religious object is not
necessarily a charitable object.’

proselytise

‘To convert or attempt to convert (someone) from one religion, belief, or opinion to another’ (The
Oxford Dictionary of English, 2nd edn, Oxford: Oxford University Press, 2003).

[Link] Churches and churchyards

The preamble to the Statute of Elizabeth 1601 lists amongst charitable uses ‘Repair of Bridges, Ports, Havens,
Causeways, Churches’. Inspired by this, the courts have recognised as charitable trusts for the maintenance of
a churchyard (Re Douglas [1905] 1 Ch 279) and for the erection, to the memory of the testatrix and her
relations, of a stained glass window in a parish church (Re King [1923] 1 Ch 243).

Cross reference

A trust for the maintenance of a particular tomb or grave is not charitable, although it could take effect
as a trust of imperfect obligation (Re Hooper [1932] 1 Ch 38 (see 7.2.1)).

8.2.6 The advancement of health or the saving of lives (head ‘d’)

The advancement of health includes the prevention or relief of sickness, disease or human suffering. A gift
for the purposes of a hospital is prima facie a good charitable gift under this head, but the presumption could
be rebutted if evidence showed that the hospital was carried on commercially for the benefit of private
individuals. In Resch’s Will Trusts [1969] 1 AC 514 the testator left his residuary estate (then valued at around
eight million Australian dollars) to trustees upon trust to pay two-thirds of the income ‘to the Sisters of
Charity for a period of 200 years so long as they shall conduct the St Vincent’s Private Hospital’. The hospital
did not seek to make a commercial profit, but its charges for treatment, whilst not necessarily excluding the
poor, were not low. The Privy Council held that it was a valid charitable trust for purposes beneficial to the
community. The requisite public benefit had been satisfied because evidence showed that the public needed
accommodation and treatment of the type provided by the hospital. Other purposes falling under this head
include charities that provide ‘complementary’ or ‘alternative’ medical treatment or health-related services
such as research and hospital radio, and even (according to the Charity Commission website) self-defence
classes.

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8.2.7 The advancement of citizenship or community development (head ‘e’)

Head ‘c’ having effectively defined religion out of existence, head ‘e’ threatens to replace it with a new secular
cult of ‘citizenship’. Organisations which promote belief in citizenship will henceforth attract charitable
support. It hardly seems to matter that individual and ‘community’ notions of citizenship vary according to
individual beliefs and the nature of communities, and still less that in the UK we are not merely citizens, but
also (primarily) subjects of the Crown. However, one suspects that the labels ‘citizenship’ and ‘community
development’ may be nothing more than political rhetoric. The Act itself equates it with such mundane aims
as ‘rural or urban regeneration’ and ‘the promotion of civic responsibility, volunteering, the voluntary sector
or the effectiveness or efficiency of charities’.

p. 193 8.2.8 The advancement of arts, culture, heritage or science (head ‘f’)
When Lord Greene MR held that the Royal Choral Society is charitable, he opined that ‘the education of
artistic taste is one of the most important things in the development of a civilised human being’ (Royal Choral
Society v IRC [1943] 2 All ER 101 at 104). If by ‘artistic taste’ the Master of the Rolls was referring to ‘critical
appreciation’, there can be little doubt that the cultivation of critical appreciation is as beneficial in the field of
art as it is in the fields of science or law. However, if by ‘artistic taste’ the Master of the Rolls meant ‘artistic
good taste’ the concept becomes a highly subjective one, and hardly the proper subject matter for
determination by a court.

Case close-up

Re Pinion [1965] Ch 85, Court of Appeal

Facts: the testator left his freehold studio, together with his paintings and some antique furniture,
silver, china, etc, to be offered to the National Trust to be kept together as a collection. The income
from his residuary estate was left to be used for the maintenance of the collection. In the event that
the National Trust might decline the gift, his executors were directed to keep the collection as a
museum.

Held: that this was not a valid trust for the advancement of education.

Harman LJ: ‘For myself a reading of the will leads me rather to the view that the testator’s object was
not to educate anyone … there is a strong body of evidence here that as a means of education this
collection is worthless. The testator’s own paintings, of which there are over fifty, are said by
competent persons to be in an academic style and ‘atrociously bad’ and the other pictures without
exception to be worthless … Indeed one of the experts expresses his surprise that so voracious a
collector should not by hazard have picked up even one meritorious object. The most that a skillful
cross-examination extracted from the expert witnesses was that there were a dozen chairs which

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might perhaps be acceptable to a minor provincial museum and perhaps another dozen not altogether
worthless, but two dozen chairs do not make a museum and they must, to accord with the will, be
exhibited stifled by a large number of absolutely worthless pictures and objects.

It was said that this is a matter of taste, and de gustibus non est disputandum [an opinion cannot be
disputed], but here I agree with the judge that there is an accepted canon of taste on which the court
must rely, for it has itself no judicial knowledge of such matters, and the unanimous verdict of the
experts is as I have stated. The learned judge with great hesitation concluded that there was that
scintilla of merit which was sufficient to save the rest. I find myself on the other side of the line. I can
conceive of no useful object to be served in foisting on the public this mass of junk. It has neither
public utility nor educative value. I would hold that the testator’s project ought not to be carried into
effect and that his next-of-kin is entitled to the residue of his estate.’

In Re Delius, the widow of Frederick Delius, the composer, left her residuary estate to trustees upon trust to
apply the income therefrom ‘for or towards the advancement … of the musical works of my late husband
under conditions in which the making of profit is not the object to be attained … by means of the recording
upon the gramophone or other instrument for the mechanical reproduction of music of those works … the

p. 194 publication and issue of a uniform ↵ edition of the whole body of the works … and … the performance in
public of the works’. Roxburgh J held that the trusts were valid charitable trusts for the advancement of
education. The court did not have to make a value judgment in this case because counsel on both sides were
unanimous in their view that the standard of Delius’s work was very high. The judge did not consider what he
might have decided had the works been of an ‘inadequate composer’; he mused that ‘perhaps I should have no
option but to give effect even to such a trust’, although later in his judgment he did state, obiter, that ‘if it is
charitable to promote music in general it must be charitable to promote music of a particular composer,
presupposing … that the composer is one whose music is worth appreciating!’

The fact that the trust would incidentally enhance the reputation of Delius and bring pleasure to listeners was
not a reason for denying the charitable nature of the trust. It was, however, crucial to the success of the case
that the residuary legatee was held to have no possibility of profiting personally from the trusts.

In Re Pinion the court was able to avoid the need to form a purely subjective value judgment on the merits of
the art by the admission of expert evidence. In that case the experts concluded that the collection had no
value as a means of education.

8.2.9 The advancement of amateur sport (head ‘g’)

In this context, ‘sport’ must involve physical or mental skill or exertion. Sports such as chess may also be
charitable if they are educational (e.g. Re Dupree’s Deed Trusts [1945] Ch 16) or ‘promote health by involving …
mental skill or exertion’ (Charities Act 2006 s 2(3)(d)). School sports, such as football trusts, are also better
considered under the educational head (e.g. IRC v McMullen [1981] AC 1, which concerned the FA Youth Trust
created by the Football Association in 1972). The word ‘sport’ is derived from the word ‘disport’, which is
itself derived from the French porter, ‘to carry’. Literally, sport is that which carries one off, that which acts as
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a diversion from work and the mundane, so when for amusement we read about ‘sport’ on the back pages of
our daily newspapers and watch it on our televisions it is we, and not the professionals whom we observe,
who are the ones engaged in sport! Clearly the professional pursuit of ‘sport’ for personal profit will not be
charitable. George Orwell once famously wrote that ‘serious sport has nothing to do with fair play. It is bound
up with hatred, jealousy, boastfulness, and disregard of all the rules’ (Shooting an Elephant (1950)). Amateur
sport, in contrast, is bound up with health, teamwork and fair play. Community Amateur Sports Clubs
(CASCs) enjoy special tax status under Schedule 18 of the Finance Act 2002.

8.2.10 The promotion of human rights, conflict resolution or reconciliation or

the promotion of religious or racial harmony or equality and diversity (head ‘h’)

Thinking point

This set of aims is laudable, but does it look more like a political manifesto than a charitable category?
Will it fall foul of the general prohibition on political charities (see 8.2.17)? Might the promotion of
certain human rights and the promotion of religious harmony conflict with each other? (Consider, for
example, the case of Roman Catholic adoption agencies and adoption by homosexual couples.)

p. 195 8.2.11 The advancement of environmental protection or improvement (head

‘i’)
This is another laudable purpose, but again one which is potentially highly political and liable to irritate the
government. There are also problems of definition. If a woodland is replaced by a thousand new homes
equipped with solar panels, charities such as the Woodland Trust will no doubt object but charities promoting
solar power might approve.

8.2.12 The relief of those in need, by reason of youth, age, ill-health, disability,
financial hardship or other disadvantage (head ‘j’)
The preamble to the Statute of Elizabeth I 1601 refers to the relief of ‘the aged, the impotent and poor’. In
Pemsel Lord Macnaghten read this phrase disjunctively when he isolated the relief of poverty within the first
of his four heads of charity. However, a trust under this head may not be charitable if it excludes the poor (Re
MacDuff [1896] 2 Ch 446). After all, we would not expect a trust for the relief of aged millionaires to be
charitable! On the other hand, an incidental financial benefit might be permitted. Joseph Rowntree Memorial
Trust Housing Association Ltd v Attorney-General [1983] 2 WLR 284 concerned a charitable housing association
which desired to build individual dwellings for sale to elderly people on long leases in consideration of a
capital payment. On the tenant’s death the lease would be assigned to the tenant’s spouse or a family
member, provided that person was also elderly. Failing such an assignment the lease would revert to the

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association, who would pay to the tenant’s estate 70 per cent of the then current market value of the lease.
The Charity Commissioners objected to the scheme on the grounds, inter alia, that it operated by way of
contract, benefited private individuals rather than a charitable class and could produce a financial profit for
those individuals. In the Joseph Rowntree case it was held that the scheme was a valid charitable scheme for
the relief of the aged notwithstanding the objections of the Charity Commissioners.

Also falling under this head, according to the Charity Commission website, are such purposes as ‘children’s
care homes’; ‘apprenticing’; ‘senior citizens’ drop-in centres’; ‘the relief of disability’ and the ‘provision of
housing’.

8.2.13 The advancement of animal welfare (head ‘k’)

Trusts for specific animals must be distinguished from trusts for animals generally. A trust for animals
generally may be charitable: examples include a trust to establish a home for lost dogs (Re Douglas (1887) 35
ChD 472) and a trust for animal welfare (Re Wedgwood [1915] 1 Ch 113). However, a bequest to the faithful dog
Fido will not be charitable. It might, though, take effect as a private purpose trust of imperfect obligation (see,
for example, Re Dean at 7.2.2).

The reason for recognising the charitable status of trusts for the benefit of animals generally was said by
Swinfen-Eady LJ in Re Wedgwood [1915] 1 Ch 113 at 122 to be that the trust would ‘tend to promote and
encourage kindness towards [animals], and to ameliorate the condition of the brute creation, and thus to
stimulate humane and generous sentiments in man towards the lower animals, and by this means to promote
feelings of humanity and thus elevate the human race’.

A trust to provide an animal sanctuary where wild animals could thrive without the intrusion of people failed
because it did not appear to prevent cruelty to animals or in any other way provide an elevating lesson to
mankind; on the contrary, the wild animals would be free to molest each other (Re Grove-Grady [1929] 1 Ch

p. 196 557). It may be that the Court of Appeal also harboured an ↵ objection to the fact that all the officials of
the society had to be anti-vivisectionists and opponents of all blood sports (including angling).

Thinking point

Do you think that an anti-vivisection society should have charitable status under this head of charity?

This was the issue before the House of Lords in National Anti-Vivisection Society v IRC [1948] AC 31. The
society had claimed to be exempt from income tax as being ‘a body of persons established for charitable
purposes only’. It was held that the society was not charitable because it failed the overriding test of
charitable status, i.e. whether the purposes of the organisation existed for the public benefit. It was held that,
on balance, the object of the society was detrimental to the public benefit (Lord Porter dissenting). Further, a

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prime object of the society was political, namely, to secure the repeal of the Cruelty to Animals Act 1876 and to
see it replaced by an enactment absolutely prohibiting vivisection. The court could not award charitable
status to a trust for a political purpose (see 8.2.17).

The front page of the Daily Telegraph on 7 February 1998 carried the headline: ‘RSPCA drops animal rights
after threat to charity status.’ In the article the reporter noted that the RSPCA had withdrawn a key policy
statement declaring support for ‘animal rights’ following warnings from the Charity Commissioners that it
breached the society’s charitable status. Another borderline case is the Wolf Trust, which seeks to promote
the reintroduction of wolves into the Highlands of Scotland, which at present is generally prohibited under
the s 14(1) of the Wildlife and Countryside Act 1981 (it may be licensed by the Secretary of State for Scotland).
Is such a trust charitable, as being for the public benefit? Does it infringe the prohibition on charities
established for political objects? (See 8.2.17.) The Charity Commissioners for England and Wales refused to
register the trust on the ground that it was political (30 January 2003), but the trust has since been registered
as a charity in Scotland (SC 035926).

8.2.14 The promotion of the efficiency of the armed forces of the Crown or of
the efficiency of the police, fire and rescue services or the ambulance services
(head ‘l’)
The preamble to the Statute of Elizabeth refers to ‘Maintenance of sick and maimed Soldiers and Mariners’
and to the ‘setting out of Soldiers and other Taxes’. In the Pemsel case Lord Macnaghten cited ‘support for a
lifeboat’ as an example of a charitable purpose. It would now fall under this head. It has also long been
recognised as charitable to promote the well-being of the fire service (Re Wokingham Fire Brigade Trusts
[1951] Ch 373) and the police force (IRC v City of Glasgow Police Athletic Association [1953] AC 380), although
now that the police have more armed officers and coercive powers than ever before it has become politically
expedient to refer to the police force as the ‘police service’. The phrase ‘fire and rescue services’ under the new
head ‘l’ means services provided by fire and rescue authorities under Part 2 of the Fire and Rescue Services
Act 2004 (c. 21).

8.2.15 Other existing charitable purposes or analogous charitable purposes

(head ‘m’)
Not every trust purpose which is beneficial to the community will fall within this residual category and
thereby qualify as a charitable purpose. Every purpose within this head must still fall within the ‘spirit and

p. 197 intendment’ of the preamble to the Statute of Elizabeth (per Sir William ↵ Grant MR in Morice v Bishop of
Durham (1804) 9 Ves 399 at 405). Russell LJ in Incorporated Council of Law Reporting v A-G [1972] Ch 73 at 88
described this as ‘a line of retreat … in case [the courts] 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’.

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In later centuries it has indeed become clear that not all that is beneficial to the public is charitable. In 1976
the Goodman Committee stated that ‘many things which are far removed from charity may benefit the
community. For instance, a highly successful commercial venture, generating exports and providing massive
employment is of immense benefit to the community but it is not charitable.’ Lord Macnaghten in Pemsel
stated, in similar vein, that ‘A layman would probably be amused if he were told that a gift to the Chancellor of
the Exchequer for the benefit of the nation was a charity’ (para. 27).

Thinking point

Could it be that those activities recognised by the courts to be for the public benefit are activities
which the State would have to finance were they not supported from private funds? Take, for
example, the provision of cremation services (see Scottish Burial Reform and Cremation Society Ltd v
Glasgow Corpn at 8.2.2), private hospitals (see 8.2.6) and ‘retraining and assistance to the
unemployed’ (IRC v Oldham Training and Enterprise Council [1996] STC 1218).

8.2.16 Recreational charities

The Recreational Charities Act 1958 was a response to the decision of the House of Lords in IRC v Baddeley
[1955] AC 572. In that case, land, including a mission church, lecture room and store, was given to trustees on
trust to permit the leaders of the mission to promote thereon ‘the religious, social and physical well-being of
persons resident in the county boroughs of West Ham and Leyton … by the provision of facilities for religious
services and instruction and for the social and physical training and recreation of such aforementioned
persons who for the time being are in the opinion [of the leaders of the mission] members of or likely to
become members of the Methodist Church’.

The House of Lords held that the trust was not for the relief of poverty, for ‘relief’ implied the meeting of a
need or quasi-necessity, such as the provision of a dwelling. Nor could the trust be charitable as being for a
purpose beneficial to the community. The trust did not benefit a sufficient section of the public because the
beneficiaries had been selected not only by reference to a particular geographical area, but by the further
condition that they share a particular creed. Further, promotion of ‘religious, social and physical well-being’
was too wide a statement of the trust’s objects, and accordingly the trust would be void for potentially
including non-charitable purposes.

Statute

Charities Act 2011, s 5 (replacing the Recreational Charities Act 1958)

5. Recreational and similar trusts, etc.

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(1) It is charitable (and is to be treated as always having been charitable) to provide, or assist
in the provision of, facilities for—

(a) recreation, or

p. 198 (b) other leisure-time occupation,

if the facilities are provided in the interests of social welfare.

(2) The requirement that the facilities are provided in the interests of social welfare cannot
be satisfied if the basic conditions are not met.

(3) The basic conditions are—

(a) that the facilities are provided with the object of improving the conditions of life for
the persons for whom the facilities are primarily intended, and

(b) that—

(i) those persons have need of the facilities because of their youth, age, infirmity or
disability, poverty, or social and economic circumstances, or

(ii) the facilities are to be available to members of the public at large or to male, or
to female, members of the public at large.

(4) Subsection (1) applies in particular to—

(a) the provision of facilities at village halls, community centres and women’s institutes,
and

(b) the provision and maintenance of grounds and buildings to be used for purposes of
recreation or leisure-time occupation, and extends to the provision of facilities for
those purposes by the organising of any activity.
But this is subject to the requirement that the facilities are provided in the interests of
social welfare.

(5) Nothing in this section is to be treated as derogating from the public benefit requirement.

Charities Act 2011, s 5 (replacing the Recreational Charities Act 1958) recognises as charitable the provision of
(or assistance in the provision of) facilities for recreation or other leisure time occupation if the facilities are
provided in the interests of social welfare. This requirement can be established by one of two routes (see
Table 8.2).

Table 8.2 Recreational charities

Route one Route two

The provision of facilities for persons in need due to youth, age, The provision of facilities available to the members or
infirmity or disability, poverty or social and economic female, or male, members of the public at large
circumstances

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Route one Route two

With the object of improving the conditions of life for the persons With the object of improving the conditions of life for
for whom the facilities are primarily intended the persons for whom the facilities are primarily
intended

And for the public benefit And for the public benefit

The trust in Baddeley might have been valid under route one, to the extent that it provided facilities for

p. 199 persons in need due to their youth, were it not for the inclusion of other, potentially ↵ non-charitable
objects. In Re Guild [1992] 2 AC 310, a testator left the residue of his estate ‘to the town council of North
Berwick for the use in connection with the sports centre in North Berwick or some similar purpose in
connection with sport’. Do you think that this was a charitable purpose? The IRC claimed that the transfer of
value was liable to capital transfer tax. The executor appealed, claiming that the gift was for charitable
purposes and therefore exempt from the tax. The House of Lords held that, on a proper construction of s 1(2)
(a) of the Recreational Charities Act 1958, a gift for the provision of recreational facilities could be charitable
notwithstanding the fact that the intended beneficiaries were not in a position of social disadvantage and did
not suffer from any particular deprivation. Accordingly, the gift in the present case was a charitable one, the
facilities having been provided in the interests of social welfare. In construing the second part of the gift, ‘or
some similar purpose in connection with sport’, it should be presumed that the testator had intended those
other purposes to share the aspects of social welfare provision and public benefit which had been present in
the first part of the gift. Such a benignant construction should be applied to deeds whose wording was
ambiguous and susceptible to two constructions, one of which would render the trust void, the other of which
would render it a valid charitable trust.

[Link] Reform of the 1958 Act

The Charities Act 2006 amended ss 1 and 2 of the 1958 Act, to bring it in line with the European Convention
on Human Rights. Section 5(2) of the 2006 Act amended s 1(2) of the 1958 Act so that facilities made available
to men only are to be regarded as charitable on the same basis as facilities made available to the public as a
whole or to women only. Section 5(3) repealed s 2 of the 1958 Act. The effect of this is that miners’ welfare
organisations that can show that they are charitable under the definition of charity contained in Recreational
Charities Act 1958, s 1 (now Charities Act 2011, s 5) will retain their charitable status. Other miners’ welfare
organisations will not retain their charitable status.

8.2.17 Trusts for political purposes

Trusts for the promotion of one political party (Bonar Law Memorial Trust v IRC (1933) 49 TLR 220) and trusts
for the promotion of a particular political doctrine (Re Bushnell [1975] 1 WLR 1596) are not charitable, but
neither are trusts for purposes which might be considered ‘political’ in the sense that they seek a change in
the law. In Bowman v Secular Society Ltd [1917] AC 406 Lord Parker stated that ‘a trust for the attainment of

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political objects has always been held invalid, not because it is illegal … but because the court has no means of
judging whether a proposed change in the law will or will not be for the public benefit’. The prime reason for
refusing charitable status to trusts for political purposes is that courts, whose role it is to enforce the law of
Parliament, cannot sanction organisations whose role it is to change the law of Parliament (see National Anti-
Vivisection Society v IRC [1948] AC 31).

For these reasons Amnesty International was denied charitable status in McGovern v Attorney-General [1982]
1 Ch 321. Slade J held that a trust for the relief of human suffering was capable of being charitable, but not
where a direct and main object of the trust was to secure such relief through attempting to change the laws of
a foreign country. Such a trust would be a trust for a political purpose and as such would not be capable of
being a valid charitable trust. The judge stated that an English court has ‘no adequate means of judging
whether a proposed change in the law of a foreign country will or will not be for the public benefit’ of the
foreign community. The judge also pointed out the risk of prejudicing relations between the United Kingdom
and foreign states if English courts passed judgment on foreign regimes. The judge did acknowledge,

p. 200 however, that if the main objects of a charitable trust are ↵ non-political it will not cease to be charitable
if the trustees have the power to use political means to achieve those non-political ends.

In its response to the decision in that case, the Charity Commissioners gave, amongst others, the following
(somewhat depressing) guidelines to charity trustees:

The Annual Report of the Charity Commissioners, 1981

‘To avoid doubt being cast on the claim of the institution to be a charity, its governing instrument
should not include power to exert political pressure except in a way that is ancillary to a charitable
purpose … In general, what is ancillary is that which furthers the work of the institution, not
something that will procure the performance of similar work by, for example, the government of the
day’ (para. 54(ii)).

‘Charities, whether they operate in this country or overseas, must avoid … seeking to eliminate social,
economic, political or other injustice’ (para. 54(vii)).

In 1995 the Charity Commissioners issued a circular summarising the law in relation to charities and politics.
The Commissioners draw a fundamental distinction between political purposes and political activities. A
charitable organisation may be involved in the latter, but can never be established to achieve the former.

Political Activities and Campaigning by Charities, Leaflet CC 9, July 1995

‘Any political activity undertaken by trustees must be in furtherance of, and ancillary to, the charity’s
stated objects and within its powers’ (para. 8).

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‘To be ancillary, activities must serve and be subordinate to the charity’s purposes. They cannot,
therefore, be undertaken as an end in themselves and must not be allowed to dominate the activities
which the charity undertakes to carry out its charitable purposes directly. The trustees must be able to
show that there is a reasonable expectation that the activities will further the purposes of the charity,
and so benefit its beneficiaries to an extent justified by the resources devoted to those activities’ (para.
9).

Thinking point

Is it really possible to reconcile the prohibition on political proposes with the supposed charitable
status of such purposes as ‘the resolution of national or international conflicts’, ‘promoting equality
and diversity by the elimination of discrimination on the grounds of age, sex or sexual orientation’
and ‘enabling people of one faith to understand the religious beliefs of others’—all of which,
according to the Charity Commission, are said to promote human rights? (Charity Commission, ‘The
Promotion of Human Rights’, Review of the Register RR12.)

It is also clear that the courts will not recognise the charitable status of a political trust merely because it is
masquerading as a trust for education or some other charitable purpose (see Re Hopkinson [1949] 1 Ch 346,
where the testator gave his residuary estate to four well-known members of the Labour Party), but see Re

p. 201 Koeppler [1986] Ch 423, next. ↵

Case close-up

Re Koeppler [1986] Ch 423, Court of Appeal

Facts: the testator, Koeppler, came to England from Germany in 1933. After World War II he ran
conferences, known collectively as the ‘Wilton Park’ project, for politicians, academics, civil servants,
industrialists and journalists. By his will he left a large part of his estate to the Wilton Park project for
‘as long as Wilton Park remains a British contribution to the formation of an informed international
public opinion and to the promotion of greater cooperation in Europe and the West in general’. The
will provided that, in the event of Wilton Park ceasing to exist, there should be a gift over to a named
Oxford college. The Wilton Park conferences were private, unofficial and not intended to follow any
party political line. In fact, the law had never acknowledged Wilton Park to be an entity; rather, it was
a sort of movement or body of thought. Accordingly the gift was bound to fail outright unless it could
be shown to be a gift for a charitable purpose. The judge at first instance decided that the gift must fail
for vagueness of purpose. The Attorney-General appealed.

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Held: because Wilton Park was not a legal entity, Koeppler’s gift must have been intended to be for
purposes of one sort or another. Those purposes must be taken to be the purposes of the Wilton Park
project, namely for the advancement of education through the provision of conferences. It followed
that this was a valid charitable gift for the advancement of education. The persons attending the
conferences would benefit themselves and pass on the benefits of their education to the general
public. So far as the conferences touched upon political matters they were merely genuine attempts
objectively to ascertain and disseminate truth. The trust was entitled to a ‘benignant construction’. In
other words, it should be assumed that the trustees would act in accordance with their duties, and
would not use the funds to propagate tendentious political opinions.

[Link] Student unions

In Webb v O’Doherty (1991) Times, 11 February a student union, being an educational charity, was not
permitted to make donations to a national student campaign to stop the Gulf War. Following Scott J in A-G v
Ross [1986] 1 WLR 252, Hoffmann J held that discussion of political issues was undoubtedly included within
the union’s charitable educational purposes, but:

There is … a clear distinction between the discussion of political matters, or the acquisition of
information which may have a political content, and a campaign on a political issue. There is no
doubt that campaigning, in the sense of seeking to influence public opinion on political matters, is
not a charitable activity. It is, of course, something which students are, like the rest of the
population, perfectly at liberty to do in their private capacities, but it is not a proper object of the
expenditure of charitable money.

8.3 The exclusivity requirement

The purposes of a charitable trust must be exclusively charitable (Charities Act 2011, s 1(1)(a)). In the
following sections we will consider what ‘exclusively’ means in this context. First, it should be noted that if a

p. 202 trust established for a certain class of people does not specify any purpose ↵ the courts may construe it to
be for purely charitable purposes. This occurred in Re Harding [2008] Ch 235, where Lewison J held that a
trust ‘for the black community of Hackney, Haringey, Islington and Tower Hamlets’ was held to be charitable.
The judge was content for the precise purposes to which the money should be applied to be determined by a
charitable scheme settled on by the trustees. (Incidentally, the limitation in favour of the ‘black community’
was struck out as being in breach of s 34(1) of the Race Relations Act 1976.)

8.3.1 Purposes ancillary to, incidental to, or de minimis in comparison with,

the charitable purposes
In Re Coxen [1948] Ch 747 the testator gave the residue of his estate, some £200,000, to the Court of
Aldermen of the City of London upon certain trusts. In Table 8.3 tick the ones you think are charitable.
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All the trusts were valid charitable trusts. It was held that the provisions in favour of the aldermen personally
were made to ensure the better administration of the main charitable trusts. In any event, even if those
provisions had not themselves been charitable, the sums involved were so insignificant in comparison with
that part of the fund devoted to the medical charities that the provisions for the benefit of the aldermen
personally could be seen as merely ancillary to the principal trust and would take effect on that basis. In cases
where the non-charitable allocation was so significant as not to be ‘ancillary’ the whole trust must fail, unless
the non-charitable part could be precisely quantified, in which case only that part would fail.

Table 8.3 The trusts in Re Coxen

(1) Spend £100 towards an annual dinner for the aldermen upon their meeting together upon trust business

(2) Pay one guinea to each alderman who attended the whole of a committee meeting in connection with the trust

(3) To apply the remainder for the benefit of certain medical charities

8.3.2 Non-charitable purposes compounded with charitable purposes

In Re Best [1904] 2 Ch 354 a bequest of residue was made to such ‘charitable and benevolent institutions’ as
the trustees shall in their discretion determine. The gift was construed to be exclusively charitable. The use of
the conjunction ‘and’ meant that there was no possibility of an institution benefiting which was benevolent
but not charitable.

8.3.3 Non-charitable purposes severable from the charitable purposes as a

matter of construction
In Salusbury v Denton (1857) 3 K & J 529 a testator left a fund to his widow for life and directed that after her
death she should leave a part of the fund to certain charities and the remainder to his relatives. The widow
died having failed to make the relevant appointments. The Vice-Chancellor, Sir W. Page Wood, held that the
wording of the trust permitted a severance of the non-charitable from the charitable objects, because the will
clearly bound the trustees to apply an unspecified moiety (part) of the estate to charity. In accordance with
the maxim equality is equity the court applied half of the fund towards the charitable purposes and the other
half to the testator’s relatives.

p. 203 8.3.4 Validation under the Charitable Trusts (Validation) Act 1954
A trust provision which could properly be construed as being for exclusively charitable purposes, but which
could nevertheless be used for non-charitable purposes, is validated as a charitable trust by s 1 of this Act.
However, the Act only applies where the trust provision is contained in an instrument which took effect
before 16 December 1952. The effect of the Act on a relevant trust provision is to render it exclusively

Page 37 of 47

charitable for the period before the commencement of the Act. For the period after the commencement of the
Act any relevant trust provision will be construed as valid only to the extent that it authorised the use of trust
property for charitable purposes.

8.3.5 Where noncharitable purposes are alternatives to the charitable pur

poses
If on a proper construction of the gift it is clear that the non-charitable purposes are alternatives to the
charitable purposes, the trust will not be a valid charitable trust. In Chichester Diocesan Fund and Board of
Finance v Simpson [1944] AC 341 Caleb Diplock left the residue of his estate on trust ‘for such charitable
institution or institutions or other charitable or benevolent object or objects as his executors might in their
absolute discretion select’. The residue was distributed amongst several charities. After the distribution the
testator’s statutory next of kin claimed that the residuary gift was not a valid charitable bequest because the
words ‘charitable or benevolent’ had rendered the gift uncertain.

The House of Lords held that, upon a true construction of the clause, the conjunction ‘or’ indicated that
‘benevolent’ was intended to be an alternative to ‘charitable’, rather than merely descriptive of it. ‘Or’ was
used in this disposition as it is used in the phrase ‘House of Commons or House of Lords’ and not as it is used
in the phrase ‘House of Lords or Upper Chamber’. Accordingly, the gift was void for uncertainty, though it
was surely never as uncertain as Lord Porter’s ‘explanation’ of the law, to quote: ‘the word “charitable” to be
exegetical of “benevolent”, should follow and not precede it. The wording should be “benevolent” or
“charitable” meaning “benevolent, i.e. charitable” not charitable or benevolent meaning “charitable, i.e.
benevolent”.’

The decision in that case meant, of course, that the statutory next of kin had to try and recover the misapplied
property—for that stage of the court proceedings see Re Diplock [1948] 1 Ch 465 (see [Link]). It may be true
to say that if Viscount Simon had held the gift to be charitable, English law would have been denied, in the
form of Re Diplock, the leading case in the modern law of tracing and restitution.

8.4 Cy-près

Where a private trust fails, the property usually returns to the settlor or testator’s estate under a resulting
trust (see [Link]). However, where money has been successfully dedicated to charity, rarely will it result to
the settlor or testator’s estate in this way. For where a charitable trust cannot be carried out, or is fulfilled
leaving a surplus of charitable funds, the doctrine of cy-près may enable an application of the funds to
charitable purposes as near as possible in type to those intended by the settlor.

cy-près

Old law French for the ‘the nearest thing’, literally ‘that which is near’ (pronounced ‘sea-pray’).

Page 38 of 47

p. 204 ↵ Property can only be applied cy-près at the direction of the court or the Charity Commission, the
trustees having a duty under s 13(5) of the Charities Act 1993 (s 61 of the Charities Act 2011) to make the
appropriate application to court wherever circumstances deem it necessary. Trustees should especially
consider the need to apply to court where available funds are far in excess of what is required to fulfil the
charitable purposes (Fafalios v Apodiacos [2020] EWHC 1189 (Ch)).

Different considerations apply to the operation of the doctrine according to whether or not the gift fails ab
initio or at some later date.

8.4.1 Initial failure

Where a gift fails from the outset the cy-près doctrine will only save the gift where the donor, in making the
gift, had a general or paramount charitable intent. The question to be asked is: did the donor desire a
charitable outcome by whatever means, or was the means specified essential to the donor’s intention in
making the charitable gift? If the donor’s intention is restricted to making a gift for a particular purpose
(albeit a charitable purpose) in a particular way, the gift will fail and the subject matter of the gift will result
to the donor. An example of failure ab initio without general charitable intent occurred in Kings v Bultitude
[2010] EWHC 1795 (Ch) (when the last surviving priest of a church denomination died, the church was
deemed to have ‘died’ with her). In each of the following cases there was an initial failure of the gift. Consider
the cases and tick the ones in which you think the donor has displayed a general charitable intention in
making the gift.

A testatrix left £200 to ‘Mrs Bailey’s Charity, Rotherhithe’. The charity, founded in 1756 for the benefit of
poor widows of Rotherhithe, had, by the date of the gift, been amalgamated in 1905 with other charities in the
area of Rotherhithe (see Re Faraker [1912] 2 Ch 488). Consider the ‘thinking point’ next.

Thinking point

Do you think that there was an initial failure of the gift?

In this case the Court of Appeal held that the amalgamated charities would be entitled to the legacy. However
there had been no initial failure, and this was not a case for the application of the doctrine of cy-près. The
amalgamated charities were entitled to receive the legacy because the original charity continued to exist in a
slightly modified form.

8.4.2 The modern law of cy-près

Prior to the Charities Act of 1960 the cy-près doctrine would only be applied where the charitable objects of
the trust were impossible or impracticable to fulfil. Section 13 of the 1960 Act relaxed these limitations on the
application of cy-près. That law is now consolidated in s 62 of the Charities Act 2011. Before proceeding it is

Page 39 of 47

absolutely crucial to note that s 62 does not affect the need to show a general or paramount charitable intent
before the doctrine of cy-près will apply in cases of initial failure (see 8.4.1). This was confirmed by the Court
of Appeal in Varsani v Jesani [1999] Ch 219 (in relation to the precursor to the Charities Act 2011). See Table 8.4
for an exercise.

Table 8.4 Initial failure exercise—case facts. What do you think was decided in the following cases?

Case 1
A testator left £5,000 ‘to the rector for the time being of St Thomas’ Seminary for the education of priests in the diocese of
Westminster’. Reference was made in the gift to the choice of particular candidates. At the date of the will the seminary still
existed, but it had ceased to exist at the date of the testator’s death (i.e. at the effective date of the gift).

Case 2
A testator left money to pay the salary of a school master. He was to teach at a specified school according to a syllabus of
the testator’s design. In the event the school was never built.

Case 3
A testatrix settled the net residue of her estate on the Royal College of Surgeons as trustee for the charitable purposes of
the college. Conditions attaching to the gift excluded women, Jews and Roman Catholics from partaking of a studentship
funded by the gift. The college threatened to disclaim the trusteeship unless those conditions were removed from the gift.

Case 4
A testatrix left £200 to the Wisbech Peace Society, Cambridge and £300 to the Peace Society of Belfast. The former had
ceased to exist before the date of the testatrix’s death, whilst the latter had never existed at all.

Case 5
A testatrix left gifts to the National Radium Commission, an unincorporated association, and to the National Council for
Maternity and Child Welfare, an incorporated company.

p. 205 ↵ How do your conclusions compare with the outcomes presented in Table 8.5?

Table 8.5 Initial failure exercise—case outcomes

Case 1
In Re Rymer [1895] 1 Ch 19, on the question whether the £5,000 could be applied cy-près it was held, instead, that the gift
lapsed and resulted to the testator’s residuary estate. Chitty J held that this was a gift for the particular seminary, and not a
general gift for the education of the priests in the diocese of Westminster. It was plain from the language used, which
referred to the saying of masses and the choice of candidates, that the choice of the seminary was not mere ‘machinery’ for
the carrying out of a general charitable intent, but went to the very substance of the testator’s gift.

Case 2
In Re Wilson [1913] 1 Ch 314, it was held that there was an initial failure but that the doctrine of cy-près would not apply to
save the gift because the fine details of the testator’s gift were not consistent with a general charitable intent.

Page 40 of 47

Case 3
In Re Lysaght [1966] 1 Ch 191, the court removed the conditions, stating that the gift would otherwise fail. The court was
able to find (perhaps artificially) a general charitable intention by making these ‘peripheral’ alterations to the donor’s
expressed intentions.

Case 4
In Re Harwood [1936] Ch 285, it was held that the gift of £200 to the Wisbech Peace Society failed and would not be applied
cy-près as the testatrix had lacked a general charitable intention in making that gift. As regards the gift of £300, it was held
that the testatrix had shown a general charitable intention to benefit any society connected with Belfast which existed for
the promotion of peace. The gift of £300 was applied cy-près.

Case 5
In Re Finger’s WT [1972] 1 Ch 286, it was held that the gift to the former institution was valid as a trust for general charitable
purposes, whereas the gift to the company was prima facie void as being for a particular legal person which had ceased to
exist (see Re Harwood, Case 4). However, Goff J thought the present case to be a special one and distinguished Re Harwood
on the basis that here the major part of the estate, including the residue, had been specifically devoted to charitable
purposes. Accordingly, the gift to the corporation was validated by the operation of the cy-près doctrine.

p. 206 ↵

Statute

Charities Act 2011, s 62 (replacing Charities Act 1993, s 13)

(1) Subject to subsection (3), the circumstances in which the original purposes of a charitable gift
can be altered to allow the property given or part of it to be applied cy-près are—

(a) where the original purposes, in whole or in part—

(i) have been as far as may be fulfilled, or

(ii) cannot be carried out, or not according to the directions given and to the spirit of the
gift,

(b) where the original purposes provide a use for part only of the property available by virtue
of the gift,

(i) the property available by virtue of the gift, and

(ii) other property applicable for similar purposes,

can be more effectively used in conjunction, and to that end can suitably, regard being
had to the appropriate considerations, be made applicable to common purposes,

(d) where the original purposes were laid down by reference to—

Page 41 of 47

(i) an area which then was but has since ceased to be a unit for some other purpose, or

(ii) a class of persons or an area which has for any reason since ceased to be suitable,
regard being had to the appropriate considerations, or to be practical in
administering the gift, or

(e) where the original purposes, in whole or in part, have, since they were laid down—

(i) been adequately provided for by other means,

(ii) ceased, as being useless or harmful to the community or for other reasons, to be in
law charitable, or

(iii) ceased in any other way to provide a suitable and effective method of using the
property available by virtue of the gift, regard being had to the appropriate
considerations.

(2) In subsection (1) ‘the appropriate considerations’ means—

(a) (on the one hand) the spirit of the gift concerned, and

(b) (on the other) the social and economic circumstances prevailing at the time of the
proposed alteration of the original purposes.

(3) Subsection (1) does not affect the conditions which must be satisfied in order that property
given for charitable purposes may be applied cy-près except in so far as those conditions
require a failure of the original purposes.

(4) References in subsections (1) to (3) to the original purposes of a gift are to be read, where the
application of the property given has been altered or regulated by a scheme or otherwise, as
referring to the purposes for which the property is for the time being applicable.

p. 207 ↵ The circumstances in which the original purposes of a charitable gift can be altered to allow the
property given or part of it to be applied cy-près are as follows (references are to subsections of Charities Act
1993, s 13 and Charities Act 2011, s 62):

impossibility: where the original purposes, in whole or in part, have been as far as may be fulfilled (s (1)
(a)(i)) or cannot be carried out, or cannot be carried out in accordance with the letter and spirit of the
gift (s (1)(a)(ii));

surplus property: where the original purposes provide a use for part only of the property available by
virtue of the gift (s (1)(b));

common investment: where the property available by virtue of the gift and other property applicable for
similar purposes can be more effectively used in conjunction for common purposes, regard being had to
the spirit of the gift (s (1)(c));

Page 42 of 47

unsuitability or impracticality of benefiting persons or area: where the original purposes were laid down …
by reference to a class of persons or to an area which has for any reason ceased to be suitable (regard
being had to the spirit of the gift) or to be practical (s (1)(d));

unsuitability and ineffectiveness: where the original purposes, in whole or in part, have, since they were
laid down, been adequately provided for by other means (s (1)(e)(i)) or ceased, as being useless or
harmful to the community or for other reasons, to be in law charitable (s (1)(e)(ii)) or ceased in any
other way to provide a suitable and effective method of using the property available by virtue of the gift,
regard being had to the spirit of the gift (s (1)(e)(iii)).

Thinking point

Examine the Charities Act 2011, s 62 set out earlier. In what circumstances will the doctrine of cy-près
apply today?

The Charity Commissioners referred to some of the uses to which s (1)(e) had been put in para. 43 of their
Annual Report for 1970:

[W]e have made schemes for a number of charities established for the repair of roads and bridges,
substituting for those purposes other general purposes for the benefit of local inhabitants which
could include, for instance, the promotion of the arts, the provision of seats and shelters, the
preservation of old buildings, or the improvement of local amenities.

8.4.3 Subsequent failure

In National Anti-Vivisection Society v IRC Lord Simonds stated obiter that the concept of what is charitable may
change from age to age, and that a trust which was once held to be charitable might one day cease to be so, in
which case the trust fund should be applied cy-près.

The crucial point to grasp is that in cases of subsequent impossibility the property can be applied cy-près
without the need to show a general or paramount charitable intention.

In Re King [1923] 1 Ch 243 the testatrix left the residue of her estate to provide for the erection, to the memory
of the testatrix and her relations, of a stained glass window in a parish church. This was held to be a valid
charitable trust of the whole fund, so that any surplus remaining after the erection of the stained glass
window should be applied cy-près, with the consent of the Attorney-General, towards the provision of a

p. 208 further stained glass window or windows in ↵ the same church. Romer J stated (at 246): ‘in the case of a
legacy to a charitable institution that exists at the death of the testator, but ceases to exist after his death and
before the legacy is paid over, the legacy is applied cy-près, even in the absence of a general charitable
intention: see Re Slevin [1891] 2 Ch 236.’ This example brings us to our next topic.

Page 43 of 47

8.4.4 The disposal of surplus donations

Prior to the Charities Act 1960 cy-près would only apply to cases of this type where the donors had shown a
general or paramount charitable intent, the practical (or impractical) consequence of this being that all other
surplus donations resulted to the donors, many of whom (being anonymous) could not be found. In response
to this unsatisfactory state of affairs, ss 63–66 of the Charities Act 2011 (Charities Act 2011, s 14) provide that
surplus monies donated to collecting boxes, raffles, entertainments and so on may be applied cy-près without
having to obtain the donors’ consent. As regards other donations, the trustees must advertise and take steps
to find the donors and, if they are found, return the donation to them or obtain in writing a waiver of the
donors’ claims to the donation. However, this advertising and inquiry process can be dispensed with by order
of the court where it appears to the court either that it would be ‘unreasonable, having regard to the amounts
likely to be returned to the donors, to incur expense with a view to returning the property’ (Charities Act 2011,
s 64(2)(a); Charities Act 1993, s 4(4)(a)) or that it would be ‘unreasonable, having regard to the nature,
circumstances and amounts of the gifts, and to the lapse of time since the gifts were made, for the donors to
expect the property to be returned’ (Charities Act 2011, s 64(2)(b); Charities Act 1993, s 4(4)(b)). The Charities
Act 2006 extended this power of the court to the Charity Commission. The Act also inserted a (very poorly
drafted) s 14A after s 14 of the Charities Act 1993. The essential import of the new s 14A (now consolidated as
Charities Act 2011, s 65) is that, if a donation for a specific charitable purpose is solicited from the donor with
the assurance that it will be applied cy-près if that specific purpose fails, the donor can declare, at the time he
makes the donation, that he would like to be offered the return of his donation. The section sets out the steps
that the trustees are required to take to inform the donor that the specific purpose has failed and the steps
that the donor must then take to secure the return of his donation. A further clause of the 1993 Act inserts a
new s 14B (now consolidated as Charities Act 2011, s 67), which provides that where property is applicable cy-
près, the court or the Commission may make a scheme providing for the property to be applied as appropriate
in the light of the spirit of the original gift, the desirability of securing that the property is applied for
charitable purposes which are close to the original purposes and the need for the benefiting charity to have
purposes which are suitable and effective in the light of current social and economic circumstances. Concern
that charitable trusts should be ‘suitable’ to ‘current social … circumstances’ means that if a charitable trust
cannot be carried out because of a racist or otherwise discriminatory provision, the court will be justified in
applying the fund cy-près to similar charitable purposes, but with the offensive limitation removed (this has
long been the law. See, for example, Re Lysaght [1966] 1 Ch 191).

Summary

We have distinguished the legal notion of charity from the everyday notion that charity connotes altruism and
benevolence. We have seen that a purpose is only charitable in law when it is beneficial to the public. The
Charities Act 2006 as consolidated in the Charities Act 2011 groups the main categories of charity under 13
heads.

p. 209 The fact that charitable trusts are beneficial to the public explains the many privileges they enjoy. These
include:

exemption from the requirement that a trust must have an ascertainable object;

Page 44 of 47

exemption from the beneficiary principle (i.e. the usual requirement that a trust must have a beneficiary
interested in enforcing the trust);

exemption from the rule against inalienability of capital;

a wide range of fiscal (tax) exemptions and privileges.

Where a charitable trust cannot be carried out, or is fulfilled leaving a surplus of charitable funds, the doctrine of
cy-près may enable an application of the funds to charitable purposes of a type ‘as near as possible to’ those
intended by the settlor. We have seen that different considerations apply to the operation of the doctrine
according to whether or not the gift fails ab initio or at some later date.

Test yourself <[Link]

directions7e-chapter-8-multiple-choice-questions?options=showName> on the content of this chapter with the
multiple-choice questions on the online resources.

Summative assessment exercise

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 classmates;

£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.

For full specimen answers <[Link]

resources/watt-directions7e-chapter-8-pointers-to-answering-the-self-assessment-questions-and-excercises?
options=showName> to these questions please visit the online resources.

The bigger picture

This chapter has focused on the challenge of knowing what to do with donations, but this question will only arise if
people are willing to part with their wealth to begin with. Nothing will discourage charitable giving more than the
sense that charities are administered negligently or fraudulently. Following a number of scandals concerning charities

Page 45 of 47

that are alleged to have used bullying tactics in seeking donations from elderly and other vulnerable persons,
Parliament has passed the Charities (Protection and Social Investment) Act 2016. The 2016 statute creates a new
regime designed to ensure ‘(a) public confidence in charities, (b) the level of charitable donations, and (c) people’s
willingness to volunteer’ (s 16). The regime includes potential for official warnings by the Charity Commission (s 1),
p. 210 investigations ↵ and power to suspend or remove trustees (ss 2, 4–5), power to direct specified action not to be
taken (s 6), power to direct winding up of the charity (s 7), power to direct property to be applied to another charity (s
8) and a requirement that there will be no fundraising by professionals unless they agree to protect vulnerable people
and other members of the public from ‘unreasonable intrusion’, ‘unreasonably persistent approaches for the purpose
of soliciting or otherwise procuring money or other property’ and ‘undue pressure … to give money’.

Further reading
Charity Commission, Decision of the Charity Commissioners for England & Wales: Application for Registration as a
Charity by the Church of Scientology (England and Wales) 17 November 1999

an interesting case study on the refusal to recognise the Church of Scientology as religious in charity law (but contrast
this with the Supreme Court’s decision to recognise scientology as a religion in the context of wedding ceremonies: R
(on the application of Hodkin) v Registrar General of Births, Deaths and Marriages [2013] UKSC 77; [2014] AC 610)

Clune, S. ‘Maintaining a social conscience’ (2014) 158(48) Solicitors’ Journal 33–4

examines proposed powers under the new Charities (Protection and Social Investment) Bill 2015 including the ability
to remove a disqualified trustee, to issue official warnings and to disqualify a person from acting as a trustee

Edge, P. ‘Charitable Status for the Advancement of Religion: An Abolitionist’s View’ (1995–6) 3 Charity Law and Practice
Review 29–35

an article which argues that to treat all religions equally one should remove charitable status from all

Garton, J. Public Benefit in Charity Law (2013) Oxford: Oxford University Press

argues that it is possible to identify four elements within the assessment of public benefit: the public benefit inherent
in the categories (‘heads’) of charity; the extent to which individual would-be charities can demonstrate sufficient
direct and tangible benefit; the extent to which those benefits are open to a sufficient section of the community; and
the restriction of private benefits to those that are merely incidental

Luxton, P. The Law of Charities (2001) Oxford: Oxford University Press

a general detailed text on the subject of charities

Matthew Mills, ‘The Development of the Public Benefit Requirements for Charitable Trusts in the Nineteenth
Century’ (2016) 37(3) J Leg Hist 269–302

historical study of the public benefit requirement in charity law

National Council for Voluntary Organisations, For the Public Benefit? A Consultation Document on Charity Law Reform
(2001)
Page 46 of 47

the original inspiration for the 2006 Act

The Charity Commission for England and Wales, Trust in Charities (2018)

this report considers how the public views charities, what this means for the sector, and how trust can be
p. 211 increased ↵

Synge, M. ‘New’ Public Benefit Requirement: Making Sense of Charity Law? (2015) Oxford: Hart

this book examines the public benefit requirement under the Charities Act 2006. The author asks whether the public
benefit requirement, as recently enacted and interpreted, has brought sense to charity law

Synge, M. ‘Charitable Status: Not a Negligible Matter’ (2016) 132 LQR 303–17

calls for reconsideration of the requirement (Oppenheim v Tobacco Securities Trust Co Ltd) that in a charitable trust the
potential beneficiaries should ‘not be numerically negligible’ and should form a ‘sufficient section of the public’

Warburton, J. ‘Charitable Trusts—Unique?’ [1999] Conv 20

an accessible article examining the distinction between charitable trusts and other trusts

For links to selected cases, statutes, academic papers and official reports mentioned in this chapter please visit
the online resources <[Link]
watt-directions7e-08-variation-of-trusts-web-links?options=showName>.

Related Books
View the Essential Cases in equity & trusts

Related Links
Visit the online resources for this title <[Link]

Test yourself: Multiple choice questions with instant feedback <[Link]

mcdonald-concentrate8e-student-resources/mcdonald-concentrate8e-diagnostic-test>

Find This Title

In the OUP print catalogue <[Link]

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