Four classes of charitable trusts

Until the Australian government changes the laws you have 4 four main headings of a "charity":

  1. poverty
  2. education
  3. religion
  4. beneficial to the community

For all 4 you also need the additional element of "public benefit".

General philanthropic or benevolent purposes are not sufficient to make an institution charitable if its objects do not fall within one of these 4 classes: Keren Kayemeth Le Jisroel Ltd v Commrs IR (1932) AC 650.

1. RELIEF OF POVERTY

Gifts for the general relief of poverty or for the relief of "necessitous" persons in a particular class are charitable. This doesn’t include gifts for the benefit of particular poor persons like your parents or relatives! (Cunnack v Edwards (1896) 2 Ch 679)

Given the pensions and DSS in Australia, thankfully the poverty doesn’t have to be entirely destitute. At Civic Legal we can get your trust to qualify as charitable if it relieves distress occasioned by lack of money. Take for example, IR Commrs v Peeblesshire Nursing Association (1927) 11 TC 335. The nurses provided nursing facilities for working people at a moderate fee. The object of the association was to supply nursing at less than cost to sick persons of the poor classes. The court said that the association was established for charitable purposes.

An employees' health and relief fund for employees and former employees of a public company, or their dependants, in necessitous circumstances can be charitable: Gibson v South American Stores Ltd (1949) 2 All ER 985.

2. ADVANCEMENT OF EDUCATION

Gifts for the propagation of education or for the increase of knowledge are charitable, as are gifts to schools of learning or for education in particular subjects. From our experience gifts for the following purposes are for the advancement of education:

  • the advancement of zoology (Re Lopes (1931) 2 Ch 130)
  • the diffusion of geographical and of natural knowledge (Beaumont v Oliviera (1869) 4 Ch App 309)
  • the promotion of fuel technology (Institute of Fuel v Morley (1955) 3 All ER 843)

You can see that "education" has a wide and changing meaning. However these so called charities set up to give your child an "award" were a little silly. They never worked. The insurance profession tried the same trick back in 1957 and it didn't work then either: Chartered Insurance Institute v London Corporation (1957) 1 WLR 867.

In London Hospital Medical College v IRC (1976) 1 WLR 613, the College Students Union was held to have the charitable purpose of providing physical, social and cultural outlets for the medical college students and thus to be furthering the educational purpose of the college. Conversely, an association of old boys of a school has been held not to be charitable (8 CTBR Case 62).

3. ADVANCEMENT OF RELIGION

Remember you always need "public benefit". Therefore, many religious purposes are not charitable. Religion includes any form of Christian religion, the Jewish religion, Unitarianism, any form of monotheistic theism (Bowman v Secular Society (1917) AC 406), as well as Buddhism (R v Registrar General, Ex Parte Segerdal (1970) 2 QB 697).

Freemasonry is not a religion (United Grand Lodge of Ancient Free and Accepted Masons of England v Holborn Borough Council (1957) 1 WLR 1080), nor was a non-theistic ethical society considered to be a religion (Re South Place Ethical Society (1980) 1 WLR 1565).

The old English cases say that prayers to God to save your soul were not charitable. In Australia the government is more fearful of the powerful religions. Gifts to contemplative religious orders can be charitable even though the sole purpose of the group is to pray and not to engage in any physical works of mercy (Assoc. of Franciscan Order of Friars Minor v City of Kew (1967) VR 732; Perpetual Trustee Co Ltd v Wittscheibe (1940) 40 SR NSW 501; Re a'Beckett, Allard v Lambert (1941) VLR 283).

It has been held that the advancement of religion included the saying of Masses (Crowther v Brophy), the provisions of facilities for worship (Franciscan Order), burial grounds associated with churches (Re Mitchner (deceased) Union Trustee Co of Aust v A-G (Cth) (1922) St R Qd 39), and maintenance of the clergy (Re Drummond's Trusts (1908) 4 Tas LR 9).

4. OTHER PURPOSES BENEFICIAL TO THE COMMUNITY

Public general utility doesn’t get you over the line. However, many trusts for purposes beneficial to the community are charitable (Incorporated Council for Law Reporting for England and Wales v Att Gen (1972) Ch 73).

As long as you benefit poor people your charity can also help the rich. At Brett Davies Lawyers to fall within this category, you are both beneficial to the community and within the spirit of the Preamble to the Statute of Elizabeth.

The list is not defined. However, we can put together a charitable trust for:

  • gifts to hospitals, to asylums, for a sanatorium
  • for competitions among the police
  • for training boys for the sea
  • to promote vegetarianism
  • for the protection of animals
  • for the preservation of land and buildings of beauty or of historical interest
  • for the promotion of temperance
  • class of the community and for inhabitants of a particular area
  • art galleries, museums, libraries
  • aged
  • "impotent" including the physically weak, disabled or helpless (eg blind, sick, convalescent, mentally affected)

Some say that you can't have a charity for mere sport. While that is true, at Brett Davies Lawyers we ensure that the sport is connected with education. For example a gift to teach rifle shooting has been held to be charitable: Re Pattern (1929) 2 Ch 276, Re Gray (1925) Ch 362, and Re Stephens (1892) 8 TLR 792.

MAKE SURE YOUR DEED IS SOUND

Caring and good people have tried to set up charities for "public purposes", "benevolent purposes", "philanthropic purposes", "patriotic purposes" and for "good works". They have failed. In our view gifts for specific purposes are much more likely found charitable under this heading than gifts for merely general unspecified purposes.

Civic Legal are happy to meet with you, your Accountant and Adviser and discuss these issues in greater depth. As a private law firm, we only take instructions via your own Lawyer, Accountant and Adviser.

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