Charitable purpose trusts

A charitable purpose trust is

A trust in which the object is a charitable purpose rather than a person or people

‘Charity’ means

An institution established for charitable purposes only — s.1(1)(a) of the Charities Act 2011

A charitable purpose is

A purpose which falls under subsection 3(1) and is for the public benefit — s.2(1)(a) of the Charities Act 2011

Purposes falling under subsection 3(1) include

1. Poverty

2. Education

3. Religion

4. Health

5. Citizenship or community

6. Arts, culture, heritage or science

7. Amateur sport

8. Human rights

9. Environment

10. Animal welfare

The Charity Commission suggests that a purpose is for public benefit if

1. It has an overall beneficial effect

2. It benefits the public in general or at least a sufficient section of the public

Where the benefit is qualitative (e.g. a collection of art) rather than quantitative, an expert should evaluate whether the benefit has genuine artistic, historic or educational value

Re Pinion [1965]

Where the organisation has a variation of aims, all the aims must be for beneficial effect

Morice v Bishop of Durham [1804]

If the organisation has any detrimental effect, it cannot be greater than its beneficial effect

National Anti Vivisection Society v IRC [1948]

An organisation does not benefit the public if there is a personal nexus between the trustee(s) and the people who may benefit e.g. trustee giving money to his former workplace to improve facilities for former colleagues

Oppenheim v Tobacco Securities Trust Ltd [1951]

The number of people who may benefit must not be numerically negligible (too small to be worth considering)

Oppenheim v Tobacco Securities Trust Ltd [1951]

Where the purpose is towards a private hospital, it can still be charitable so long as the hospital reinvests its profits, so that patients may benefit

Re Resch [1969]