essay BP

what are the heads of charity under Charities Act 2006?

• prevention or relief of poverty

• advancement of education

• religion

• health

• the arts

etc.

AND/OR

an analogous purpose

what are the 2 types of public benefit as established in the Independent Schools case?

1. the nature of the purpose itself has to be such as to be a benefit to the community

2. those who could benefit from the carrying out of the purpose have to be sufficiently numerous so as to constitute a section of the public

what does s.4(2) Charities Act 2011 state?

just because a purpose falls within the list of charitable heads, it does NOT mean that it is necessary for the public benefit

any detriment or harm that results from the purpose must not outweigh __________________

the benefit

how do charities for the prevention or relief of poverty provide a more benevolent interpretation of certain rules?

Re Cohen: a trust for relief of poverty is not void for lack of PB even where it restricts persons it is intended to benefit by their relationship with the settlor

for charities for prevention/relief of poverty, how wide is the class?

fairly wide - need to be poor but not nec destitute

what are some justifications for the more lenient treatment of trusts for the prevention/relief of poverty?

• benefits to the state from outsourcing support of the poor to the charitable sector

• poverty relief provides immediate, measurable outcomes (contrast to religious benefit, which may be intangible or controversial)

• Virgo: fewer concerns about poverty trusts obtaining fiscal advantages as a result of being characterised as charitable, compared to trusts for the advancement of education - this is because company benevolent schemes that are free of tax do not constitute an attractive fringe benefit, since employees tend not to expect to fall into poverty, so they are unlikely to join an employer for this benefit

why should the courts be stricter about guarding against abuse of trusts of advancement for education than trusts for relief of poverty?

in contract, trusts for the advancement of education could be used in ways that confer real tax-free benefits to employees, e.g. if a company set up an ‘educational charity’ to pay for employees’ children’s school fees

• that is an attractive perk

when did treatment of trusts for advancement of religion get stricter?

post-Charities Act 2006

what did Simonds LJ hold in Gilmour v Coates?

a cloistered order of nuns did not provide a PB because they did not interact w/ the public

Gilmour v Coates: religious SERVICES can be assumed to be beneficial to those who attend, BUT public benefit can only be established if _________________________________________________

the court is entitled to accept and act on the beliefs of the Roman Catholic Church

in Neville, it was held that as longer as there is _________________________________________________________________

a de minimis public element (e.g. intermingling of the congregation w/ the public) to a religious purpose that is not supernatural, the purpose will be deemed charitable

in religious trusts, public benefit is NOT: ____________

presumed

• it must be demonstrated e.g. through education, worship, outreach

for a religious trust to be for the public benefit, what must there be?

tangible benefits to society, not just spiritual or theological assertions

what was held in Re Hetherington?

a religious rite in public does confer a sufficient PB because of the edifying + improving effect of such celebration on the members of public who attend

McGovern v AG: for educational trusts, courts generally require: ________________________________________

some structured teaching or dissemination of knowledge

in Re Hopkins’ Will Trust, the trust was still held as education despite what?

that the researcher is not required to engage in teaching or education in the conventional sense

• Virgo: 1st attribute of research, namely that it is of educational value to the researcher, is doubtful, esp bc it would not appear to fit the PB req

what did Lord MacDermott contend in Oppenheim?

the identification of a class of beneficiaries with reference to a personal nexus is an important factor in suggesting that a class is not a section of the public, but it should NOT be DECISIVE factor

what did Lord MacDermott in Oppenheim argue should be other relevant factors to determining whether a class is a section of the public?

• size of class

• needs of members of that class

• advantage to public in having those needs met

what does Lord MacDermott argue should have been held in Oppenheim?

the public benefit test should have been satisfied because the class size was very large

what did Lord Cross argue in Dingle v Turner?

the distinction between personal and impersonal relationships when identifying a section of the public is unsatisfactory

• ultimately, whether the class of potential beneficiaries did represent a section of the public is a matter of degree, having regard to the size of class and the purpose of the trust

the courts assess the benefit in trusts of ‘other purposes’ in light of __________________

evolving social norms (e.g. environmental charities, animal welfare)

what is are some ads + disads of the ‘other purposes’ category being context-sensitive and flexible?

ads

• contextual fairness - treating all charitable purposes identically would ignore important differences in how benefits are delivered

disads

• variability can lead to inconsistency and subjectivity in decisions

• absence of a universal test for PB makes outcomes unpredictable + unfair e.g. why should a private school for wealthy children be presumed to provide a public benefit (IRC v McMullen) while a small religious group does not

historically, courts applies a presumption of PB to charitable purposes falling within which heads of the Pemsel classification?

the 1st 3 heads:

• relief of poverty

• advancement of education

• advancement of religion

traditionally, the 4th head of the Pemsel classification (purposes beneficial to the community), required _______________________

evidence of public benefit

what did s.4(2) Charities Act 2011 do?

eliminate the presumption of PB for the 1st 3 Pemsel heads and imposes a uniform requirement: all purposes under s.3(1) must affirmatively demonstrate PB

in the Independent Schools case, why were educational trusts seen as being for the PB in the 1st sense (benefit)?

because of the value to society of having an educated population

what are some criticisms of s.4(2) Charities Act 2011?

• legal uncertainty: removal of the presumption introduces ambiguity + inconsistency, particularly where the PB is intangible (e.g. religious worship)

• administrative burden

• could be argued that certain purposes, e.g. promoting education, inherently benefit society

what are some defences of s.4(2) Charities Act 2011?

• transparency + justification of charitable status, esp given the fiscal privileges that charity status entails

• equality: all charitable purposes assessed by the same criteria

• public confidence that charitable status is reserved for organisations that demonstrably serve society - esp good considering religion?

how did the Charities Act 2006 reform the law?

expanded the statutory list of charitable purposes to 13 heads, inc advancement of health, ameteur sport, environmental protection, human rights, and animal welfare

who did the s.4(2) removal of the presumption of PB particularly affect?

fee-charging charities, e.g. independent schools, hospitals

Independent Schools Council v Charity Commission clarified that schools must provide _______________________________________

more than token benefit to those unable to afford fees

where did the Bermuda Act have non-charitable purpose trusts permissible?

where the purpose was sufficiently certain, lawful, and was not contrary to public policy

• but Bermuda allows these trusts because they bring in money from wealthy people who go there to avoid tax or hide money from creators

• so ni practice the enforce principle may end up being used for selfish reasons

what is the tension in National Anti-Vivisection Society?

• the Society sought charitable status under ‘other purposes beneficial to the community’

• while prima facie falling within a broad benevolent aim (improving humanity by abolishing cruelty to animals), the court scrutinised whether it conferred a real public benefit

> concluded that banning vivisection would harm medical progress and thus the public

• so the case demonstrates both Lord Simonds’ principle (courts favour charity where possible) and the overriding rule that PB is essential

what is the classic justification for the BP?

enforceability: trusts require a human beneficiary who can enforce them in court; otherwise trustees are left with uncontrolled discretion

(Lord Eldon in Morice v BoD)

what are some strengths of the enforceability justification for the BP?

• w/o beneficiaries there is no accountability, and trustees could use property however they wish

• ensures trust property is manages properly and not diverted to unintended uses

• preserves distinction between trusts and powers (trusts impose duties, powers are discretionary)

what are some weaknesses of the enforceability justification for the BP?

• artificiality: in practice, charitable trusts also lack human beneficiaries, but the AG is treated as an enforce - why not extend this model to non-charitable purposes?

• anomalous exceptions: courts have allowed purpose trusts in limited contexts (e.g. re Dean, re Hooper) - undermines the enforceability logic

what are some justifications for the BP other than enforceability?

• certainty of objects: non-charitable purposes are often vague or capricious

• perpetuity concerns - non-charitable purposes risk tying up property indefinitely

• public policy - avoids wasteful or frivolous uses of property

how can gifts to unincorporated associations cause conceptual difficulties?

associations are not legal persons, only groups of individuals bound by contract