ABSTRACT
498The case law on charitable trusts divided between trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community. However, the enactment of the Charities Act 2011 has had the effect of expanding the categories of ‘charitable purpose’ beyond those categories set out by the case law. The first three categories – the prevention and relief of poverty, the advancement of religion and the advancement of education – remain, but the fourth category has been replaced by a statutory list of purposes. There are now 13 categories of charitable purpose. That statutory list includes: the advancement of health or the saving of lives; the advancement of citizenship or community development; the advancement of the arts, culture, heritage or science; the advancement of amateur sport; the advancement of human rights, conflict resolution or reconciliation or the promotion of religious or racial harmony or equality and diversity; the advancement of environmental protection or improvement; the relief of those in need by reason of youth, age, ill-health, disability, financial hardship or other disadvantage; the advancement of animal welfare.
Trusts for the relief of poverty must relieve the poverty of some person. ‘Poverty’ means ‘something more than going short’ but does not require absolute destitution. It is apparently the case that it need not be a broad section of the community which stands to benefit from the trust. Rather, trusts for the relief of poverty are presumed to have a generally altruistic motivation and are therefore enforceable as being charitable. There have been subtle but significant alterations to poverty charities in the Charities Act 2011: a public benefit may now be required. This calls into question trusts for the relief of the poverty which will benefit only a small number of people: they were valid under the old case law.
Trusts for the advancement of education require that there is some institution of education benefited, or that the purpose of the trust is to generate research which will be published for the public benefit. In many cases, educational charitable trusts have been used as fronts for the provision of benefits to a private class of individuals. Consequently, the courts have developed a requirement that there be a sufficient public benefit, which requires that there is no ‘personal nexus’ between the people who stand to benefit and the settlor of the trust.
Trusts for the advancement of religion are required to have a sufficient public benefit, such that, for example, the works done and the prayers said by a cloistered order of nuns, though religious, would not be charitable in legal terms. Religion is concerned with ‘man’s relations with God’ and therefore excludes many modern new-age religions and cults.
