Charitable purpose trusts are public trusts promoting purposes beneficial to the community. Unlike private express trusts, they are not bound by the beneficiary principle or the usual perpetuity rules, and are supervised by the Charity Commission and the High Court.
Definition and Essential Characteristics
Under s 1 of the Charities Act 2011, a charity is an institution established for charitable purposes only and subject to the control of the High Court. To be charitable it must (1) be for a purpose the law regards as charitable, (2) be for the public benefit, and (3) be wholly and exclusively charitable.
Advantages of Charitable Status
- Perpetual duration (though property must vest within the 125-year period).
- Relaxed certainty of objects — a vague charitable purpose can be directed by a “scheme”.
- The cy-près doctrine — failed purposes are redirected to similar ones.
- Tax privileges — reliefs and Gift Aid.
Recognised Charitable Purposes
Section 3(1) codifies thirteen heads, building on the Preamble to the Statute of Charitable Uses 1601. They include the relief of poverty (a relative term, not destitution), the advancement of education (including research with utility — Re Hopkins’ Will Trust), the advancement of religion (requiring worship/veneration; purely cloistered orders fail public benefit — Gilmour v Coats), and others such as health, amateur sport, human rights, the environment, animal welfare, and the armed forces or police.
The Public Benefit Requirement
Since 2006 there is no presumption of public benefit. There are two aspects:
- The benefit aspect: the purpose must be identifiable and beneficial, the benefit not outweighed by detriment (National Anti-Vivisection Society v IRC).
- The public aspect: it must benefit the public or a sufficient section, generally with no personal nexus between settlor and beneficiaries (Oppenheim v Tobacco Securities Trust — a company’s employees’ children failed).
The poverty exception relaxes the nexus rule (“poor relations” in Re Scarisbrick; “poor employees” in Dingle v Turner). Fee-paying schools must provide more than a de minimis benefit to those who cannot pay.
Exclusivity and Political Purposes
A trust must be exclusively charitable: “charitable or benevolent” objects are void, as “benevolent” is wider. A political main purpose (changing the law, influencing policy, supporting a party) cannot be charitable (McGovern v Attorney General), though incidental political activity is permitted.
Regulation and Cy-Près
Charities are protected by the Crown as parens patriae through the Attorney General, with the Charity Commission as primary regulator (registration creates a conclusive presumption of charitable status). The cy-près doctrine (“as near as may be”) redirects funds: on initial failure a general charitable intention is needed (else the gift lapses — Re Harwood); on subsequent failure funds are permanently dedicated to charity. Section 62 expanded the statutory grounds, having regard to the “spirit of the gift”.