Charities
Monday, 21 March 2022 12:49
TI 1
What are charities?
- Organisations set up for purposes
○ Look after children
○ Feed the hungry
- They can be unincorporated - typically trusts
- They can be incorporated
- Most of the big charities are companies limited by guarantee
What are the legal advantages of charitable status for a trust?
- Not void for being purpose trusts
- Tax advantages
- Cy Pres
The charity commission
- The charity commission regulator and registrar of charities in England and Wales
- Established under the Charities Act 2006, now the Charities Act 2011
- Statutory role includes increasing charities' efficiency and effectiveness and public confidence
and trust in the charitable sector
- Only covers UK charities
Charities Act 2011
- Three requirements:
○ S1 (1)(A) The trust must be exclusively charitable
▪ Meaning of 'charity' - for the purposes of the law of England and Wales, 'Charity'
means an institution which is established for charitable purposes only
○ S2 (1)(A) The purpose must be on the S3 list
▪ Meaning of 'charitable purpose' - for the purpose of the law in England and Wales,
a charitable purpose is a purpose which falls within S3(1) and is for public benefit
○ S2 (1)(B) The trust must be for public benefit
TI 2
Obtaining charitable status
- Three hurdles to jump to successfully gain charitable status
○ Be on the 'good list' - fall within one of the 13 charitable purposes in the Charities Act
2011 s3(1)
○ A charity must be in the public benefit
○ A charity must be exclusively charitable
What is a charitable purpose?
- Originally in the preamble to the Charitable Uses Act 1601
- Rationalised in IRC v Pemsel [1891] as being for one of the following purposes
○ Relief of poverty
○ Advancement of education
○ Advancement of religion
○ Other purposes beneficial to the community
S3 Charities Act 2011
1. The prevention or relief of poverty
2. The advancement of education
3. The advancement of religion
Equity and Trusts Page 1
Monday, 21 March 2022 12:49
TI 1
What are charities?
- Organisations set up for purposes
○ Look after children
○ Feed the hungry
- They can be unincorporated - typically trusts
- They can be incorporated
- Most of the big charities are companies limited by guarantee
What are the legal advantages of charitable status for a trust?
- Not void for being purpose trusts
- Tax advantages
- Cy Pres
The charity commission
- The charity commission regulator and registrar of charities in England and Wales
- Established under the Charities Act 2006, now the Charities Act 2011
- Statutory role includes increasing charities' efficiency and effectiveness and public confidence
and trust in the charitable sector
- Only covers UK charities
Charities Act 2011
- Three requirements:
○ S1 (1)(A) The trust must be exclusively charitable
▪ Meaning of 'charity' - for the purposes of the law of England and Wales, 'Charity'
means an institution which is established for charitable purposes only
○ S2 (1)(A) The purpose must be on the S3 list
▪ Meaning of 'charitable purpose' - for the purpose of the law in England and Wales,
a charitable purpose is a purpose which falls within S3(1) and is for public benefit
○ S2 (1)(B) The trust must be for public benefit
TI 2
Obtaining charitable status
- Three hurdles to jump to successfully gain charitable status
○ Be on the 'good list' - fall within one of the 13 charitable purposes in the Charities Act
2011 s3(1)
○ A charity must be in the public benefit
○ A charity must be exclusively charitable
What is a charitable purpose?
- Originally in the preamble to the Charitable Uses Act 1601
- Rationalised in IRC v Pemsel [1891] as being for one of the following purposes
○ Relief of poverty
○ Advancement of education
○ Advancement of religion
○ Other purposes beneficial to the community
S3 Charities Act 2011
1. The prevention or relief of poverty
2. The advancement of education
3. The advancement of religion
Equity and Trusts Page 1
