The legal meaning of charity is bonkers

The legal meaning of charity is bonkers," said the Chairperson of the charity Finance Group some years ago. The Charity Commission is currently reviewing the register of Charities. Write a briefing note to the Chief Commissioner, critically evaluating the present legal meaning of "charity," suggesting the most important reforms that ought to be considered, and explaining which type of voluntary organizations would be affected and why.

Dear Sir,

The purpose of this letter is to give you a brief opinion about the development of charities.

I have produced reports that seek information from the preamble to the statute of Queen Elizabeth 1601, till the recent case law. I have visited and found in your website statistics that I shall remind you in order to boldface the great amount that charity organizations produce each year. I will then suggest you some reformations that I hope you will consider deeply, since the charity commission is the only organization for the development and the supervision of the UK charity organizations by statute.

Get quality help now

Bella Hamilton

Verified writer

Proficient in: Charity

5 (234)

“ Very organized ,I enjoyed and Loved every bit of our professional interaction ”

+84 relevant experts are online

Hire writer

The expression "Charity" and its legal meaning,

Charities are an everyday phenomenon of the social environment. In simple words charity is "a kindness or sympathy towards others" or "a society or organization for helping people in need," as it is expressed in the "Oxford advanced learner dictionary New Edition." Charities are part of British life. They range from small charities with small budget that aim to satisfy small social needs to big organizations with budget of billion pounds (Unisef, Greenpeace, etc). The purpose of those organizations is philanthropic, which obliges them to act in favour of the public benefit.

According to English case law, a purpose, in order to be charitable, must fall within the 'spirit and intendment' of the Preamble to the Statute of Elizabeth, Charitable Uses Act 1601. Though the Preamble has been repealed by section 38 of the English Charities Act 1960, it has in effect been preserved in case law as an index of charitable purposes. The general legal meaning of charity may be gathered from the Preamble to the Statute of Elizabeth as I mentioned previously and cases such as Commissioners for Special Purposes of Income Tax v Pemsel. In this case, Lord McNaughten classified charitable trusts under four heads as follows:

(1) Trusts for the relief of poverty;

This category includes all the organizations whose purpose is to help people that are Poor. But the meaning of the word poor can be very wide and difficult to be understood in some occasions. In the 1601 Preamble "the relief of aged, impotent and poor people" belonged in the first category. Today case law has classified the relief of the aged and of the impotent under the fourth category. It has to be mentioned that trusts for the relief of poverty do not have to be for the public benefit. In Re Sanders 1954, Lord Harman rejected that providing dwellings to working classes and their families is charitable. Nevertheless, in Re Niyazi's Will Trust a gift of 15,000 pounds to help establish a hostel in Cyprus was found to be charitable, because the beneficiary had a lower income. The commission is helping people to relieve from poverty by paying electricity and gas bills, providing furniture, televisions and even supply of items such as books, tools, paying for travelling expanses. In addition to that, loans can be arranged for some purposes in order to bring the life of the beneficiaries to a reasonable standard.

(2) Trusts for the advancement of education

The advancement of education category, differing from the first one, as moffat says "...There is no restriction in terms of means or social class on the persons who may be entitled to benefit, nor is charging of fees prohibited..." This gives a big range of charitable purposes over education. It includes Industrial and technical training as long as cultural fields like music, drama, dancing and the fine arts.

(3) Trusts for the advancement of religion;

All the organizations that have as aim to promote any kind form of religion fall underneath this heading. The range of faiths, which may be advanced, and the methods that would be used for this advancement is a subject that the law is liberal with. An exception arises in the Roman Catholic faith, and other spiritual religions. The public benefit requirement of a charity "preserves the anti-Catholicism of former times" as moffat says. In Thornton V Howe 1862, the decision of the court, recognized charitable a device of land to promote a book about the mother of the second messiah. The non-Christian organizations can also be for charitable purposes. In Neville Estates Ltd. V Madden 1962 all religious non-Christian organizations such us Muslims or Hindus movements were described to belong under this heading. In Re South Place Ethical Society 1980 Lord Dillon ruled, "Two of the essential attributes of religion are faith and worship. Faith in a God and worship of that God." The conclusion is that organizations that promote ethical and moral standards but they do so in an atheistic footing, are not aiming for the advancement of religion. This decision also affects Scientology, which is not recognized as charitable in UK.

(4) Trusts for other purposes beneficial to the community not falling under any of the other three heads.

Under this heading can be classified all those organizations that satisfy the requirements set in A-G V National Provincial Bank. Thus in this category fall all the organizations that are : a)beneficial to the community, b) not within any of the preceding three categories and c) recognised by the law as charitable. Purposes that are recognized charitable under this head are: Relief of the aged or sick and disabled, relief of Human suffering and distress, social rehabilitation, public amenities and protection of the environment, Animal welfare and mental or moral improvement.

INCOME OF REGISTERED CHARITIES IN ENGLAND AND WALES 2001

At the end of 2001 there were 188,116 charities in your Register. Of these, 27,338 were subsidiaries or branches of other charities. This means that there were 160,778 "main" charities on the Register. These figures include 2440 "group" charities. Group charities are separate charities but share the same registered number because they have been grouped together for ease of administration. The Register showed at the end of 2001 that the total annual income of all registered main charities was �26,708,648,232. As it is expressed in your website, when this income is broken down by individual charities we find that many are very small organisations indeed, and that the financial wealth of registered charities, measured by their annual income, is concentrated in just a few very large charities. This is demonstrated in the following figures from www.charitycommission.gov.uk

a) Approximately 63% of registered charities have an income of �10,000 or less each year. They represent nearly two thirds of registered charities but have less than 1.5% of the annual income recorded.

b) Approximately 6% of charities receive nearly 90% of the total annual income recorded.

c) The largest 372 charities (only 0.24% of those on the Register) attract over 42% of the total annual income.

The table below sets out in more detail how the total income is broken down.

Annual income bracket (�)

Number of main charities

%of registered main charities

Total annual income (�bn) of charities in each bracket

% Income of registered main charities

�0-1,000

42,012

26.13%

0.008 bn

0.03%

�1,001-10,000

59,699

37.13%

0.268 bn

1.00%

�10,001-100,000

41,097

25.56%

1.349 bn

5.05%

�100,001-250,000

8,168

5.08%

1.305 bn

4.89%

�250,001-1million

6,164

3.83%

3.008 bn

11.26%

�1m-10m

3,266

2.03%

9.353 bn

35.02%

�10m and over

372

0.24%

11.417 bn

42.75%

Total

160,778

100.00%

26.708 bn

100.00%

Review of the Register of charities

Your Commission is currently reviewing the register of charities in England and Wales since it has a statutory responsibility for keeping it updated. Your investigations might end up with the discovery of new charitable purposes and with better classification of the existing charitable organisations. It is a fact that Parliament has been conservative towards the development of the charity statute legislation. The most recent step was made at 1993 with the amendments of the previous charity act of 1992. The regulation includes statutes that define the powers and functions of your commission (s.1.3), statutes about the modernization of charity organizations etc. (s.74). On the other hand, Common law has been the protagonist in the development of charity law. Your Commission acts on the same basis as the courts, works within and interprets the legal rules that determine whether an organisation is charitable. These rules are mainly laid down in decisions of the courts on particular cases rather than set out in Acts of Parliament. It concludes that your commission is responsible for the great development of charity law, influencing indirectly by the parliament, the courts.

If I were sitting in your current position as the Chief Commissioner, I would try to modify the fiscal privileges of the charity organizations. Fiscal privileges should be given to organizations not depending to their charitable status but upon other criteria connecting with the income, the number of workers and needs. Small voluntary organizations that are not recognised as charitable will also receive fiscal privileges in their taxation leading to their modernization and recognition as charitable.

I would also try to examine the organizations belonging to the 3rd category. With the current law all the religions and beliefs of gods are accepted as charitable. This means that I can create a charity organization that promotes an "evil" God, promoting bad and catastrophic ideas that would react to a majority or a minority of people. On the other hand we have to consider how much is this idea aiming for the public benefit and what influences would have in our social life. This concludes that I would do brief investigations upon the organizations' ideas. I wouldn't support religious purposes that would oppose to the democratic idea.