Charitable Objectives

Categories of Charitable Trust

The classes of trusts which are potentially recognised as charitable are divided into four categories;

• 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.

The importance of the identification and characterisation of a trust as a charitable trust is set out in other sections. There are significant tax advantages and reliefs. Charitable trusts are subject to far more liberal rules in relation to validity. Charitable trusts may be of unlimited duration. Formerly, private trusts were subject to significant limitations on their duration, although these rules have been largely removed by recent reforms.

Many trusts will be patently charitable. It may, however, be difficult to classify charitable trusts at the margin. The relevant criteria and standards may change over time. The recognition of religious trusts is particularly difficult and the approach of the Courts has differed significantly in Ireland, to that in England and Wales.

The above definition/criteria come from the preamble to a long-repealed Statute, which reformed the law on charities, following the Reformation. The statute was passed in England in the 16th century and it was applied to Ireland in the 17th century. The Statute does not define charitable purposes in itself and has long since been repealed. Nonetheless, the courts refer to the spirit and intention of the preamble, in deciding whether particular trusts are charitable.

Relief of Poverty

Trusts for the relief of poverty for the benefit of a particular group, class of persons or in a particular location, usually qualify, as charitable. Gifts for the relief of poverty may be for the poor generally or for a particular area, vicinity or neighbourhood.

Poverty is relative and the persons who are beneficiaries need not necessarily be destitute. It has been said that the trust may be made for the relief of gentile poverty.

A gift for the poor relations of a particular person has been upheld. More liberal rules apply in respect of public benefit in the case of gifts for the relief of poverty than in other cases.

Advancement of Education

In the case of advancement of education, a broad category of purposes having public benefit will qualify.  Education is broadly defined. Gifts for educational purposes generally will also be upheld. The trust need not necessarily be limited to education in the conventional sense.

Trusts for the advancement of education include those for particular schools and educational institutions.  The trust or charity must be for the education of the public generally or a particular class rather than a narrow class of individuals.

Gifts for the establishment of schools, universities, colleges etc. will usually qualify under this heading. Gifts for the entitlement of university chairs and scholarships are generally charitable. However, where it is limited to a particular class of persons, including particular members of the donor’ family, it is unlikely to have sufficient public benefit.

Broad Sense of Education

Trust may be for such things as the promotion of the arts, promotion of self -control, oratory, theatres, art galleries, museums, music, literature. Whether a gift for an artistic purpose is for public benefit is a matter of fact for the court to determine. This may even involve passing judgment on the merit of particular works of art.

Education includes education for vocations or professionals. However, a gift for the members of a particular professional association or its educational faculty of itself would not be sufficient. It must be limited to the educational purposes of the society. The above relieving provision for mixed purpose gifts may apply.

Trusts for sporting and recreational purposes within a particular school will generally be upheld.  However, trusts for sporting and recreational purposes in themselves may not qualify.

Advancement of Religion

A trust for the advancement of religion and religious purposes is generally charitable. Gifts to, for the advancement of religion and for particular religions are generally valid.

The traditional religions will readily qualify.    There may be more controversy in relation to trusts for more controversial or modern “sects” and like bodies.Trusts will be less readily upheld, where they are for the benefit of new or controversial religions, particularly those with very small numbers of adherents.

Religion is not limited to the traditional established religions. It is not confined to Christian religions. It need not necessarily be limited to monotheistic religions. The courts do not inquire into the validity of particular religions.

Gifts for conversion whether domestically or abroad have been upheld in Ireland. Gifts for the training and instruction of clergy appear valid.

The objective must be for the public benefit. The Irish courts have allowed a subjective test in the context of religion.  Where the person making the gift believes it is for the public benefit, this is generally upheld provided the belief is rational, moral and legal.

Masses

Gifts for the celebration of masses are upheld in Ireland. This is so, irrespective of whether the masses are said in public. Gifts to contemplative orders are also held charitable in Ireland.

In Ireland, trusts for saying masses for the repose of one person’s soul are upheld and valid under the Charities Act notwithstanding the absence of any public element.

This differs from the positionin England and Wales where the test is more objective and there must be some proof of public benefit.

Statutory Reinforcement

The approach of the Irish courts to gifts for religious purposes has been reinforced by the Charities Act. The Act provides that in determining whether or not a gift for the purpose of advancement of religion is a valid, charitable gift, it is conclusively presumed that the purpose includes and will occasion public benefit.

It further provided that for the avoidance of difficulties in giving effect to the intention of donors for the purpose of advancement of religion and in order not to frustrate those intentions gifts for the celebration of mass whether in public or private are valid, charitable gifts.

A valid charitable gift for the purpose of advancement of religion shall have effect and be construed in accordance with the laws,  ordinances and tenets of the religion concerned.

Religious Offices Clergy & Tombs

Gifts to the holders of particular religious offices can cause difficulty. If the office carries charge on the duties and obligations, the trust will generally be charitable. Gifts for the support of clergymen have been upheld as valid.

Difficult questions of interpretation may arise as to whether the gift is intended to be made to the holder personally or in his capacity as holder of a particular office.  The purposes must be charitable. If they are partly charitable and r non-charitable, the Charities Act may apply to save the gift.

Gifts for clergymen’s houses have been denied charitable status for purpose of rating exemption. The exemption applies only to buildings exclusively dedicated to a religious purpose. On this basis, teaching colleges did not qualify for the rates exemption. However, the rating exemption has a narrower test than the general charitable purpose test and depends on the wording of the particular statute.

Trusts for the maintenance of churches, buildings, tombs, graveyards, etc. are upheld and valid.A gift for a tomb is valid provided it is limited to certain financial levels, notwithstanding that it is not a charitable trust in the strict sense.

A gift for the maintenance of a churchyard or a cemetery, even non-religious, has been upheld as charitable. If it is not religious, it will generally be for the benefit of the public and qualify under the residual heading.

Residual Category

The fourth or residual class refers to trusts for other purposes beneficial to the community. Whereas trusts for education, relief of poverty and religion are presumed to be for the public benefit, this does not apply to this latter category. It is not enough that the purpose is for the benefit of the public.

Trusts in the fourth category must be for the public benefit generally or be for the benefit of a particular part of the public or community.  The part of the public must be significant. It should not be merely for the benefit of a limited class, such as the extended relatives of the settlor (person creating the trust) or the employees of a company.

A wide range of trusts have been upheld as potentially beneficial in this context.  Trusts for communities, hospitals, the aged, the disabled, sick, sporting or recreational bodies for the benefit of the locality have also been upheld in this category.

Nature of Purposes

Difficult questions may arise as to whether a trust is of sufficient benefit to the public, in order to qualify in the fourth category. Traditionally, a trust falling into this category must fall broadly within the spirit and intent of charitable uses and purposes as contemplated in the preamble to the (repealed) Elizabethan Charitable Uses Act.

A trust is not charitable simply because it benefits the community. Mere public benefit is not enough. It must be for the relief of poverty, education, religion, or some other similar public benefit, which has been recognised by the courts or is analogous to a purpose which has been recognised.

The gift must fall into certain broad categories or analogous cases. The residual category is sometimes measured by reference to the intent and spirit of the abovementioned statute.

Subjective Approach to some Extent

Where there is public controversy on a matter, the question as to whether the purpose is beneficial to the public is measured subjectively, to some extent, in Ireland. Where the person making the trust considers it beneficial, the court will endeavour to take a neutral stance.

Although a subjective recourse may be permissible, less latitude is given than in the case of religious trusts. The court must be satisfied that the matter is of benefit and importance on an objective basis. It must not be irrational, unlawful or immoral. The objection is that trusts could be otherwise made for fantastic objects that have very little merit and substance.

Gifts in the residual category may be too vague to be given effect even under the above principles.  However, the courts and later statute have endeavoured to save charitable gifts where there is a charitable intention.

Residual Ground / Limits

Gifts to assist, maintain, old or/and aged and disabled persons have long since been upheld. Gifts for the purpose of repair of hospitals have been upheld. Hospitals may qualify, even though they charge fees to some patients. Even where a hospital or nursing home is fully fee-paying, it may still be upheld as charitable where it is running enough for classification on this basis.

Trusts for the benefit of science and medical science may be charitable. Where they are for the benefit of a particular professional organization, they may not qualify.

Charities to provide recreation have historically not been looked upon favourably. Recreational activity has been seen as less meritorious than other categories.

On the other hand gifts for the benefit of a particular locality or for the maintenance of parks for public use have been upheld as charitable. Gifts of recreational facilities which are not devoted exclusively to charitable purposes have not been, have, may not qualify.

Public Benefit

A trust for the benefit of a group of employees and associates of a particular company, even a very large one, is unlikely to be held to be charitable. Similarly, a trust which benefits a wide category of relations is insufficiently public in nature in order to qualify as a charity. However, it appears that there may be differences of approach, depending on the purpose of the trust. It would appear that a trust for the relief of poverty will be allowed in respect of a much narrower category of person than, for example, a  trust for the purposes of education.

A trust may be sufficiently public if it is for the benefit of the inhabitants of a particular locality. The fact that it is limited to members of a particular club or members of a particular association, will not necessarily disqualify it.

It is not enough that the purpose is for the benefit of the inhabitants of a particular locality. Its purposes themselves must be charitable. If it falls into one of the recognised categories of charity, it will be more readily assumed to be for the public benefit, until the contrary is shown.

In respect of the residual category of trusts, the criteria of public benefit or benefit to the community is a necessary, though not necessarily sufficient condition, for the trust to be charitable. It need not benefit the community as a whole, and indeed, it rarely will. However, it must benefit a section of the community, who must not be negligible in number and who must not be traced by reference to a relationship to a particular person or organisation.

Purpose Trusts

Generally, trusts for a particular purpose which do not qualify as charitable and are void.

Gifts for the maintenance of particular animals do not qualify at common law. In contrast, trusts for the maintenance and welfare of animals generally have been upheld.

However, the Charities Act specifically allows trusts for:

• erection and maintenance of monuments or graves;
• trusts for the benefits of clubs and bodies which are interpreted as a gift to the association with the requirement to to apply for charitable purposes;
• trusts for the maintenance of particular animals.

Political Purposes

Trusts for political purposes are denied charitable status. Gifts for political parties and for political purposes are not charitable. In England, a gift for Amnesty International was held to be non-charitable on the grounds that it is political in nature.

Gifts principally for the purpose of relief of poverty and advancement of education in developing countries may be invalidated if their purposes extend to political purposes.

Trusts for the promotion of vegetarianism have been upheld in Ireland. Trust for an antivivisectionist society was held invalid albeit many years ago in England.