Charity Tribunal rules that poverty charities can restrict beneficiaries

Print this page Email a link to this page
twitterlinkedintwitterlinkedin

Following a reference made by the Attorney General the Charity Commission has published its judgment on 20 February 2012 that benevolent funds and charities for the relief of poverty can be “for the public benefit” even if they restrict their class of beneficiaries by reference to a specific employer, profession or family.

The Upper Tribunal confirmed the earlier decision in the Independent Schools Council Case (see above) that “public benefit” has two limbs: firstly the nature of the purpose of any charitable trust must be a benefit to the community; and secondly the trust must be for the benefit of a sufficient section of the community.  What is or is not a sufficient section of the public to satisfy the second aspect of public benefit varies depending on the nature of the charity, but those who may benefit from the carrying out of the purpose must be sufficiently numerous, and identified in such manner, as to constitute a section of the public.

However, in the case of a charitable trust established for the relief of poverty, it was not necessary prior to the Charities Act 2006 – and it remains unnecessary – for such a trust to satisfy the second limb.  This is because the relief of poverty of even a small group or the indirect benefit to society as a whole provides sufficient public benefit.

Likewise, the Tribunal also ruled that trusts for the prevention of poverty are also capable of being “for the public benefit” even if they have a restrictive class of beneficiaries.

For further information, help or advice please contact Chris Hook on 0191 211 7929 or email [email protected].