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When is a charity a charity? We await the punchline…

Very rarely do the judgments of the First Tier Tribunal (Charity) merit the attention of the wider public. Their business consists, in the main, of deciding whether the Charity Commission was right to reject applications for charitable status. It is not, perhaps, anything that excites anyone other than the keenest of charity lawyers.

But every now and again there’s a case that has more fundamental and wide-ranging impact. And this month saw just such a case.

To obtain charitable status (and to benefit from the various tax breaks that such status attracts), an organisation must satisfy two main criteria:

  • the organisation must consist exclusively for one of a number of defined ‘charitable purposes’, and
  • the organisation must offer a ‘public benefit’.

Of course, it’s not entirely that straightforward. There is far more to it than that, but these are the two main hurdles over which any wannabe-charity must climb.

This case involves an English organisation, the Human Dignity Trust, which seeks to “ensure that international human rights laws which prohibit the criminalisation of private consensual same-sex sexual conduct are respected and applied across the world”. The Trust applied for charitable status, but their application was rejected by the Charity Commission, who said that they “recognise the aspirational and valuable philanthropic work of the Trust in seeking to remedy what is considers to be instances of injustice”, but also recognised that not everything that is beneficial to the public is necessarily charitable.

The Tribunal case now revolves around two issues:

  • Does the Trust have a charitable purpose? Or a political one? If it is political, then it cannot be registered as charity. Is the Trust set up to advance human rights (which is accepted as a charitable purpose), or to campaign for a change of the law in foreign countries (which is accepted as a political purpose)?
  • There is little dispute that the Trust provides a public benefit, but only outside the UK. It is accepted that the public in the UK do not benefit from the Trust’s work. So, does the public benefit test require a benefit to be conferred on UK individuals, or is a benefit conferred on foreign individuals sufficient?

The trustees of Human Dignity Trust (who were represented by not one, not two but three barristers at the Tribunal hearing) have warned that if the Tribunal upholds the Commission’s decision, and rejects the application, it could threaten the status of charities that work in the field of foreign human rights.

Unfortunately, we do not have the Tribunal’s decision yet, but we’ll keep an eye out and update the blog when it is published.

 

UPDATE JULY 2014: The Tribunal found in favour of the Human Dignity Trust. It decided that the Trust was established for the purposes of promoting and protecting human rights and promoting the sound administration of the law (which is charitable), not for the purpose of changing laws in foreign countries (which is not charitable). The Tribunal, however, appeared to side-step the question on ‘public benefit’, simply saying that it was satisfied the Trust provided a benefit. It did not identify who in the UK benefitted from the Trust’s activities, or whether (if no-one in the UK benefitted) it was sufficient to benefit the public outside the UK (which would have marked a significant change in the law). Therefore, the Charity Commission has been told to complete the Trust’s application to become a charity. 

 

These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.

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