Law of Charitable Purposes
Despite the subjective nature of the recognition of one`s religious beliefs, some courts have rejected trusts when the beliefs were so “irrational” or “inconsequential” that they had no community interest. Not surprisingly, groups advocating illegal or immoral acts have not been classified as charities. See, for example, Potter v. United States, 79 F. Supp. 297 (N.D. Ill. 1946). The preamble to the Act contains a list of objectives or activities which are in fact a list of objectives or activities which the State considers to be of general interest to society and to which it intends to encourage private contributions.
The list forms the basis of the modern definition of charitable purposes that has developed in case law. Indeed, when considering whether or not a particular purpose fell within a charitable purpose from a legal point of view, the courts tended to look for an analogy between the purpose in question and the list and to recognize that the purpose was charitable when an analogy with the 1601 list could be found. [1] In general, a charitable foundation must have as its “object” an activity of general public interest and benefit such as “not-for-profit”. The goal must somehow benefit, improve or uplift humanity spiritually, morally, physically or spiritually. Poverty reduction is a viable charitable purpose, since society at large has a desire to alleviate suffering in the community. Often, these types of trusts provide food, clothing, shelter and other necessities of life to those in need in the community. The charitable purpose of the trust will not be lacking, even if it can help some less fortunate people to fulfill its mission. Trusts to relieve suffering can also be extended to animals.
The same requirement applies – an unlimited number of animals must be the purpose of the trust. If the trust only benefits the settler`s pet (e.g., “lifetime income to support my cat Frisky”), this purpose would not be considered charitable. With respect to widespread education, the courts are divided as to whether it qualifies as a charitable purpose. Nevertheless, these types of trusts have been recognized as charities in most jurisdictions. See, for example: In re Estate of Breeden, 208 Cal. App.3d 981 (1989). In addition, trusts whose primary function is lobbying as a means of improving laws or form of government have been recognized as charities under trust law, but not for tax purposes. See, for example, Girard Trust Co. v. Commissioner of Internal Revenue, 122 F.2d 108 (3d Cir. 1941). Therefore, the settlor`s attempt to establish this type of trust would not be treated favourably for tax purposes.
Of course, a foundation created to promote an illegal, irrational or immoral cause will not be maintained as a charitable foundation. See, for example, Medical Society v. South Carolina National Bank, 14 S.E.2d 577 (S.C. 1941). Non-profit: Generally recognized categories of charitable foundations include: poverty reduction, promotion of education or religion, health promotion, government purpose, or other causes that benefit the community. If the proposed trust does not qualify for any of the mandatory classes of charitable trusts, it could still be considered a private trust as long as it meets the other requirements of private trusts, i.e. The specificity of the beneficiaries and the rule against indefinition. Foundations that strive to cure diseases or promote health are considered charities.
In particular, spending on hospital maintenance, promoting medical research, and education, to name a few, falls well into the category of charity. See, for example, Sheen v. Sheen, 8 A.2d 136 (n.J. 1939). Education-focused foundations that benefit indeterminate members of the public are considered charities. Such support may include the establishment or support of schools, libraries, museums or similar institutions. Support to these institutions may target students, teachers or research activities. In general, foundations established to maintain and support religion, including funding worship, places of worship, and salaries of religious workers, are considered charities. In some cases, the definition of religion has potentially controversial implications. “Mixed-use” trusts (i.e., those with a dual charitable purpose and another charitable purpose) also fail when the two are inextricably linked. The categories of “charitable” purposes are often defined by society. For example, poverty reduction is generally recognized by society as a charitable purpose.
In addition, the promotion of education and religion, health promotion and government objectives were also seen as beneficial to the community. The exempt purposes set forth in Section 501(c)(3) of the Internal Revenue Code are charitable, religious, educational, scientific, literary, public safety tests, the promotion of national or international amateur sports competitions, and the prevention of cruelty to children or animals. The term charity is used in its generally accepted legal sense and includes assistance to the poor, needy or disadvantaged; promotion of religion; promotion of education or science; the construction or maintenance of buildings, monuments or public works; reduce the burden on government; reduce tensions in the neighbourhood; the elimination of prejudice and discrimination; the defence of human and civil rights guaranteed by law; and the fight against the deterioration of living conditions in the Community and juvenile delinquency. Nevertheless, “common interests” such as residual charitable trusts (i.e., those with a private purpose followed by a charitable purpose) and charitable trusts (i.e., those with a charitable purpose followed by a private purpose) are permitted.
