Earlier this week I blogged about how at its most basic a charity is a trust which must adhere to the same fundamental requirements as all trusts, namely that it must meet the “three certainties”. In that blog I discussed how charitable trusts are provided with special rules in relation to the “Certainty of Objects” requirement, which would typically require the beneficiaries of the trust to be easily ascertainable, with such a requirement for charitable trusts being met if it found the trust has a charitable “purpose”. But just what is a “charitable purpose” which would allow a trust access to these special rules?
What is considered a “charitable purpose” has not changed much since the reign of Queen Elizabeth I and the Charitable Uses Act of 1601. Although the language has changed slightly since 1601 (the Charitable Uses Act includes “Mariages of poore Maides” as a charitable purpose), the broad charitable categories that were established while Shakespeare was still alive continue to be utilized by the Canadian courts to determine what is and what is not a charity. They are:
- The relief of poverty;
- The advancement of education;
- The advancement of religion; and
- Other purposes beneficial to the community.
If the “purpose” of your trust is found to fit one of the four categories above your trust can be considered a valid charitable purpose trust and be afforded the special rules relating to the certainty of objects as well as the rule against perpetuities.
Thank you for reading.