Passing on the benefit: proving that one charity is the same as another
In the recent decision of Nicholas Strauss QC (sitting as a deputy judge of the High Court) in TWM Trust Corporation Ltd v Attorney General and others  All ER (D) 139 (May), the executors of an estate asked the Court to determine whether a gift from a residuary estate to a named charity that appeared to have ceased to exist could be passed to an alternative organisation or if it should go to unknown intestate beneficiaries.
The charity in question was named in the Will as the Friends of Benwell Centre and had been set up to provide relief for elderly people in need resident in Sunbury-On-Thames. It fulfilled this purpose by organising activities for attendees of a day centre for elderly people, based at the Benwell Centre. The committee which ran the charity was made up of users of the centre. The local council which funded the centre itself and helped with the administration of the charity decided to temporarily transfer the centre to another building. Around the same time, it also decided to de-register the charity from the Register of Charities as the costs of remaining registered were disproportionate in comparison with the charity’s income. The charity’s funds were transferred from an account in the name of the Friends of the Benwell Centre into an account named merely ‘Benwell Centre’ and the committee of the charity was temporarily renamed as Churchill 50+ Club.
As far as all those involved with the charity were concerned, the charity remained the same in all regards; the purpose, the method by which that purpose was put into effect, the identity of the beneficiaries and the management were largely the same, subject only to natural change. However, the Charity Commission website described the Friends of the Benwell Centre as having ‘ceased to exist’. No constitution could be found for either the ‘old’ or the ‘new’ organisation.
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Where a gift is made to one charitable institution for the purpose of that institution, rather than for the benefit of the institution itself and, before the testator’s death, that institution has been informally reorganised into what may (on the face of it) appear to be a separate institution, the gift may be found to take effect in favour of the charitable body presently administering the original institution’s funds, rather than passing to the intestate beneficiaries: Re Withall  2 Ch 236. Similarly, where a gift is made to a charity for its purposes, rather than for the particular institution itself, it may be held that, if that purpose is being continued by another body, that body should receive the charitable gift by way of a scheme. In the case of unincorporated associations, the gift will usually (unless the construction indicates otherwise) be construed by the Court as a gift for a charitable purpose: Re Vernon’s Will Trusts  Ch 300. However, if a Court deems a gift to be to a specific institution, the gift will lapse if that institution is no longer in existence.
How, then, were the executors (or the Court) to determine whether the Churchill 50+ Club was the same charity or had the same purposes, such that the gift could be put into effect in the way intended by the testatrix? In these situations, where no constitutions appear to be available, those representing the executors or the charity may find that they need to widen their research remit when searching for documents which may shed light on what has taken place.
The first port of call should be the Charity Commission which may, if either charity was or has applied to be registered, have a copy of their constitutions. Further, whilst the Commission website may describe a charity as no longer existing, this may not, in fact, be the case; de-registration may have been the only intention of the charity. In that case, the minutes of and any resolutions passed during the charity’s committee meetings should be examined to determine what was agreed as to its future. If these are not available, reference to the correspondence with the Charity Commission prior to ‘dissolution’ may shed some light on the charity’s intentions and may be relied on, even if it is only available in draft. If, as in the TWM case, there is also another body linked with the charity (there the local council) examination of minutes, reports or policy documents they have produced may provide evidence of whether the charity is likely to have been dissolved. Letters to banks or other parties that provided services to the charity may also explain why any changes in use of those services, related to the change in the charity, have occurred.
In the TWM case, evidence from a committee member, sight of the constitution of the original charity, a draft letter to the Charity Commissioners and minutes of a council policy meeting proved sufficient for the Court to find that the original charity continued to exist and could receive the gift.
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