The Public Benefit of Religious Charities

Which Public? What Benefit? - A Need For Edification

Allan R Morrow

Lancashire Law School, University of Central Lancashire 1999 LLDip research paper, Rutherford Institute Prize in Law and Religion

Introduction Trusts for the advancement of religion form one of the four classificatory heads established in Pemsels Case1 as potentially charitable in law. In order to be so recognized, the aim of any trust must be directed to the provision of something of clear benefit to others in society.2 This element of public benefit requires the satisfaction of two conditions: (i) First, the organisation must be capable of having a positive effect, and not cause harm to the public. (ii) Secondly, those eligible to receive benefits must (except in the case of organisations set up exclusively to relieve financial hardship) comprise a large enough group to be considered as the public or a sufficient section of the community and no personal or private relationships must be used to limit those who may benefit. 3 Recognition of legal charitable status under the fourth head, other purposes beneficial to the community, requires by its definition a positive demonstration of public benefit. Purposes under the first three heads - relief of poverty, advancement of education and advancement of religion - are however assumed to be for the benefit of the community and therefore charitable unless the contrary is shown.4 Religious trusts enjoy still more favourable treatment: In Re Pinion5 the testator donated to the National Trust his studio and contents to be maintained as a collection. Having no judicial knowledge of artistic merit, the court relied upon an expert evaluation. The gift failed, Harman LJ commenting I can conceive of no useful object to be served in foisting upon the public this mass of junk. In Re Watson6 the testatrix made a bequest for the publication of her coreligionist Hobbs fundamentalist Christian writings. The gift was upheld, despite expert evidence that the writings intrinsic value was nil, would add
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Income Tax Special Purposes Commissioners v. Pemsel (1891) AC 531 Charity Commission, The Review of the Register of Charities 1999 - Annex B :The Essential Characteristics of a Charity. The definition continues: .not concerned with benefiting individuals in a way which outweighs any benefit to the public; directed to things that overall are not harmful to humankind; certain and lawful; not for the pursuit of party or other political aims. Idem. per Lord Simonds in National Anti-Vivisection Society v. IRC (1948) AC 31, at 42 and 65 Re Pinion (Deceased), Westminster Bank Ltd v Pinion & Another (1965) 1 Ch 85 Re Watson (Deceased), Hobbs v Smith & Others (1973) 3 All ER 678

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nothing to mankinds knowledge, and would probably merely confirm the religious prejudices of those who were likely to read them. That readership probably did not extend beyond their immediate families. Watsons gift succeeded where Pinions failed because it was religious in nature. For where religion is at issue, the presumption of public benefit is rebutted only through evidence demonstrating that the tenets of a particular sect inculcate doctrines adverse to the very foundations of all religion and subversive of all morality.7 Moreover, the public which benefits may lawfully amount to little more than a family clique. It is submitted that this robust presumption is untenable in principle and in practice, on several inter-related grounds:

the historical tapestry of conformist political, social and legal

relationships between Church and State into which it was woven is now threadbare: the contemporary social fabric is secular, pluralistic and individualistic. its development in case law reveals a line of illogical, inconsistent, illinformed and contradictory rulings. These rulings serve to demonstrate that there is and indeed can be no legal basis on which to posit a religious benefit, and that the attempts of judges to make such analysis and evaluation merely distress the faithful and amuse the cynical.8 it legitimises an inequitable redistribution of public taxed funds in favour of an arbitrary group of ideologies. Social Change and Public Value in Religion In Scottish Burial Society v. Glasgow Corporation9, Lord Wilberforce committed the courts "to keep the law as to charities moving according as new ideas arise or old ones become obsolete or satisfied", a principle affirmed by Lord Hailsham in I.R.C. v. McMullen10, and exemplified notably in National Anti-Vivisection Society v. I.R.C, where Lord Wright said that: ".....trusts [providing particular remedies thought to relieve the distress caused by advanced age, sickness, disability or poverty] may, as economic ideas and conditions and ideas of social service change, cease to be regarded as being for the benefit of the community, and trusts for the advancement of learning or education may fail to secure a place as charities, if it is seen that the learning or education is not of public value." 11 If the courts are thus bound as necessary to challenge the contemporary public value of trusts advancing medicine, science and education, why not religion also? What is its special value?
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per Romilly MR in Thornton v Howe (1862) 31 Beav. 14, at 19 Newark F H Public Benefit & Religious Trusts LQR (1946) 62 p 245 Scottish Burial Reform and Cremation Society v. Glasgow Corporation [1968] AC 138 , at 154 I.R.C. v. McMullen [1981] AC 1, 15E National Anti-Vivisection Society v. IRC (1948) AC 31, at 42. In 1895 the Societys predecessor found charitable status through the public benefit of helping laboratory animals and thus elevating humanity. In 1948 that benefit was considered as far outweighed by the damage caused to humans by the loss to medical science and research, and the consequent detriment to public health.

Religious trusts may be considered to confer a public benefit in four areas: civic improvement, social cohesion, moral instruction, and spiritual development. Robilliard12 considers the assumption of benefit to rest historically on the tangible civic benefits conferred by the old Church in providing charity to the population from its income. The nineteenth century rise of religious pluralism brought the courts a succession of cases demanding an evenhanded treatment of differing ideologies, and so what started life as a real benefit to the population was converted into a legal presumption carefully applied lest the courts be denounced as bigots.13 Two points here arise. Firstly, the legal presumption was and is not of a civic benefit. Church charities have made and continue to make an enormously valuable contribution to the relief of poverty, the care of the sick, the provision of shelter and so forth. But whether this effective altruism springs from their metaphysical persuasions or proceeds despite them, is an open question. For it is not in this that their special charitable status has its lawful origin. Many secular charities engage in tangible social improvement under the other three heads. Religious charities exist to advance religion, and that advancement confers a legally recognised public benefit : [the law] assumes that any religion is at least as likely to be better than none.14 Secondly, the otherwise commendable even-handed agnosticism of the courts15, brings its own problems. As discussed below, the courts careful application of the legal presumption is seriously open to question. A broader view might be that conformity in religion provides the intangible benefit of social cohesion, through the solidarity of a common belief system, and the public expression of that solidarity in ritual enactment. But this will not do. Arguably greater cohesion arises through the litanies of the Kop, the celebration of the Street, and the adoration of boy bands, yet these do not enjoy the benefits of charitable status. Moreover, in a religious pluralism ideologies differ and sometimes contend, surely weakening rather than binding the social fabric. Pearce and Stevens16 consider the benefit comes to the community through the influence and example of its citizens who have adopted and attempted to put into practice the moral and ethical teaching of the religion, citing Neville Estates: the court is entitled to assume that some benefit accrues to the public from the attendance at places of worship of persons who live in the world and mix with their fellow citizens.17 But note that Cross J does not specify that the influence is moral - indeed he does not say anything of it at all, except that he assumes that it occurs.

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Religion and the Law, p65 Robilliard, St.John A. Religion and the Law p65 Per Cross J in Neville Estates Ltd v. Madden (1962) 1 Ch. 832 Ch D It is good for man to have and to practise a religionThe law accept[s] that different religions should each be supported irrespective of whether or not all its beliefs are true Gilmour v Coats and Others (1949) AC 426, at 459, per Lord Reid The Law of Trusts & Equitable Obligations, p360 Neville Estates Ltd v. Madden (1962) 1 Ch. 832 Ch D, per Cross J

It is of course difficult in practice to separate the religious dogma, ethical principles and moral practice which a religion advances. It might be advanced that better relations with God (or with some guiding power or principle) improves ones own morality, and that may provide an indirect social benefit. Yet in Re: South Place Ethical Society18 Dillon J categorically denies that moral improvement is the test, and offers a very narrow definition of religion: Religionis concerned with mans relations with God and ethics with mans relations with man. 19 For Dillon J the benefit conferred by public religious activity exists only insofar as it encourages others in their relation with God, not with man. Indeed, he excludes from the dictionary definition he offers that part which relates faith to morality to social benefit.20 I would therefore consider that the perhaps historically justifiable presumption of public benefit in civic, social and moral elements of religion is no longer sustainable: indeed it is difficult to find a more conspicuous twentieth century example of an obsolete paradigm. The ideological bases of our contemporary society are overwhelmingly secular and pluralistic. The once monolithic and deeply pervasive State religion is marginalised, and competes poorly with other sects and increasingly with other religions, for adherents from a relatively small pool of voluntary neophytes. Codes of conduct and ethical norms do not require a theological validation; the machinery of society functions without the unction of grace. It thus falls to consider the courts understanding of the purely spiritual public benefit conferred. Is it appropriate or indeed possible, in modern secular pluralistic society, to assume that religion, qua religion is of positive effect? A Need For Edification In his judgement in Cocks v Manners21, Wickens VC asserted that religious purposes are charitable, but that can only be true as to religious services tending directly or indirectly towards the instruction or the edification of the public. Gilmore v Coats22 and the more recent Re Hetherington23 were decided on the same criterion of public edification. The following examination of case law thus seeks edification as to who may lawfully be edified, and in what that edification might consist. The first consideration is who, or how many need be edified. Family worship in private24 does not suffice, and prima facie this seems a reasonable application of the nexus25 principle in determining a sufficient
Re South Place Ethical Society, Barralet and Others v Attorney General and Others (1980) 1 WLR 1565 Ibid. Similarly in United Grand Lodge of Ancient Free and Accepted Masons of England v Holborn Borough Council (1957) 1 WLR 1080, the encouragement of members to lead a moral life was insufficient ground for religious charitable status. 20 viz. recognition of some higher power being entitled to obedience, reverence and worship; the general mental and moral attitude resulting from this belief with reference to its effect upon the individual and the community. 21 (1871) LR 12 Eq 574, at 585 22 Gilmour v Coats and Others (1949) AC 426 23 Re Hetherington (deceased) Gibbs v. McDonnell and Another (1989) 2 All ER 129 Ch D 24 Hoare v Hoare (1886) 56 LT 147, also Yeap Cheah Neo and Others v. Ong Cheng Neo (1875) LR 6 PC 381 25 usually and most rigorously applied in educational trusts. See Oppenheim v Tobacco Securities Trust Co Ltd (1951) AC 297
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section of the public. Yet in Re Watson26 a family clique sufficed, and in Re Le Cren Clarke27 and Thornton v Howe28 no evidence was adduced that the beneficiaries were other than negligible in number. In gifts for the saying of masses for the repose of souls the benefit sought by the donor is, par excellence, individualistic, but this will not render the gift decisively uncharitable, so long as the result of the gift is a public benefit.29 Indeed in Ireland, since OHanlon v Logue30 , that benefit is conclusively presumed: Every Mass, whether public or private, is believed to bring Divine blessings to the world.31 Every Catholic - a very large public - is edified merely by the knowledge that somewhere mass is being celebrated. In England a private mass would fail for selfishness. (And public masses likewise until Bourne v Keane32, before which case it was assumed illegal to foist upon the public this junk of mass!) Fortuitously, Catholic sensibilities are now protected by an assumption that the mass will be celebrated in public33. Thus a self-regarding gift is saved by the presumption of an audience. The inconsistency can be pressed further: In Cocks v Manners34 were made gifts to two convents: one devoted to prayer and contemplation, the other to teaching and nursing. The latter succeeded, the former failed. In neither case did the nuns themselves form a sufficient section of the public. The latter was saved only by the assumption of some beneficial influence on some wider public through the good works of the Sisters of Charity. The Dominicans however were merely a voluntary associationworking out their own salvation by religious exercises: a definition, I would submit, which applies to all Christian practice. The style of that practice, as indeed any spiritual practice, is in the final analysis a personal and individual one, and whether that practice is egoistic or altruistic is not, as argued above, a valid concern of the judiciary. Viewed in this light it is difficult to see in what sense a voluntary association of nuns differs from any Church of England congregation. It would appear that a further disqualifying nexus of introvert lifestyle exists in addition to those of blood and contract. Perhaps, as has been suggested35, it is simply that Victorian England was not edified by sequestered piety unaccompanied by acts of civic mercy. Conversely, in Neville Estates Ltd v Madden, notwithstanding that the beneficiaries - members of a Catford synagogue - were a private body, a public benefit did accrue. The nexus rule was considered circumvented since the members met other people outside the synagogue. It seems clear that in Madden the courts underlying motive is to uphold neutrality between religions, and it would indeed be manifestly unjust to disadvantage Jewish religious communities because their formal constitution and rules of association differ from the Church of England model.
Ibid Re Le Cren Clarke (deceased), Funnel and Another v Stewart and Others (1996) 1 All ER 715 28 Thornton v Howe (1862) 31 Beav. 14, 31 LJ Ch 767 29 Attorney General v Hall (1897) 2 IR 426 30 OHanlon v Logue (1906) 1 IR 247 31 Ibid., at 284, per Holmes LJ 32 (1919) AC 815, in which it was conceded that the liberalising statutes of the 19 th century had removed the mass from its unlawful status as a superstitious use. 33 Re Hetherington (deceased) Gibbs v McDonnell and Another (1989) 2 All ER 129 Ch D at 135 34 Cocks v Manners (1871) LR 12 Eq 574 35 in Maguire v Attorney General (1943) IR 238 at 248, per Gavan Duffy J
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But these rulings serves to highlight a peculiarity of the public test: two strata of beneficiaries are required. One might intuitively expect the objects of religious trusts to be the beneficiaries. Yet those actually practising, the synagogue members, the nuns, - and presumably also the Anglican congregation -, are not the lawfully edified, while the rest of society, whether negligible or assumed, hostile or indifferent, is. In a largely secular and pluralistic society it is uncertain where the courts find this edifiable public. In what sense is a Muslim public edified by the dissemination of trinitarian dogma? In what sense is a monotheistic public edified by Buddhism, which asserts unequivocally that belief in a single personal creator god is spiritually stultifying. In a religiously homogeneous society this problem does not arise, and it was presumably in such a society that Lord Parker could declare36 that religion in the law of England means monotheism. More disquieting is Dillon Js recent equation of religion with monotheism.37 The non-theistic ideology of Buddhism is accommodated, he says, either as an exception, per Lord Denning MR in Segerdal 38, or because it does not deny a supreme being, per the affadavit supplied to him by his colleague Christmas Humphreys, the eminent Buddhist. Whilst the religious status of Buddhism is not seriously in doubt, it is surely untenable to advance a definition with such a prominent exception: the definition can have no integrity. In the alternative, it is surely unacceptable to consider Buddhism monotheistic on the opinion39 of a colleague judge. The next consideration is in what edification may consist. The Shorter Oxford Dictionary defines it as a building up in faith and holiness of life; enlightenment; mental or moral improvement. As argued above, we should discount the civic, social and moral connotations, and look therefore to the courts assessment of what tends to a building up in faith and holiness. The courts avow an agnostic approach: A religion can be regarded as beneficial without it being necessary to assume that all its beliefs are true, and a religious service can be regarded as beneficial to all those who attend it without it being necessary to determine the spiritual efficacy of that service or to accept any belief about it.40 This theoretical neutrality is however tempered by the courts ability to employ an objective test, in judging benefit on the evidence before it and not by the opinion of the donor.41 The results are fairly eclectic - faith and holiness in life has been built up by: a memorial window42, worthless writings43, chatting to Jews44, exorcism45, faith healing46, and words
36 37
38

39 40 41 42 43 44 45 46

Bowman v Secular Society Limited (1917) AC 406 HL Re South Place Ethical Society, Barralet and Others v Attorney General and Others (1980) 1 WLR 1565, at 1573 R v Registrar General, ex parte Segerdal (1970) 2 QB 697, at 707 especially when the eminent Buddhists writings are considered academically as below criticism. Gilmour v Coats and Others (1949) AC 426, at 459 per Lord Reid Re Hummeltenberg (1923) 1 Ch 237 Re Hooper (1932) 1 Ch 38 Re Watson (Deceased), Hobbs v Smith & Others (1973) 3 All ER 678 Neville Estates Ltd v. Madden (1962) 1 Ch. 832 Ch D Charity Commissioners Report 1976 HC 389 paras 65-68, cited A. Bradney p131 Re Le Cren Clarke (deceased), Funnel and Another v Stewart and Others (1996) 1 All ER 715

purporting to ameliorate the post-mortem condition (if heard publicly)47. On the other hand, lawful edification is not found in tombstones48, Platonic metaphysics49, mediumistic healing50, and words purporting to ameliorate the post-mortem condition (if heard privately)51. It is difficult in these examples to discern any coherent basis for a judicial consideration of evidence of benefit. There is a fundamental difficulty with the agnostic stance of the courts. The courts recognise that the verity of metaphysical assertions are not justiciable, yet make judgements as to whether the influence of those holding them is beneficial. In the seminal case of Gilmour v Coats52 the public benefit of sequestered piety was again considered. The appellants sought to distinguish Cocks v Manners by the assertion of the Roman Catholic Church, not previously judicially considered, that public benefit accrues through the intercessory prayer of the nuns, and through public edification provided by the example of their cloistered lives. Lord Simonds considered the value of intercessory prayer manifestly not susceptible of proofthe court can act only on proof. Edification by example was something too vague and intangibleindirect, remote and imponderable.and controversial. But as Holmes LJ had pleaded in OHanlon v Logue53 : I am wholly at a loss to know how, if the court cannot determine whether the celebration of a private mass carries with it public benefits, by what means it can determine that a mass said in public confers such benefits. Indeed. The test is vacuous, and public edification would appear to consist in the assumption that by some indeterminate process, some persons are made to feel something, the truth of which is immaterial. A more recent practical difficulty of judicial agnosticism has arisen in relation to new religious movements, for example those of the Unification Church. Widespread public concern arose over allegations that the activities of the Moonies were psychologically damaging and offended against public decency. After three years the Attorney General failed to amass sufficient evidence likely to rebut the presumption of benefit (subversive of all morality). Assuming for the sake of argument that the allegations were true, the protection offered by such a strong presumption becomes a dangerous one. Fiscal Privilege - who pays for what In addition to the legal privileges of avoiding the rules against perpetuity and uncertainty and enjoying the application of the cy-pres doctrine, religious charities are advantaged by several fiscal privileges. As charities

Re Hetherington Lloyd v Lloyd (1852) 2 Sim. (NS) 225 49 Re South Place Ethical Society, Barralet and Others v Attorney General and Others (1980) 1 WLR 1565 50 Re Hummeltenberg (1923) 1 Ch 237 51 Re Hetherington 52 Ibid 53 OHanlon v Logue 1906 1 IR 247, at 285
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they are exempt from income, corporation and capital gain taxes54, and they may recover from the Revenue tax deducted on donations55. As religious charities they gain mandatory partial relief, and may also gain total discretionary relief, from rates on places of public worship and the residences of ministers56. This would seem to be fundamentally inequitable. Among charities, those advancing a metaphysical ideology are more advantaged than humanist ethical ones, while organisations advancing political ideologies cannot be charitable57 and are thus deprived of any benefit. Moreover, being funded from the common purse, these financial benefits are in effect subsidies provided by every taxpayer - an involuntary and automatic tithe supporting ideologies which the taxpayer cannot choose, and may even be fundamentally opposed to. As argued above, this is in principle unsupportable in a religiously homogenous society. The economic factor is a further aggravation of the problem of determining an edifiable public. Why should a muslim pay for the advancement of christianity? The situation is also open to abuse. It is enough for any sect to posit a deity and disseminate its beliefs in order to gain considerable financial advantage. Given the difficulty of proving a public disbenefit, there is every opportunity for bad faith. It is unfortunate that a charitable trust should automatically attract fiscal privileges, for the question whether a trust to further some purpose is so little likely to benefit the public that it ought to be declared invalid, and the question whether it is likely to confer such great benefits on the public that it should enjoy fiscal immunity are really two quite different questions. The logical solution would be to separate them and to say that only some charities should enjoy fiscal privileges. 58 Conclusion In a modern, secular and pluralistic society the presumption of public benefit in religious charitable trusts is not sustainable. The grounds of the presumption are not coherent, and its application is arbitrary and inequitable. It is also simply not necessary. Religious associations can be assessed as to charitable status under the fourth head. The courts can there make a stringent evaluation of public benefit against the more comprehensible values of altruism and ethics, avoiding the vagaries of metaphysics and the pitfalls of bias. The Charity Commission is currently undertaking a systematic review of the Register of Charities. It is to be hoped that serious consideration will be given to the reform of this muddled area of law.
s505 Taxes Act 1988, s256 Taxation of Chargeable Gains Act 1992 - so long as the fund is applied to the charitable purpose. 55 s25 Finance Act 1990 (Gift Aid) 56 s40 General Rate Act 1967 57 McGovan v AG (1981) 3 All ER 493 58 per Lord Cross, Dingle v Turner (1972) AC 601
54

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