The prevention or relief of poverty
- What is meant by ‘the prevention or relief of poverty’?
- Charity Commission guidance
- Related decisions of the Commission
- Attorney General’s reference to the First-tier Tribunal (Charity) regarding some poverty cases
This section brings together our guidance, reports, key decisions and other resources that could help trustees understand the scope of ‘the prevention or relief of poverty’.
1. In the past, the courts have tended to define ‘poverty’ by reference to financial hardship or lack of material things but, in current social and economic circumstances, poverty includes many disadvantages and difficulties arising from, or which cause, the lack of financial or material resources.
2. There can be no absolute definition of what ‘poverty’ might mean since the problems giving rise to poverty are multi-dimensional and cumulative. It can affect individuals and whole communities. It might be experienced on a long or short-term basis.
3. Poverty can both create, and be created by, adverse social conditions, such as poor health and nutrition, and low achievement in education and other areas of human development.
4. The prevention or relief of poverty is not just about giving financial assistance to people who lack money; poverty is a more complex issue that is dependent upon the social and economic circumstances in which it arises. We recognise that many charities that are concerned with preventing or relieving poverty will do so by addressing both the causes (prevention) and the consequences (relief) of poverty.
5. Not everyone who is in financial hardship is necessarily poor, but it may still be charitable to relieve their financial hardship under the description of purposes relating to ‘the relief of those in need by reason of youth, age, ill-health, disability, financial hardship or other disadvantage
6. In most cases, we will treat the relief of poverty and the relief of financial hardship the same. Generally speaking, it is likely to be charitable to relieve either the poverty or the financial hardship of anyone who does not have the resources to provide themselves, either on a short or long-term basis, with the normal things of life which most people take for granted.
7. Examples of ways in which charities might relieve poverty include:
- grants of money;
- the provision of items (either outright or on loan) such as furniture, bedding, clothing, food, fuel, heating appliances, washing machines and fridges;
- payment for services such as essential house decorating, insulation and repairs, laundering, meals on wheels, outings and entertainment, child-minding, telephone line, rates and utilities;
- the provision of facilities such as the supply of tools or books, payments of fees for instruction, examination or other expenses connected with vocational training, language, literacy, numerical or technical skills, travelling expenses to help the recipients to earn their living, equipment and funds for recreational pursuits or training intended to bring the quality of life of the beneficiaries to a reasonable standard.
8. The provision of money management and debt counselling advice are examples of the ways in which charities might help prevent poverty.
It no longer forms part of our public benefit guidance and should now be read together with our set of 3 public benefit guides. It will remain available to read until we publish replacement guidance.
The prevention or relief of poverty for the public benefit This guidance explains the meaning of the prevention or relief of poverty. It also includes supplementary public benefit guidance for charities whose aims include the prevention or relief of poverty.
The promotion of social inclusion This guidance is for trustees of existing charities, and people thinking of setting up a new charity, who wish to include the promotion of social inclusion as one or more of their charity’s aims.
Review of a decision concerning an application for charitable status by an organisation set up to relieve poverty by providing a hardship fund. This decision involves consideration of the meaning of poverty and financial hardship in charity law and of a small, connected, beneficial class.
AITC Foundation Decision
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Attorney General’s reference to the First-tier Tribunal (Charity) regarding some poverty cases
The Attorney General has made a reference to the First-tier Tribunal (Charity) (‘the Tribunal’) in order to clarify the law relating to some charities for the relief of poverty and the public benefit requirement.
The reference asks whether a benevolent fund for the relief of poverty can have charity status if it benefits only:
- those people related to a certain individual, or
- employees of a particular employer or employers, or
- the members of a particular society or organisation
The reference also asks whether the public benefit requirement applies to charities set up to prevent poverty in the same way that it applies to those set up to relieve poverty.
The Tribunal’s response will be legally binding. If the Tribunal’s ruling could consequently affect your organisation, you could consider whether your organisation, either directly or through its governing body, might wish to apply to the Tribunal for permission to be joined as a party to the reference.
The Tribunal can give permission for:
- the charity trustees of any charity which is likely to be affected by the Tribunal’s decision on the reference
- any such charity which is a body corporate
- any other person who is likely to be so affected
to be joined as a party to the reference proceedings.
There is no set procedure for applying to be joined as a party. If you consider that you fall into one of the categories above you could write to the following address, asking to be joined as a party to a reference.
You will need to explain how you are likely to be affected by the Tribunal’s decision on the reference. The Tribunal will then consider whether to give you permission to join as a party. The Tribunal has directed that persons should apply to be joined as parties by 20 March 2011.
You can find guidance on the Tribunal’s website about:
- joining as a party to a reference
- where you can obtain legal support
- whether you might have to pay any costs
- general information about hearings
- this reference and its outcome
The Tribunal can contacted at:
The First–tier Tribunal (Charity)
Tribunals Operational Support Centre
PO Box 9300
Telephone: 0845 6000 877
Fax: 0116 294 4253
E mail: email@example.com