Timeline prepared by Richard A. Brunton for The Pemsel Case Foundation.

Countries are indicated by their current flags even though the flag may not have been in use at date of the timeline element.

Year Description
The King’s School, Canterbury – Oldest British charity 597

The school claims it was established in this year by Saint Augustine, “Apostle to the English” and first Archbishop of Canterbury, with the consent of Æthelberht, King of Kent. If so, it is the oldest still operating English charity. http://www.kings-school.co.uk.

Beginnings of Oxford University 1096

The Oxford University website (https://www.ox.ac.uk/about/organisation/history) claims that “teaching existed at Oxford in some form in 1096 and developed rapidly from 1167, when Henry II banned English students from attending the University of Paris”. If so, Oxford qualifies as the oldest university in the English-speaking world. Its size, organization, reputation and internal government grew, and starting in 1249 the first of many subsidiary colleges were established by royal and other founders. Although the university itself was a recognized legal corporation “by prescription” from early times, it was not until 1571 that it and Cambridge University had their corporate status confirmed by Act of Parliament (UK 13 Eliz. 1, c 29).

Original Magna Carta of King John – Church’s probate jurisdiction 1215

Article 27 of the famous original Magna Carta of 1215 confirmed church courts’ jurisdiction over dispositions of personal property of those who die intestate. By implication, this also confirmed the church’s control over wills in general and over bequests to charity in particular, because of the church’s influence over the devout. But the church had no jurisdiction over charitable devises—dispositions of land or other real property. Under feudalism, the inheritance or disposition of real property remained under the jurisdiction of the lords’ courts, and ultimately the king’s courts.

Original Manga Carta of King John – Church patrons’ rights 1215

Article 46 of King John’s Magna Carta granted to church patrons—lords who had founded, or whose ancestors had founded, an abbey or monastery—interim custody over its property and revenue while the appointment of a new abbot or head was awaiting royal and papal confirmation.

Reissued Magna Carta – Mortmain 1217

Reissued during the infancy of King Henry 3. A new article 36 was added which prohibited landowners from giving land to church entities—the first law against “mortmain”. The main form of feudal taxation consisted of charges (“reliefs”), including one that had to be paid by a vassal’s heir to the immediate feudal overlord upon the vassal’s death. But the church was exempt from such taxes (no part of holy church ever “died”). Thus, giving real property to any religious entity effectively cut off a major source of the overlord’s revenue and ultimately the king’s revenue as well. For this reason, charitable gifts of land to religious entities came to be strictly controlled by this and other “mortmain” laws referred to below.

Final version of Magna Carta – Church patrons’ rights – Mortmain 1225

Articles 33 and 36 re-enacted article 46 of the 1215 version and article 36 of the 1217 version. This Magna Carta, which was issued when King Henry 3 became an adult, found its way into the English statute book.

Statute De Viris Religiosis (England) – Mortmain 1279

Later renamed the Mortmain Act, 1279, this statute prohibited all sales and gifts of land in mortmain, i.e. to church entities, unless the superior lords of the property—including the king as lord paramount—all consented beforehand in what was known as a “mortmain licence”.

Royal charter for London Bridge 1282

This charter re-organized the religious and civic groups responsible for maintaining London Bridge—in effect establishing the first of many bridge charitable trusts. See Bridges, Law and Power in Medieval England, 700-1400 by Alan Cooper (Boydell Press, 2006), p 119.

Second Statute of Westminster – Selling donated land 1285

UK 13 Edward 1, c 41, forbade monasteries, religious hospitals for the poor and churches which had received gifts of land from the king or other lords, from selling such donated land. If donated land were sold, both it and the purchaser’s money would be forfeited to the original donors, the King or other lords, or their successors.

Second Statute of Westminster – Mortmain by litigation 1285

UK 13 Edward 1, an omnibus legal reform statute, c 32 abolished a legal trick by which the courts were being used to get around the mortmain laws: Religious entities could no longer get land by suing the owner who would, by agreement beforehand, default in defending the suit, thereby obliging the court to award the land to the religious entity.

Second Statute of Westminster – Mortmain by crosses 1285

UK 13 Edward 1, c 33, prevented owners from setting up crosses on their land. (It was apparently thought that setting up a cross would make land subject to religious entities such as the Templars and Hospitallers, yet another way to get around the mortmain laws.)

Statute Quia Emptores (England) – Non-feudal selling of land – Mortmain 1290

UK 18 Edward 1, statute abolishing subinfeudation. Under feudalism, when a property owner wished to sell land, he had to do so by making the purchaser his feudal vassal for the land in question. Instead, under this Act, the purchaser would take the seller’s place in the feudal hierarchy and become the feudal vassal of the seller’s lord. This was the beginning of the end for feudalism. It was also enacted that this new ability could not be used to get around the mortmain laws—mortmain licences were still required for religious entities to get land.

Mortmain licence to the goldsmiths of London 1341

Letters patent 15 Edward 3, an interesting example of a mortmain licence. The guild of goldsmiths of London needed to set up a charitable home to take care of their brethren rendered disabled from breathing the fumes of hot mercury used in melting gold. They had to obtain this licence from the King in order to give it rentable lands providing financial support. See Rymer’s Foedera, 1st ed., vol. 2, part 2, p 1157; 2nd ed., vol. V, p 246; 3rd ed., vol. 2, part 4, p 98.

The Vision of Piers Plowman – Charitable purposes 1376

A religious allegorical poem attributed to William Langland. It contained wording about charitable purposes that apparently inspired those who drafted the list of example charitable purposes in the preamble of the Charitable Uses Act, 1601. See The Vision of Piers Plowman, by A. V. C. Schmidt (1978), pp 77-79.

Revenue from church offices (England) 1391

UK 15 Richard 2, c 6, ensured that when parish church offices were purchased (which they could be, in those days), those who received the money (the “appropriators”) had to allocate part of it to maintain the poor and to pay the vicar in the parish.

Extending mortmain to secular corporations (England) 1391

UK 15 Richard 2, c 5, later renamed the Mortmain Act, 1391. This statute tightened up the mortmain laws by preventing landowners next door to churches from allowing their land to be used as churchyards or graveyards; by attempting to forbid the “use” as a means of putting lands into mortmain (see further under the 1535 Statute of Uses below); and most importantly, by extending the mortmain restrictions to non-religious corporate entities, such as guilds and fraternities, and cities and towns; because these too were a way to get around paying taxes.

Visitation of Hospitals Act, 1414 (England) 1414

UK 2 Henry 5, c 1, requiring bishops to inspect secular charities for the poor. This was a precursor to later Acts for the regulation of charities, such as those of 1563, 1597 and 1601 below.

Taxation – Exemption for universities (England) 1496

UK 12 Henry 7. c 13, s 17. Annual taxation Acts were passed to provide the king with more funds for his wars than the feudal system provided. This Act began the practice of exempting certain charities by name or category from tax, a practice which continued repeatedly till 1799.

Religious institutions for poor relief destroyed (England) 1535

About 800 “hospitals”, that is, religious charities caring for the poor, aged or disabled, were included in Henry 8’s dissolution of the monasteries. These had apparently been the entire social safety net of the country. As well, the monasteries had been important employers, and their abolition caused major economic disruption and unemployment. All this resulted in an increase of England’s population in dire poverty. It was not until Elizabeth 1’s revision of the “Poor Laws” decades later that a secular, municipal-based welfare system began to solve this entirely man-made problem. The charity reform statutes of 1563, 1572, 1575, 1597 and 1601 listed below were components which aimed to rebuild and foster a (mainly secular) charitable sector that would relieve the local taxpayers burdened with the new Poor Laws.

Statute of Uses (England) 1535

UK 27 Henry 8, c 10. This Act attempted to abolish the “use”, the original version of what today we call a “trust”. This was a way of transferring land indirectly, through an intermediary. The intermediary would receive the legal title and become the owner of the land—not for his own benefit but for the benefit of someone else, the true or beneficial owner under the law of equity. In particular, a religious entity could get land indirectly donated to it via such a use, another way to circumvent the mortmain laws. Under the use, it would get the beneficial ownership of the donated land (i.e. most of its revenues) because the land would be legally owned by an intermediary not subject to the mortmain laws. The Statute of Uses “executed the use”, that is, required legal title to pass directly to the beneficiary of the use, who would thereby become the legal titleholder, pay feudal taxes and be caught by the mortmain laws. It was effective until Jane Tyrrel’s case in 1557.

Suppression of Religious Houses Act, 1535 (England) 1535

UK 27 Henry 8, c 28, also called the Dissolution of Lesser Monasteries Act. This was the first of several statutes passed for the purpose. Over the next few years, as part of his break with the Roman Catholic Church, Henry 8’s government abolished the entire monastic system in England (over 400 institutions), executed its members who did not co-operate, pensioned off those who did, and seized and sold all monastic properties, which by then amounted to roughly ¼ of England’s real estate.

Jane Tyrrel’s case – Uses become trusts 1557

Dyer 155a, 73 ER 336. The 1535 Statute of Uses lasted about 21 years; until, in this case, the courts ruled that it did not apply to a “use upon a use”, which came to be known as a “trust”. Note that the Statute of Uses did not, in general, apply to charitable uses since those are purpose trusts that do not have specific beneficiaries. Thus the Statute of Uses should not be confused with the subsequent 1601 statute of charitable uses.

Poor relief (England) – Highway and bridges 1563

UK 5 Eliz 1, c 3, s 9, requiring bishops to inspect secular highway and bridge charities.

The Hospitals for the Poor Act, 1572 1572

UK 14 Eliz 1, c 14. Re-established a system of oversight and control of (secular) hospitals by the local bishops (originally instituted in 1414). However, visitation of hospitals could do very little to relieve more poor. Regulating hospitals couldn’t make more hospitals.

Poor relief (England) – Houses of correction – Poorhouses 1575

UK 18 Eliz 1, c 3, s 4, 5, 9. Houses of correction were established as a means of forcing “rogues and vagabonds” to work. Ordinary landowners were permitted to devise land to support poorhouses for those who could not work, in effect exempting such gifts from the mortmain laws.

Charitable collection licence – Repair of port 1585

An interesting example of a charitable collection licence (or “King’s Brief”) for rebuilding the pier of St Ives, Cornwall. Tudor Royal Proclamations by Hughes and Larkin, vol. II, No. 675.

Hospitals for the Poor Act, 1597 (England) – Poorhouses 1597

UK 39 Eliz 1, c 5. This Act attempted to increase the number of poorhouses by allowing ordinary landowners to establish and give property to support them without royal charter or mortmain license. Before, such royal consent had been required to set up a hospital (in the sense of a refuge to take care of the poor), both to incorporate it and to obtain a mortmain license that would allow it to be endowed with rentable lands providing financial support.

Charitable Uses Act, 1597 (England) 1597

UK 39 Eliz 1, c 6, predecessor of the Charitable Uses Act, 1601 described below.

Charitable Uses Act, 1601 (England) – Charities regulation 1601

UK 43 Eliz 1, c 4, also known as the “Statute of Charitable Uses” and often called simply the “Statute of Elizabeth”. This is the most important law in charity history. It reformed the regulation of charities by setting up ad hoc temporary local courts—“commissioners of charitable uses”, including the local bishop, appointed by the Lord Chancellor. When set up from time to time, they could investigate, protect and enforce charities, with the Court of Chancery acting as a supervisory appeal court. More importantly, the Act had a preamble listing examples of typical (and mainly secular) charitable purposes of this era. This new legal system was defunct by 1800, having been superseded by other Chancery processes, but the preamble’s list of example charities was the origin of centuries of charity case law to this day.

Charitable Uses Act, 1601 (England) – Example charitable purposes in preamble 1601

UK 43 Eliz 1, c 4. Using modern spelling, the preamble listed these example charitable uses: “some for relief of aged, impotent and poor people; some for maintenance of sick and maimed soldiers and mariners, schools of learning, free schools and scholars in universities; some for repair of bridges, ports, havens, causeways, churches, seabanks and highways; some for education and preferment of orphans, some for or towards relief, stock or maintenance for houses of correction, some for marriages of poor maids, some for supportation, aid and help of young tradesmen, handicraftsmen and persons decayed, and others for relief or redemption of prisoners or captives, and for aid or ease of any poor inhabitants concerning payment of fifteenths, setting out of soldiers and other taxes”.

Proclamation – Colleges under the 1601 statute of charitable uses 1605

3 James 1. Stuart Royal Proclamations by Larkin and Hughes, vol. I, No. 55. Universities and colleges had been excluded from the controls of the 1601 statute, apparently because they were already subject to an equivalent system of visitors. This proclamation was issued out of a concern to ensure they and their visitors should follow the statute’s spirit.

Sir Francis Moore’s Reading on the 1601 statute of charitable uses 1607

A “Reading” was a series of lectures on a legal subject given by a prominent lawyer in front of the judges and fellow members of his legal fraternity; followed by debates, arguments and a feast. Sir Francis Moore’s Reading reviewed the then still new statute of charitable uses from every angle. It was later claimed that he had been the statute’s drafter, but that is not confirmed; although he was indeed an M.P. when both the 1597 and 1601 statutes were passed. His personal manuscript of his own Reading (in “Law French”) has survived but has never been published. In 1676, Duke published a shortened version of the Reading (in English), claiming that this version had been drawn up by Moore himself.

Lord Chancellor – Charitable collection licences 1626

Rymer’s Foedera, 3rd ed., vol. 8, part 1, p 200. Charles 1 delegated to his chancellor the royal power to permit charitable collections.

Proclamation – Forbidding charitable collection for church repairs 1629

5 Charles 1. Stuart Royal Proclamations by Larkin and Hughes, vol. II, No. 121. Charles 1 forbade charitable collections for the repair of churches, since that was the legal duty and charge of the parish.

Proclamation – Charitable collection licences required 1633

8 Charles 1. Stuart Royal Proclamations by Larkin and Hughes, vol. II, No. 167. Charles 1 prohibited anyone from conducting a charitable collection without a licence.

Scottish statute of pious donations 1633

Statutes of Scotland, 1633, Act VI. This Act was somewhat like the 1601 English statute of charitable uses.

Irish statute of pious uses 1634

Ireland, 10 Charles 1, Sess 3, c 1. This Act was also slightly similar to the 1601 English statute of charitable uses.

Charitable collection licence – To Build a port 1635

Rymer’s Foedera, 3rd ed., vol. 8, part 2, p 137. Authorizing charitable collection to raise £5,000 to build a permanent port in Portpatrick, Scotland, to connect to Donaghady, Ireland.

Ordinance (England) – Relief of captives 1643

Parliamentary ordinance for charitable collection to relieve captives in Algiers. Acts and Ordinances of the Interregnum 1642-1660, pp 134-135.

The Law of Charitable Uses by John Herne 1660

First charity law book.

Royal Society established by charter 1662

The Royal Society’s website claims it is “the oldest scientific academy in continuous existence”. Its first royal charter was granted in 1662 but replaced by subsequent ones in 1663 and 1669, and now repeated in the current supplemental charter of 2012. Apparently the first in a long line of English learned society charities, its objects were to do scientific research and publish the results. https://royalsociety.org/about-us/governance/charters/.

The Law of Charitable Uses, 2nd ed., by John Herne 1663

Expanded edition of Herne’s 1660 book.

Insolvent debtors’ relief Act – Regulating charities for prisoners for debt 1670

UK 22-23 Charles 2, c 20, 10. Authorized all judges and any commissioners for charitable uses under the 1601 Act to investigate, identify, register and put right any funds donated for the benefit of prisoners for debt. Repeated in the Debtors Imprisonment Act, 1758, UK 32 George 2, c 28, s 9.

The Law of Charitable Uses, 3rd ed., by George Duke 1676

Duke’s expanded edition of Herne’s 1663 book included an abridgment (in English) of Sir Francis Moore’s 1607 Reading on the Statute of Charitable Uses.

Mortmain licensing Act (England) 1695

UK 7 & 8 William 3, c 37. In 1688, the Bill of Rights declared the King could no longer arbitrarily “dispense with” laws. As it was thought this meant he could no longer issue mortmain licences, this 1695 Act was passed to preserve that royal function.

Falkland v. Bertie – Parens patriae jurisdiction 1696

2 Vern 333 at 342; 23 ER 814 at 818. The Court of Chancery had long had jurisdiction over (amongst many other things) child welfare, mentally disabled persons and charities; but this is the first case in which the court described these areas of its jurisdiction as deriving from the Crown’s traditional role as parens patriae (parent of the country)—the theory apparently being that Chancery, on the Crown’s behalf, exercised the royal “parental” powers to protect people who cannot represent themselves in court to protect their own interests.

Queen Anne’s Bounty Act, 1703 (England) – Advancement of religion 1703

UK 2 & 3 Anne c 20.  This Act instituted a major reform in (Anglican) church finances to fund “poor livings” (churches with insufficient revenue to pay a minister). A provision (s 4) was included to allow ordinary citizens to make charitable donations and bequests for the same purpose, again without having to obtain mortmain licences.

Collection of charity money Act (England) 1705

UK 4 & 5 Anne c 25. This Act reformed the system of royal licences to conduct charitable collections from the public (“King’s Briefs” as they became known).

Charitable Corporation – Poverty relief through business (England) 1707

The “Charitable Corporation for the Relief of the Industrious Poor” was an attempt in 1707 to marry poor relief with private investment. The corporation aimed to carry on, for charitable purposes, the business normally done by pawnbrokers. It made loans to the poor on the security of personal property deposited with it and supposedly kept in secure warehouses. The money for the loans came from investors who bought tradeable shares in the corporation, initially in expectation of ordinary commercial rates of return. Massive fraud was revealed in 1731.

Guy’s Hospital Act (UK) – “Voluntary hospitals” 1724

UK 11 George 1, c 12. This and about thirty other subsequent Acts like it established a series of “voluntary hospitals”, which were hospitals in the medical sense, as opposed to poorhouses—explicitly recognizing them as charities.

Charitable Corporation – Fraud scandal (UK) 1731

The 1707 Charitable Corporation was gradually taken over by unscrupulous persons who converted it into an early form of Ponzi scheme. They promised high returns on shares, returns that were actually funded by the sale of more shares. They had the corporation issue bonds that were supposedly secured by property deposited in the warehouses, but in fact this property had long gone. They lent money to themselves using fictitious collateral and outright fraud and forgery. The corporation’s shares and bonds were openly traded and attracted thousands of investors, until it was revealed in 1731 that it was defaulting on its obligations. The financial managers fled the country, and the corporation imploded. Several years of parliamentary investigations ensued which revealed that investors, plus the poor who had deposited their property, had lost £350,000 (a tremendous sum at that time, roughly 10% of Britain’s GNP).

“Statute of Mortmain” (UK) – Strict limits on donations to charity 1735

UK 9 George 2, c 36, later renamed the Charitable Uses Act, 1735. This Act was for two centuries known as another “statute of mortmain”, but it was not actually about mortmain in its original meaning. That was concerned with keeping church and corporate entities from acquiring land without royal permission. Instead, this Act placed major restrictions on charitable donations. A person could only give land, or interests connected with land, to charity while still alive; in other words, charitable devises by will were no longer allowed. But charitable bequests of money or personal property were still allowed under various restrictions. Thus began a legal era when (English) courts were actively hostile to charitable giving by will, apparently believing it was an improper and useless waste of family estates.

A-G v. Peirce (Chancery) – Medical hospitals charitable 1740

Barn. C. 208, 27 E.R. 615. A legacy to the Hospital for Incurables in Westminster allowed as a valid charitable purpose trust.

Charitable Corporation v. Sutton (Chancery) 1742

9 Mod 349, 88 ER 500, 2 Atk 400, 26 ER 642. Following the collapse of the Charitable Corporation in 1731, this case established the principle that the directors of a corporation are jointly and severally liable for frauds committed under their watch.

French royal declaration on mortmain in Canada 1743

Concerned that too much land and wealth was accumulating in the hands of the church in what is now Quebec, the French king Louis 15 issued a declaration re-asserting French mortmain laws: No property was to be given or sold to church institutions or corporations there without royal permission. Édits, ordonnances royaux . . . (1803), vol. 1, pp. 537-543; (1854), vol. 1, pp. 576-581. Note that the branch of English law dealing with charities never applied in Quebec’s law (although, of course, other concepts and rules covered somewhat similar ground). This French mortmain law implanted in Quebec did not affect charities. It only governed the ability of religious institutions and corporations to acquire and own land, and in that sense it continued in various forms until finally repealed in 1992 (SQ 1992, c 57, s 609).

Courts of equity in early Canadian colonies 1749

As and when the British empire acquired its various colonial possessions which eventually became Canadian provinces, the settlers brought with them the common law, and the initial governors used their royal powers to establish preliminary court systems, starting with Nova Scotia in 1749. Once legislatures were set up, Acts were passed to enlarge and amend these colonial court systems, which were for the most part modeled on the English court system. That featured the separate court of chancery in charge of the law of equity—including charity law. Thus, one by one the early Canadian colonies acquired their own courts of equity with jurisdiction to apply charity law. The British Tradition in Canadian Law by Bora Laskin (London, 1969), pp. 10-19.

British museum established (UK) 1753

UK 26 George 2, c 22. Sir Hans Sloane, a wealthy and prominent scientist and collector, left his books and historical and scientific items to the king on condition that compensation of £20,000 be paid to his heirs and that the collection would be in a museum for the public. This Act accepted his legacy, his collection was combined with the similar Cottonian, Harleian and royal collections, and the museum was built and opened in 1759. There was much subsequent legislation, acquisitions and rebuilding, and the museum was accepted as a charity in a case in 1826.

King’s College, NS, established 1789

SNS 29 George 3, c 4 ( Statutes at large, vol. 1, pp. 268-9). Founded in Windsor, NS, by united empire loyalists who had lost their previous King’s College in New York (which is now Columbia University), the college was made a university by royal charter in 1802 and claims to be the oldest university in what is now Canada. (A disastrous fire in 1920 caused it to move to Halifax, where it is now in partnership with Dalhousie University.)

First UK Income Tax Act – Exemption for Charities 1799

UK 29 George 3, c 13, s 5. Unlike previous taxation Acts, the exemption from paying the new income tax extended broadly to any “corporation, fraternity or society of persons established for charitable purposes only”. This has been the rule, more or less, in tax systems down to the present.

Accumulations Act, 1800 (UK) – Time limit on perpetuities 1800

UK 39 & 40 George 3, c 98, also known as the “Thellusson Act”. Gifts under trusts and bequests under wills, including donations to charities, must vest within the lifetime of any relevant person alive at the time the trust or will comes into effect, plus 21 years.

Gifts for Churches Act, 1803 (UK) 1803

UK 43 George 3, c 108. Gifts permitted of up to 5 acres or £500 for Anglican churches.

Morice v. Durham (Bishop of) – 1601 preamble is main source of charity law 1805

9 Ves Jun 399, 32 ER 656; 10 Ves Jun 522, 32 ER 947, Chancery. In this case, the 1601 preamble was held the primary reference for determining whether a purpose is charitable. Also, classifying charitable purposes into four broad categories was suggested for the first time by one of the lawyers (Mr Romilly); later confirmed in the 1891 Pemsel case.

Law of Charitable uses, 4th ed., by Richard Bridgman 1805

Duke’s Law of Charitable Uses of 1676 was expanded and re-organized in 1805. Since then there has been a long series of legal textbooks on charity law, some of which have been influential and cited in the courts.

Charities Procedure Act, 1812 (UK) 1812

UK 52 George 3, c 101, also known as “Romilly’s Act”, attempted to create speedier Chancery procedures for charities.

Charitable Donations Registration Act, 1812 (UK) 1812

UK 52 George 3, c 102. Initiated the first charities reporting system.

McGill College established (Lower Canada) 1821

Royal charter of 21 March 1821, granted at the request of the “Royal Institution for the advancement of learning”, an early education agency enacted by the Lower Canada legislature (SLC 1801, c 17). The college was established pursuant to the 1811 will of prominent Montreal merchant James McGill. A later royal charter of 6 July 1852 made the college a university.

A-G v. Lonsdale (Earl of) – Education 1827

1 Sim 105, 57 ER 518, A school for education of gentlemen’s sons—who would presumably not have been poor people—was ruled charitable.

Roman Catholic Charities Act, 1832 (UK) 1832

UK 2 & 3 William 4, c 115. Legal prohibitions on Catholic charities removed, in Great Britain. (Catholic equality had already been enacted in what is now Quebec; similar Catholic religious relief amendments either had been or were eventually passed in the other provinces.)

USA v. Drummond (Rolls) – Smithsonian Institution 1838

A prominent and wealthy English scientist, James Smithson, made a will under which (in the events which happened) the immense sum of £100,000 was left to the USA in trust “to found at Washington, under the name of the Smithsonian institution, an establishment for the increase & diffusion of knowledge among men”. In a legal first, the American president by his representative Richard Rush appeared in the UK Court of Chancery as a litigant to claim this bequest, which was approved as a good charitable gift; and all that money was shipped in gold to the U.S. treasury, and eventually used by Congress to establish the famous Smithsonian. (The case went unreported at the time; see Chancery decree at UK National Archives, C 33 / 886 / 002, Chancery: Entry Book of Decrees and Orders, 1837-38 vol. B, pp 579a, b. See also documentation at the website of the Smithsonian Institution itself; several Acts of Congress; and citations of this case in Whicker v Hume (1851), 11 ER 50 at 57 and 62-3, 51 ER 381 at 384-5; Russell v Allen (1883), 107 US 163 at 172; In re Macduff (1896), [1896] 2 Ch 451 at 472-3.)

Religious Opinions Relief Act, 1846 (UK) 1846

UK 9 & 10 Victoria, c 59, s 2. Jewish charities allowed, in England. A similar amendment was eventually passed in Ontario (SO 1890 c 74.)

Doe d Anderson v. Todd (Upper Canada) – Mortmain 1846

2 UCQB 82. English mortmain laws were in force in what is now Ontario. This was despite the fact that British courts ruled that the so-called mortmain statute of 1735 was inapplicable in the colonies and applied only in England. Ontario thus became an anomaly in this regard.

The Charitable Trusts Act, 1853 (UK) – EW Charity Commission established 1853

UK 16 & 17 Victoria, c 137. This Act initiated what is now known as the Charity Commission for England and Wales, the quasi-judicial agency which regulates the charities sector there. No such regulator was ever established in Canada or any province (although a small unit in Ontario carries out a few similar functions). Legally, charities in each province are regulated by courts wearing their chancery or equity hats, in cases brought by wills, trusts or tax litigants or by the Attorney General (the department of justice of the province). Modern cases involving the Attorney General are very rare, and provincial regulation of the charities sector appears to be largely abandoned. This is despite the fact that Canada’s 1867 constitution gave jurisdiction over charities to the provinces. In effect, regulation of the charity sector in Canada is done, in the provinces’ absence, by the federal income tax administration (and, in a similar way, the Quebec tax administration).

Literary and Scientific Institutions Act, 1854 (UK) 1854

UK 17 & 18 Victoria, c 112. Permitted gifts and bequests to such institutions.

Whicker v. Hume (UKHL) – No mortmain in colonies 1858

7 HLC 124, 11 ER 50. English mortmain law (of 1735) was confirmed as inapplicable in colonies. Ontario was an exception to this rule.

Recreation Grounds Act, 1859 (UK) 1859

UK 22 Victoria, c 27. Gifts of land allowed for parks and playgrounds.

Thornton v. Howe – Religious purposes 1862

31 Beav 14, 54 ER 1042 (Rolls). Advancement of any religion, no matter how eccentric, may be charitable if it is neither contrary to all religious principles nor subversive of all morality.

Gladstone’s speech suggesting no tax exemption for charities 1863

On 4 May 1863, William Gladstone, the Chancellor of the Exchequer (i.e. UK minister of finance)—and later a long-time prime minister—made a budget speech in the house of commons seriously proposing that charities should have no tax exemptions. (His proposal was left to a free vote as he was only stimulating discussion, and indeed it did not pass.) He argued that charitable tax privileges were really a type of public expenditure, but one over which there was little or no public control or accountability; and he cited many shocking examples of charities wasting and misusing their funds. The public benefits that charities are supposed to carry out could, he suggested, be achieved in better, more efficient and more accountable ways. Gladstone’s Speeches by A. T. Bassett (London: 1916), pp. 312-341.

British North America Act, 1867 – Federal/provincial constitutional roles re charities 1867

UK 30 & 31 Victoria, c 3, subsequently renamed the Constitution Act, 1867, Canada’s main constitutional statute. It gave primary legislative jurisdiction over charities to the provinces; but legislative jurisdiction over the tax systems which define the fiscal privileges of charities was shared between the provinces and the federal level.

British North America Act, 1867 – Federal tax jurisdiction 1867

“91…. the exclusive Legislative Authority of the Parliament of Canada extends to all Matters coming within the Classes of Subjects next hereinafter enumerated; that is to say, . . . 3. The raising of Money by any Mode or System of Taxation.”

British North America Act, 1867 – Provincial tax, charity and other jurisdictions 1867

“92. In each Province the Legislature may exclusively make Laws in relation to Matters coming within the Classes of Subjects next hereinafter enumerated; that is to say, . . . 2. Direct Taxation within the Province in order to the raising of a Revenue for Provincial Purposes. . . . 7. The Establishment, Maintenance, and Management of Hospitals, Asylums, Charities, and Eleemosynary Institutions in and for the Province, other than Marine Hospitals. . . . 13. Property and Civil Rights in the Province. . . . 16. Generally all Matters of a merely local or private Nature in the Province.”

Supreme Court of Judicature Act, 1873 (UK) – Equity and regular courts combined 1873

UK 36 & 37 Victoria, c 66. In this Act, the court system of England and Wales was reorganized. All judges became judges of both law and equity, including charity law. But in practice, the unified court system still had specialized subdivisions, and the “Chancery Division” carried on the work of the previous courts of equity. Roughly similar changes had already occurred in Newfoundland in 1824, British Columbia in 1849, New Brunswick in 1854, Nova Scotia in 1856, Manitoba in 1872 and Prince Edward Island in 1873. Ontario enacted similar changes in 1881, and courts of both law and equity were created in Saskatchewan and Alberta when they were established in 1905. Thus, all of Canada has come to have courts of equitable jurisdiction encompassing charity law, except Quebec, where the legal system does not have a separate branch of equity.

Abbott v. Fraser (UKPC) – Public libraries in Quebec 1874

LR 6 PC 96. A legacy to found a public library was valid under Quebec law.

Mortmain and Charitable Uses Act, 1888 (UK) 1888

UK 51 & 52 Victoria, c 42. This modernization Act (for the UK only) repealed all previous charity and mortmain laws, including the charitable uses statutes of 1601 and 1735, and re-enacted their provisions in modern form, including the 1601 preamble.

Special Commissioners v. Pemsel (UKHL) – “Four heads of charity” 1891

[1891] AC 531. This was about whether a Scottish missionary organization enjoyed exemption from UK income tax as a charity. It did, but the case is more important because one of the judges, Lord Macnaghten (in obiter), listed the “four heads of charity” as a convenient classification of charitable purposes: relief of poverty, advancement of education, advancement of religion, and the catch-all, other (charitable) purposes beneficial to the community. Note that the fourth head was only a category of already recognized charitable purposes. Subsequent courts explained that it did not mean all purposes beneficial to the community, but only certain purposes that courts have recognized as charitably beneficial to the community, yet not in the first three heads.

Mortmain and Charitable Uses Act, 1892 (Ontario) 1892

SO 55 Victoria, c 20. Since the courts had ruled that in Ontario, unlike in other colonies, the old UK mortmain statutes had been received and were in force, the Ontario Legislature found it advisable to enact most of the provisions of the 1888 UK mortmain modernization legislation. (More were enacted in 1902.)

Ross v. Ross (SCC) – Poverty relief 1894

25 SCR 307. A holograph will made by a Quebecker in New York leaving charitable trusts was mostly valid under Quebec law; at least the trust to relieve poverty.

In re Nottage; Jones v. Palmer (EWCA) – “Mere sport” not charitable 1895

[1895] 2 Ch 649. Mere sport, in the sense of an entertaining pastime (yacht racing in this case) was not, in and of itself, a charitable purpose—even if it can be shown to have beneficial economic, social or defence side-effects.

In re Macduff; Macduff v. Macduff (EWCA) – Philanthropic purposes not necessarily charitable 1896

[1896] 2 Ch 451. Philanthropy was held to have a broader legal meaning than charity; therefore purposes called philanthropic are too broad to be charitable at law.

Mortmain and Charitable Uses Act, 1902 (Ontario) 1902

SO 2 Edw. 7, c 2. As the British had done, this second Ontario mortmain Act re-enacted the text of the 1601 preamble (in slightly modernized form). Both the 1892 and 1902 Ontario Acts were combined into one new Act in 1909.

Mortmain and Charitable Uses Act (Ontario) 1909

SO 9 Edw. 7, c 58. In this revision of the Ontario mortmain legislation, the clause that set out the 1601 preamble was replaced with one (s 2(2)) that set out the four Pemsel heads instead. But it did not include wording to limit the fourth head to purposes recognized as charitable by the courts. Read literally, the new wording defined as charitable “any purpose beneficial to the community”. This was probably not intended, but judges in the subsequent Orr (1918), Laidlaw (1984) and A.Y.S.A. (2007) cases recognized that charity law in Ontario had been changed as a result.

Bonanza Creek Gold Mining Co. v. The King (UKPC) – Provincial jurisdiction 1916

[1916] AC 566. A province’s jurisdiction over corporations—presumably including charitable corporations—was limited to those operating entirely within its borders. (Arguably then, a charitable corporation operating in more than one province is not subject to the legislation of any one of the provinces, and therefore by default comes under federal jurisdiction.)

The Income War Tax Act, 1917 (Canada) – Charitable “institutions” 1917

SC 1917, c 28, s 5(d), effective from the 1917 tax year (s 24). In this, Canada’s first income tax Act, income earned by charitable “institutions” was exempt from income tax.

Bowman v. Secular Society (UKHL) – Political purposes 1917

[1917] AC 406. First statement of rule that political purposes (i.e. to change the law) cannot be charitable.

The Income War Tax Act, 1917 (Canada) – Wartime donation deduction 1917

SC 1917, c 28, s 3(1)(c), effective from the 1917 tax year (s 24). Taxpayers were allowed to deduct from their income for tax purposes payments to certain wartime charities: the Canadian Patriotic Fund, the Canadian Red Cross Fund and “other patriotic and war funds approved by the Minister”.

The War Charities Act, 1917 (Canada) – First charities registration system in Canada 1917

SC 1917, c 38. At the same time that the new income tax Act allowed a deduction for donations to wartime charities, this Act was passed to define them and set up a system for their approval, registration and regulation.

Re Orr; Cameron v. Church of Christ Scientist (SCC) – Religious purposes – Vague purposes 1918

57 SCR 298. Christian Science was accepted as a religion for charity law purposes. Some legacies in support of it were valid; but others were expressed too vaguely to be charitable.

Income tax changes (Canada) – Donation deduction repealed 1920

SC 1920, c 49, s 5. The donation deduction for wartime charities was repealed because WW1 had ended and with it the system of approving, registering and regulating wartime charities.

IRC v. Falkirk Temperance Café Trust (Scotland) – Related business 1926

1927 SC 261. A “dry” pub business to promote temperance is charitable.

IRC v. Glasgow Musical Festival Association (Scotland) – Promotion of music, charitable 1926

1927 SC 920. A music festival promoting music to the public was a valid charity even though it made profits by charging participants to perform and by selling concert tickets.

IRC v. Yorkshire Agricultural Society (EWCA) – Promoting industry, charitable 1927

[1928] 1 KB 611

Income tax changes (Canada) – Charitable donations deduction 1929

SC 1930, c 24, s 3, effective from the 1929 tax year (s 7). The reintroduced donations deduction allowed taxpayers to deduct up to 10% of their income for properly receipted donations to “any charitable organization in Canada”. (But charities’ exemption from paying tax continued to be only for charitable “institutions”, a smaller category.)

Keren Kayemeth Le Jisroel Ltd. v. IRC (EWCA, UKHL) – Promoting immigration not charitable 1932

[1931] 2 KB 465; [1932] AC 650. Legacy in trust to promote Jewish immigration to (what was then) Palestine was not a valid charity.

Income tax changes (Canada) – Rule against private profit 1934

SC 1935, c 40, s 4, effective from the 1934 tax year (s 16). In order for charitable institutions to continue to be exempt from income tax, no part of their income could profit or be paid or payable to any of their proprietors or shareholders.

Income tax changes (Canada) – Gift tax – Charitable donation exemption 1935

SC 1935, c 40, s 14, effective from the 1935 tax year (s 17). A gift tax, ranging from 2% to 10% of any gift over $4,000 (then a substantial sum) was introduced to deter wealthy individuals from making family gifts to reduce income taxes. The new tax did not apply to bequests or gifts made by will, or taking effect after death, nor to donations to any “charitable organization or educational institution”.

Income tax changes (Canada) – Increase in donation deduction for war-related charities 1939

SC 1939 (2nd Sess.), c 6, s 1, effective from the 1939 tax year (s 7). With the outbreak of WW2 this amendment was passed to increase from 10% of income to 50% the deduction for donations to “any patriotic organization or institution in Canada” approved by the Secretary of State.

The War Charities Act, 1939 (Canada) – Second charities registration system 1939

SC 1939 (2nd Sess.), c 10. At the same time that the increased deduction for donations to wartime charities was passed, another Act similar to that of 1917 was passed to define them and set up a system for their approval, registration and regulation by the Secretary of State, later the Minister of National War Services. There were several amendments (SC 1940-41, c 28; 1945 (2nd Sess.), c 36); the system was discontinued after the war (SC 1947, c 48); and this legislation was finally repealed as spent in 1953.

Re Birtwhistle; MNR v. Trusts and Guarantee Co. (UKPC) – Charitable purpose trust not a Canadian “charitable institution” 1939

[1940] AC 138. A trust to accumulate a fund for 21 years to eventually benefit a small town was a charitable purpose trust—but not a “charitable institution” under Canadian income tax law, so it did not enjoy the charity tax exemption and had to pay tax on its trust income.

The Dominion Succession duty Act (Canada) – Charitable donation exemption 1941

SC 1940-41, c 14, effective on successions arising from 29 April 1941 [s 7(1)(g)]. An inheritance tax, ranging from 1% to 27% of any inheritance (“succession”) over $5,000 (then a substantial sum) was introduced to help fund WW2. The new tax exempted 50% of the amount of an inheritance being paid to a “charitable organization in Canada operated exclusively as such” [s 7(1)(d)].

Income tax changes (Canada) – Corporate charitable donations limited to 5% of income 1941

SC 1940-41, c 18, s 7, effective from the 1941 tax year (s 32) and s 8, effective from the 1942 tax year. The maximum amount of income that could be claimed as deductible donations to war-related charities was reduced from 50% to 40%, if promised before 8 April 1941 and paid before 31 December 1941. Thereafter, the maximum amount for donations to any charitable institution remained at 10% of income for individuals but became only 5% of income for corporations.

National Anti-Vivisection Society v. IRC (UKHL) – Political purposes – Purposes entailing calamitous results 1947

[1948] AC 31. Political purposes (i.e. to change the law) are not charitable. Also, purposes that are otherwise charitable in principle but would in effect have results calamitous for the community cannot be charitable. Note that this case is often cited as the origin of the “net public benefit test”—the idea that in determining whether a purpose has public benefit a calculation has to be done that shows that the beneficial effects exceed any effects considered negative. But this was only what one of the five judges said (Lord Wright). The majority said no such thing and propounded no such test. They said simply that if a purpose entailed any seriously harmful consequence—“calamitous” in the sense of detrimental to human life—it could not be charitable.

Gilmour v. Coats (UKHL) – Private religion 1949

[1949] AC 426. A priory of cloistered nuns did not provide a public benefit in the sense meant by charity law and was not a charity.

Income tax changes (Canada) – Tax exemption, charitable “organizations” 1949

SC 1947-48, c 52, s 57(1)(e), effective from the 1949 tax year (s 131). In this revised income tax Act, the tax exemption for charities was enlarged from charitable “institutions” to any “organization operated exclusively for charitable purposes”.

Income tax changes (Canada) – Charitable organizations, corporations and trusts 1950

SC 1950 (1st session), c 40, s 21(1), (3), effective from the 1950 tax year (s 21(4)). These amendments redefined charitable entities for both the tax exemption and the donation deduction, splitting them into three sub-categories:

  • charitable organizations: all resources had to be “devoted to charitable activities carried on by itself”—i.e. no or only insignificant giving to or supporting other charities;
  • charitable corporations, who were allowed to give significantly to other charities;
  • charitable trusts, who were likewise allowed to give significantly to other charities.
Income tax changes (Canada) – No private profit 1950

SC 1950 (1st session), c 40. The rule that no part of income could profit or be paid or payable to any members, proprietors or shareholders applied to charitable organizations and corporations, it being understood that the same rule already existed in charity law for charitable trusts.

Income tax changes (Canada) – Charity business rules 1950

SC 1950 (1st session), c 40. Charitable corporations and trusts were not allowed to control another corporation, carry on any business, or incur any debts other than for operating expenses; and 90% of income had to be expended on gifts to charitable organizations or other charitable corporations or on charitable activities carried on by themselves (the forerunner to the disbursement quota).

Income tax changes (Canada) – Charitable gifts 1950

SC 1950 (1st session), c 40. The exemption from gift tax for gifts to charities was similarly amended to cover charitable organizations, corporations and trusts (s 36).

Les Dames religieuses de Notre Dame de Charité du Bon Pasteur v. The King and Assessors of Sunny Brae (SCC) – Unrelated business 1952

[1952] 2 SCR 76. Property used to run a laundry business was not being used by the nuns for charitable religious purposes, and so liable to property tax.

In re Cox; Baker v. National Trust Co. (UKPC) – Employee aid 1955

[1955] AC 627. Aiding employees and ex-employees was found charitable.This was probably the last Canadian charity case where an appeal was decided by the Judicial Committee of the Privy Council, in London. The Supreme Court of Canada took over as the final court of appeal.

In re Shaw, decd. Public Trustee v. Day (EWHC Ch Div.; EWCA) – Research into new alphabet 1957

[1957] 1 WLR 729. The lower court ruled that George Bernard Shaw’s “alphabet” trust (to research whether a new phonetic alphabet would be economically efficient) was not charitable.

[1958] 1 All ER 245n. However, the higher court approved a compromise settlement under which all of the contemplated research proceeded.

Income tax changes (Canada) – Optional standard deduction 1957

SC 1957, c 29, s 7(3), effective from the 1957 tax year (s 7(5)). As a measure to save accounting and administrative costs, in lieu of claiming the donation deduction (and several other deductions) using receipts, taxpayers could simply claim $100 as an “optional standard deduction” without receipts (but would claim the normal deductions, with receipts, if the total was more than $100).

Income tax changes (Canada) – Limit on corporate donations raised to 10% of income 1958

SC 1958, c 32, s 11(1), effective from the 1958 tax year (s 11(3)). The maximum amount for deductible donations by corporations to charities was raised from 5% of income to 10%, the same level as for individuals.

Worldwide Evangelization Crusade (Canada) v. Beamsville & Annable (S.C.C.) 1959

[1960] SCR 49. Property used by an evangelical charity to train missionaries was a “seminary” exempt from property tax.

Estate Tax Act (Canada) – Charitable donation exemption 1959

SC 1958, c 29, effective from the 1959 tax year. Replaced the Dominion Succession Duty Act. The new estate tax did not have to be paid on that part of an estate that was going to a “charitable organization operated exclusively as such” [s 7(1)(d)].

Re Brier; Jewish Home for the Aged of BC v. Toronto General Trusts Corporation (SCC) – Charitable perpetuities – Cy-près power 1961

[1961] SCR 465. A legacy in trust to benefit a charity at a future time which might not happen within the perpetuity period could be saved by varying the gift cy-près.

Touchet v. Blais (SCC) – Advancement of religion 1963

[1963] SCR 358. Legacy to a bishop to carry out his works was a valid charitable gift for advancement of religion.

Re Hopkins Will Trusts (EWHC Ch) – Historical research 1964

[1965] Ch 669. A legacy in trust to find Shakespearian manuscripts was a valid charitable purpose for research under either the second or fourth heads (education or benefit to the community)—despite the testatrix’s evident bias that this would prove that the real author of Shakespeare’s plays was Sir Francis Bacon.

In re Pinion, decd. Westminster Bank Ltd. v. Pinion (EWCA) – Museums – Promotion of the arts 1965

[1965] Ch 85. A legacy in trust to establish a museum to show the testator’s art collection was not charitable because the collection was, in the opinion of experts, “a worthless pile of junk” and unable to benefit the public.

Jewish National Fund v. Royal Trust Co. (SCC) – Land purchases for Israel not charitable 1965

[1965] SCR 784. Legacy in trust to support land purchases in Palestine for the State of Israel was governed by the law of the testator’s domicile (BC), under which that was not a valid charitable purpose.

Guaranty Trust Co. of Canada v. MNR (SCC) – Student assistance charitable – Ancillary activities 1966

[1967] SCR 133. Legacy in trust to financially assist medical students was a valid charitable purpose exempt from estate tax. Activities such as alumni conferences, publications and morale-boosting entertainments that do not directly achieve the charitable purpose but support it indirectly, are not considered to show any non-charitable purpose.

Scottish Burial Reform and Cremation Society Ltd. v. Glasgow (UKHL) – Cremation services 1967

[1968] AC 138. Cremation services are charitable not just under the third head (religion) but also under the fourth head as needful for public health and as a community amenity, whether or not a profit is made or there is competition with commercial enterprise.

Income tax changes (Canada) – Federal registration of all charities 1967

SC 1966-67, c 47, s 3(1), (3), s 15, effective from the 1967 tax year (s 3(4)). In response to Auditor General findings that millions in donations were not being properly accounted for by (mainly religious) charities, and that the resulting receipts were often gross exaggerations of the amounts actually given, these changes set up a system of registration of all charities. No taxpayer could claim the donation deduction without, not merely a receipt, but one identifying and bearing the registration number of the charity concerned; and all registered charities were obligated to keep sufficient accounts, including duplicates of the receipts it issued. The legislation did not (and still does not) explicitly grant the power to register; it was assumed the Minister already had that power administratively, and the new provisions simply referred to registered charities and the power to revoke registration as if the power to register existed. As a result of these changes, 31,373 charities were federally registered in the first year (1967).

Incorporated Council of Law Reporting for England & Wales v. A-G (EWCA) – Publishing law reports 1971

[1972] 1 Ch 73. Publishing law reports is charitable both as educational to the legal profession (second head) and promoting the law to the public (fourth head).

Stouffville v. Mennonite Home Association of York County (SCC) – Relief of the aged – Nursing home 1972

[1973] SCR 189. Non-profit nursing home was a valid charitable purpose even though it administered no means test.

Income tax changes (Canada) – Federal gift and estate taxes replaces by capital gains taxes 1972

SC 1970-71-72, c 63, effective from the 1972 taxation year. In this major income tax reform legislation, the gift tax and the Estate Tax Act were ended and the federal government left such taxes up to the provinces—on the grounds that these revenues were being replaced at the federal level by a new system of capital gains taxes imposed on death as part of the new tax regime.

Income tax changes (Canada) – Limit on donations raised to 20% of income 1972

SC 1970-71-72, c 63. The maximum amount for deductible donations by both individuals and corporations to any charity was raised from 10% of income to 20%.

Income tax changes (Canada) – RCAAAs 1972

SC 1970-71-72, c 63. In response to concerns about Canada’s mediocre Olympic results, a new category of quasi-charity was created, the registered Canadian amateur athletic association or “RCAAA”. Sports has been excluded from charity since the Nottage case in 1895; so, to answer the need here, these organizations, though not charities, would have the right to issue deductible donation receipts to its donors as if they were (provided they were national in scope).

Re Bethel; Jones v. T. Eaton Co. (SCC) – Helping needy or deserving employees and ex-employees 1973

[1973] SCR 635. Legacy in trust to help needy or deserving members of a club of Eaton’s employees and ex-employees was a valid charitable trust.

Income tax changes (Canada) – Charitable organizations, foundations 1977

SC 1976-77, c 4, s 60 [s 149.1] and other provisions, effective from the 1977 taxation year (s 60(2)). In these major changes to the federal income tax system affecting charities, they were reclassified into charitable organizations and charitable “foundations”.

Income tax changes (Canada) – Charitable organizations 1977

SC 1976-77, c 4. Charitable organizations could be corporations, trusts or unincorporated associations. As before, all resources had to be “devoted to charitable activities carried on by the organization itself”. This would have implied no or only insignificant giving to or supporting other charities, except that a contradictory provision was added allowing them to give up to 50% of income to other charities.

Income tax changes (Canada) – Charitable foundations, public and private 1977

SC 1976-77, c 4. Charitable foundations could only be corporations or trusts, not unincorporated associations. They were to be “constituted and operated exclusively for charitable purposes”, implying they did not need to carry out their own charitable activities but could give to or support other charities significantly. They were further subdivided into:

  • Public foundations: at least 50% of directors or trustees had to be at arm’s length, and no more than 75% of capital could come from one donor; and
  • Private foundations: the converse, either 50% or more of directors or trustees were not at arm’s length or 75% or more of capital came from one donor.
Income tax changes (Canada) – Related business 1977

SC 1976-77, c 4. The previous rule that charities could not carry on any business was replaced with one that allowed charitable organizations and public foundations to carry on only “related businesses”; but private foundations continued to be not allowed to carry on any business.

Income tax changes (Canada) – Disbursement quota 1977

SC 1976-77, c 4. All charities became required to fulfil an annual “disbursement quota”, meaning in essence that they had to expend on charitable activities (including gifts to other charities) at least 90% of donations received in the previous tax year, and, in the case of private foundations, at least 5% of assets. Disbursement quota calculation details changed markedly over subsequent decades.

Income tax changes (Canada) – Revocation tax 1977

SC 1976-77, c 4. A new provision allowed all assets of a charity whose registration is revoked to be taxed, unless given away to other charities within one year after the revocation. This draconian authority for the federal treasury to seize resources legally devoted to charity has supposedly never been used, as we are told that CRA bends over backward to find other appropriate charities to receive such assets before the seizure takes effect. A very strange “tax” indeed.

McGovern v. A-G (EWHC Ch Div.) – Political purposes – Anti-torture 1981

[1982] 1 Ch 321. Putting pressure on governments to stop torture and repeal the death penalty was seeking to change the law and therefore a political purpose, not charitable. This is the main case defining non-charitable political purposes as follows: “Trusts for political purposes . . . include, inter alia, trusts of which a direct and principal purpose is either (i) to further the interests of a particular political party; or (ii) to procure changes in the laws of this country; or (iii) to procure changes in the laws of a foreign country; or (iv) to procure a reversal of government policy or of particular decisions of governmental authorities in this country; or (v) to procure a reversal of government policy or of particular decisions of governmental authorities in a foreign country.”

Ontario mortmain laws finally removed 1982

An Act to amend the Charities Accounting Act, SO 1982, c 11, and An Act to repeal the Mortmain and Charitable Uses Act, c 12, brought Ontario charity law into line with the rest of the common-law world and abolished the law of mortmain. However, several provisions, including the Pemsel-based meaning of charitable purposes, were transferred to the Charities Accounting Act. That remains in force in today’s version of that Act, R.S.O. 1990, c C.10, s 7.

Re Laidlaw Foundation (Ontario) – Sports 1984
48 OR (2d) 549. Health-promoting sports could be a charitable purpose (in Ontario only, by virtue of peculiar Ontario legislation).
Income tax changes (Canada) – Optional standard deduction removed 1984

SC 1984, c 1, s 49(2) effective from the 1984 taxation year (s 49(7)). The “optional standard deduction” was repealed on the grounds that by not requiring receipts, it had created an actual disincentive to donate to charity.

Scarborough Legal Community Services v. The Queen (FCA) – Political purposes 1985

[1985] 2 FC 555. A legal aid clinic had engaged more than once in rallies to protest against a certain proposal by the provincial government to bring changes to a benefit program; and had also participated in a committee to improve certain by-laws. Two of three FCA judges decided that notwithstanding the clinic’s claims that these had been minor and incidental political activities, they were “sustained efforts to influence the policy-making process” which precluded the clinic from being registered as a charity. This decision was controversial.

Income tax changes (Canada) – Limited political activities allowed 1985

SC 1986, c 6, s 85(2) [s 149.1(6.1), (6.2)], effective from the 1985 taxation year (s 85(3)). The controversial Scarborough decision led to these amendments which sought to give charities greater leeway to using “political activities” to help achieve charitable purposes, but without opening the door to charities becoming partisan political actors. (Unfortunately, the wording used was vague and convoluted; political activities were not even defined; and an Ontario court found in a 2018 case that the parts which attempted to limit non-partisan political activities were unconstitutional.)

Native Communications Society of BC v. MNR (FCA) – Promotion of First Nations culture 1986

[1986] 3 FC 471. Publishing a newspaper for the benefit of a First Nation and its culture was charitable because of the special legal status that aboriginal peoples have in Canada.

Alberta Institute on Mental Retardation v. The Queen (FCA) – Collecting donated goods not a business 1987

[1987] 3 FC 286. An arrangement to raise money (for another parent charity that assisted mentally challenged people and their families) by collecting clothing and other goods donated by the public and selling these to a (for private profit) thrift store, was simply a means to convert donated goods into money, not a business. Such manner of fundraising did not disentitle the Institute to charity status. (Note that the court also said (in obiter) that even if, contrary to its finding, the fundraising arrangement were a business, it would be a “related business” allowed under the Income Tax Act, since the funds raised were to be used for charitable purposes. But this interpretation, which is the so-called “destination of funds test” of relatedness, has since been rejected by other courts.)

Positive Action Against Pornography v. MNR (FCA) – Seeking to strengthen legislation 1988

[1988] 2 FC 340. An organization seeking to strengthen anti-obscenity laws was political, not charitable.

Toronto Volgograd Committee v. MNR (FCA) – Inter-city exchanges to promote peace 1988

[1988] 3 FC 251. An organization seeking to exchange visits between a Canadian and a Russian city to promote peace was political, not charitable.

Income tax changes (Canada) – Donation deduction replaced by tax credit 1988

SC 1988, c 55, s 92(1), effective from the 1988 taxation year (s 92(2)). The income deduction for charitable donations by individuals (not corporations) was replaced by a two-tier tax credit—a deduction from tax instead of income—equal to the lowest tax rate (then 17%) on the first $250 of donations plus the highest tax rate (then 29%) on donations above $250. (Corporate donations to charity remain a deduction from income.)

Income tax changes (Canada) – RNASOs 1990

SC 1991, c 49, s 123(4), (9); re-enacted SC 1994, c 7, Sch II, s 123(4), effective from 13 July 1990 (s 123(9)). The promotion of art is a charitable purpose, but providing benefits to artists is not, and various arts organizations were therefore denied charity registration. To fix this, another category of quasi-charity, similar to the RCAAA of 1972, was created: the registered national arts service organization or “RNASO”. Though not charities, they would have tax rights as if they were (provided they were national in scope).

Everywoman’s Health Centre Society (1988) v. The Queen (FCA) – Health clinic providing access to abortion 1991

[1992] 2 FC 52. Provision of abortions was charitable as a health service, even though controversial. The court also said that the provision of abortions could not be contrary to public policy because the Supreme Court of Canada had struck down the anti-abortion laws as unconstitutional, and there was therefore an absence of public policy on the issue.

Corporation Notre-Dame de Bon-Secours c. Communauté urbaine de Québec (SCC) – Seniors’ housing 1994

[1994] 3 SCR 3. Seniors’ housing facility was a charity qualifying for property tax exemption.

Income tax changes (Canada) – Donation tax credit increased 1994

SC 1994-95, c 3, s 34(1), effective from the 1994 taxation year (s 34(2)). The first tier of the donation tax credit for individuals, on which the lowest tax rate (then 17%), applied, was changed from the first $250 of donations to the first $200—thus giving donors of $200 to $250 the higher rate of tax credit (29%)—worth a whopping $6 at most.

Briarpatch Inc. v. The Queen (FCA) – Newspapers not charitable 1996

[1996] 2 CTC 94. Publishing a newspaper containing matters of general interest, even if it was intended to serve the poor in a community, was not charitable.

Vancouver Regional FreeNet Association v. MNR (FCA) – Community internet service 1996

[1996] 3 FCR 880. A community internet service was charitable, as being a means of communication analogous to highways recognized as charitable in the preamble of the 1601 statute of charitable uses.

Income tax changes (Canada) – Limit on donations raised to 50% of income 1996

SC 1997, c 25, s 22(1), s 26(1), effective from the 1996 taxation year (s 22(2), 26(2)). The maximum amount for tax-creditable or deductible donations by individuals and corporations to charity was raised from 20% of income to 50%.

Income tax changes (Canada) – Limit on donations raised to 75% of income 1997

SC 1998, c 19, s 20(1), s 22(4), effective from the 1997 taxation year (s 20(3), 22(8)). The maximum amount for tax-creditable or deductible donations by individuals and corporations to charity was raised from 50% of income to 75%.

Human Life International in Canada Inc. v. MMR (FCA) – Anti-abortion organization claiming to educate on public health 1998

[1998] 3 FC 202. An organization educating the public on health in ways that took a stance against abortion was conducting an anti-abortion campaign in reality, which was political and not charitable.

Action des femmes handicapées (Montréal) v. MNR (FCA) – Public campaigning 1998

1998 CanLII 8059. An organization campaigning for the public to be aware of and help the disabled was not charitable because any benefits to the disabled would be too indirect: They would be actually provided by others from amongst the public, not by the organization itself.

Alliance for Life v. MNR (FCA) – Anti-abortion organization claiming to advance education 1999

[1999] 3 FC 504. Advocating strongly held opinions on important social and moral issues in a one-sided manner to the virtual exclusion of any equally strong opposing opinions, was not advancement of education under charity law.

Vancouver Society of Immigrant and Visible Minority Women v. MNR (SCC) – Major review of Canadian charity law 1999

[1999] 1 SCR 10. Amongst many other things, the court concluded that programs to find employment for immigrant and minority women are not charitable; but non-traditional forms of education can be.

Canadian Magen David Adom for Israel v. MNR (FCA) – Foreign aid in unapproved places 2002

2002 FCA 323. Foreign aid provided by a Canadian charity in a place disallowed by the Canadian government’s foreign policy, was not contrary to public policy within the meaning of the law (but the organization was still not charitable since it was a mere financial conduit).

Action by Christians for the Abolition of Torture (ACAT) v. The Queen (FCA) – Political purposes – Anti-torture 2002

2002 FCA 499. Putting pressure on governments to stop torture and repeal the death penalty was seeking to change the law and therefore a political purpose, not charitable.

(In 2009 ACAT was reinstated as a registered charity after it had revised its objects to clearly show that its purpose was to uphold human rights law as supported by religious doctrine.)

Canadian Committee for the Tel Aviv Foundation v. The Queen (FCA) – Control over resources used abroad 2002

2002 FCA 72. A foreign aid charity may not be a mere financial conduit to another foreign organization. It must exercise a sufficient degree of control over use of its resources by its agents.

Reference re Earth Future Lottery (PESCAS; SCC) – Criminal law – Provincial lotteries 2003

215 DLR (4th) 656; [2003] 1 SCR 123. The Criminal Code’s permission for provinces to operate lotteries applies within the province only and does not allow a province to authorize an (ostensibly charitable) organization to run an on-line lottery involving participants outside the province.

Slobodrian v. MNR (FCA) – Voluntary services are not gifts of property, so not donations 2003

A series of many decisions were rendered in this case, the key being 2003 FCA 350. As a rule, services are not recognized as property in law, and therefore scientific services voluntarily provided to a charity without remuneration could not be considered as a gift of property so as to allow a donation tax credit to be claimed. (Note that this rule can be gotten around, more or less, by arranging for the charity to pay the service-provider a wage that he or she donates back. The amount then qualifies as a donation because it takes the form of money, which is property in law; but it also is income to the service-provider on which income tax, CPP and EI are due; but usually these taxes would be outweighed by the donation tax credit, so that the donor still has a (tiny) incentive to donate his services.)

Technical Tax Amendments Act, 2012 (Canada) – Donations “split-receipting” 2003

SC 2013, c 34, s 358(30), effective from the 2003 taxation year (s 358(53))—yes, these changes took effect retroactively, almost a decade before they were finally enacted!

The civil law of Quebec allowed for net gifts. That is, if the donor of a gift received something of less value in return, there was still a valid gift and its value was the value of the primary gift minus the value of what was received. But in common law provinces in the rest of Canada, some of the jurisprudence did not accept such a situation as a valid gift in law. Receiving something back in return could be consideration and might turn the exchange into a kind of contract that was not an act of voluntary generosity. This made the income tax legislation as regards donations non-uniform across Canada.

To correct this, these amendments adopted Quebec’s rule for the purposes of the federal income tax system in all of Canada—even though gifts are a matter of provincial legislative jurisdiction under Canada’s constitution. The calculation of the net amount of a gift (the “eligible amount”) for federal tax purposes under these provisions is commonly known as “split-receipting”.

Fuaran Foundation v. CCRA (FCA) – Unstructured religious activities not charitable 2004

2004 FCA 181. It was not a charitable advancement of religion to provide a place of retreat without religious structure where visitors could, in effect, choose to do whatever they liked.

Charities Act 2006, (UK – England) – Reform of English charity law 2006

UK 2006 c 50. This Act was a major reform of charities regulation in England and Wales. It replaced the “four heads of charity” propounded in the 1891 Pemsel case with thirteen categories of charitable purposes, and it purported to remove any presumption of public benefit. Similar reforms were passed in Scotland, Northern Ireland, Ireland and Australia, but no such legislation has been passed in Canada or any of its provinces. The law of charities in Canada (except in Quebec) remains, for the most part, the unamended common law inherited from England, as adopted for tax purposes by the Canadian Income Tax Act (and in turn, Quebec’s Taxation Act).

AYSA Amateur Youth Soccer Association v. CRA (SCC) – Local sports association – Provincial charity law 2007

[2007] 3 SCR 217. A sports association did not, despite its claimed health benefits, have a charitable purpose under the common law as applied for federal income tax purposes. The fact that it might be charitable under Ontario legislation did not apply at the federal level.

Redeemer Foundation v. MNR (SCC) – Auditors’ information-gathering powers 2008

[2008] 2 SCR 643. CRA’s auditors wanted to determine whether donations from students’ parents were being allocated to their children and were therefore actually tuition fees in disguise, not genuine donations. The Income Tax Act’s provisions empowering auditors to obtain information were not a model of clarity, but in the end the court ruled that an income tax audit of a charity may require disclosure of not yet identified donors and beneficiaries without a court order.

Hostelling International Canada—Ontario East Region v. MNR (FCA) – Hotels not educationally charitable 2008

2008 FCA 396. Providing hostels for travelling young people lacked the necessary educational structure to be a form of advancement of education under charity law.

House of Holy God v. AG Canada (FCA) – Unrelated business (religious motive) 2009

2009 FCA 148. A business of producing and selling maple syrup was not a charitable advancement of religion, notwithstanding a claimed religious motivation for doing so.

Ballard & Coleman v. The Queen (FCA) – Donations really education fees 2011

2011 FCA 82, a follow-on to the 2008 Redeemer case. A system of donations made by parents which would result in bursaries being granted to their children that would cover most of the costs of their education at a religious school, was ruled to be actually a disguised form of tuition fee, not a proper gift, and so ineligible for the income tax credit for donations.

News to You Canada v. MNR (FCA) – Publishing news not charitable 2011

2011 FCA 192. Production and dissemination of in-depth news and public affairs programs was not a charitable purpose.

Human Dignity Trust v. Charity Commission (England) – Litigation to improve human rights in foreign countries 2014

[2014] UKFTT 2013-0013, [2015] WTLR 789. The UK First-Tier Tribunal (Charity) ruled that far from being a non-charitable political purpose, engaging in litigation before the constitutional courts of foreign countries or before international human rights tribunals in order to improve human rights, especially the human rights of same-sex people, was upholding the law, a valid charitable purpose.

Humanics Institute v. MNR (FCA) – Proposed sculpture park not advancing religion 2014

2014 FCA 265. A plan to create a sculpture park where visitors could contemplate the “Oneness of Reality” without otherwise specifying what religion or religions were in view, was not advancing religion in the charitable sense.

Public Television Association of Quebec v. MNR (FCA) – Foreign activities not controlled by Canadian charity 2015

2015 FCA 170. A Canadian charity whose purpose was educational broadcasting in Quebec did not make any broadcasts of its own. Instead it had a funding arrangement with an American broadcasting charity whose coverage reached Quebec, whereby the Canadian charity purported to make the American charity its agent. Its programs reaching Quebec were deemed to be broadcast on behalf of, and paid for by, the Canadian charity. The donations given to the American charity from Canadians were notionally assigned to the Canadian charity but kept by the American charity in payment for its Canadian broadcasts; and such donors were provided Canadian donation receipts as if they had given their donations to the Canadian charity.

Held, the broadcasts were not the charity’s own activities nor the activities of a genuine agent over which it exercised control, and it was in reality a financial conduit for Canadian tax-creditable donations to be given to an American charity—not allowed by Canada’s Income Tax Act.

Canadian Association for Free Expression v. Streed (NBCA) – Purposes contrary to public policy 2015

2015 NBCA 50. A testator (McCorkill) left his estate to the National Alliance, an American organization engaging in racist propaganda and having connections with individuals convicted of violent crimes. The New Brunswick Court of Appeal affirmed a lower court decision that such a bequest was contrary to public policy and could not be allowed.

Income tax changes (Canada) – Changes to individual donation tax credit 2016

SC 2016, c 7, s 62(3); c 11, s 2(1), (2), effective from taxation year 2016 (c 7, s 62(1), (16); c 11, s 2(3)). The introduction of a new maximum federal tax rate of 33% for high-income taxpayers also resulted in a more complicated three-tier calculation of the tax credit for individuals: the lowest tax rate (15%) on the first $200 of donations, plus either the second-highest tax rate (29%) on donations above $200, or the highest tax rate (33%) on the lesser of donations above $200 or income above the threshold for the highest tax rate.

Canada Without Poverty v. AG Canada (ONSC) – Political activity limits unconstitutional 2018

2018 ONSC 4147. An anti-poverty advocacy charity was told by CRA that most of its activities were political in nature. Based on CRA’s interpretation of the 1985 legislation to allow, yet limit, political activities, this exceeded the 10% limit set by that interpretation and CRA therefore intended to revoke its charity registration. The charity sought a Charter remedy in an Ontario court.

The court ruled that CRA’s interpretation was illogical; no sensible distinction can be drawn between legitimate charitable activities and political activities. Attempting to limit the political also limited the charitable. This violated the right to freedom of expression under the Charter; and the federal government had not offered any valid policy reason that would justify limiting a charity’s right to political expression in this way. The court ordered CRA to cease interpreting the 1985 legislation the way it had been but instead apply it on the basis that charitable activities include political activities without quantum limitation in furtherance of charitable purposes; and the court declared that those parts of the 1985 legislation that sought to limit non-partisan political activities by charities have no force and effect under Canada’s constitution.