What is a Charity?

To be a charity, an organisation must have purposes which are charitable. Voluntary organisations are not necessarily all eligible to register as charities, and organisations with paid staff may be eligible to register.

Charitable purposes are usually defined under 4 headings:

• Relief of poverty (now defined more broadly as relief of financial hardship);
• Advancement of education;
• Advancement of religion;
• Certain other purposes beneficial to the community.

However for registration purposes it should be noted that the final decision regarding charitable status on the Isle of Man lies with the General Registry.

Requirement to Register as a Charity

The Charities Registration Act 1989 states that any institution which in the Island, or any Manx institution which in the Island or elsewhere “takes or uses any name, style, title or description implying or otherwise pretends, that it is a charity; or holds itself out as a charity” must be registered as a charity. If you are not sure whether your organisation should be registered as a charity, please contact the General Registry to discuss. (Telephone No. 685979).

Connection with the Isle of Man

All charities registered in the Isle of Man must have a “substantial and genuine connection with the Island”. Examples of a substantial and genuine connection with the Island are:

• Raising funds on the Island to provide charitable services for people or animals resident on the Island;
• Raising funds on the Island, by an Island-based committee, to send elsewhere where needed, eg help to third world countries;
• Raising funds on the Island, by an Island-based committee, to send to a parent charity in another country, usually England. The parent charities can include medical research and aid charities, and charities raising funds for the relief of poverty and for other charitable purposes;
• An Island-based committee receiving funds from outside the Island, for example from charitable trusts or foundations which have been specifically set up to use these funds for charitable purposes on the Isle of Man.

The final decision regarding whether an institution applying for registration has a substantial and genuine connection with the Island lies with the General Registry.

Purposes which are not considered to be charitable

• Where they are for the benefit of one named person or a group of specified individuals.
• Where the beneficiaries have a personal relationship, eg a family trust.
• Where the beneficiaries have a contractual relationship, eg employees or members of a professional institute - except where there is financial hardship, when beneficiaries can come from a more restricted group, eg: an employer can set up a charitable trust to help former employees in times of need, or a professional institute can set up a benevolent fund.
• Purposes which are illegal or could assist or aid illegal purposes.
• Political or propagandist activities.
• Any purpose which is against the public interest.

Charitable Purposes

Relief of Financial Hardship

To be classed as charitable, financial assistance may only be given to people in genuine financial need. Financial need may arise for a variety of reasons, which include old age, illness, disability, unemployment, accident, family problems. The need may be long-term and ongoing, or temporary.

In this category, it is permissible for a charity to restrict benefits to a smaller group of beneficiaries, for example, to help ex-employees of one employer.

Benefits may include financial help, food, clothing, assistance with or provision of housing, advice, or help to other organisations providing help directly to people suffering financial hardship.

The Advancement of Education

Education is a charitable purpose, whatever the financial status of the beneficiaries, and whether fees are or are not charged. Thus, schools, colleges and universities may be charitable as long as they are not run for profit.

Other educational purposes include:

• Provision of playgroup facilities.
• Provision of facilities for physical education, ie sports facilities. (Though note that the promotion of sport itself is not a charitable purpose.)
• Provision of facilities for recreational education, including hobbies, though to be charitable, they must have educational value.
• The arts, eg museums, art galleries, concert halls, libraries, arts festivals. There must be public educational benefit, recognisable standards of artistic merit, and they must not be run for profit.
• Conservation, where education is a significant part of the organisation’s activities - this can include zoos and other animal charities, eg rare breed societies; preservation of endangered species of animals and plants; industrial museums; steam railways; collections of various artefacts eg toys, musical instruments, vintage farm machinery etc. To qualify as an educational charity, there must be educational benefits to the public.
• Research, as long as there is public benefit.

The Advancement of Religion

1. The religion must be founded in a belief in a supreme being or beings. However, Buddhism is also regarded as a religion, even though there is no belief in a supreme being.
2. The belief must be expressed through worship of the supreme being or beings.
3. There must be a benefit to the public. Thus, enclosed orders may not be registered as charities, unless their activities include practical benefits to the community, for example, where members are involved in good works and/or advancement of religion in the community; parts of the building in which they live are open to the public for religious and other charitable purposes.
4. It must not undermine accepted bases of religion and morality, and must not be in any other way against the public interest. Thus, for example, organisations involved in Satanism or black magic could not obtain charitable status.

Other Purposes Beneficial to the Community This is a very wide heading, and covers many different activities, as long as they can be shown to provide a public benefit.

Examples of charitable purposes under this heading include:

• Provision of recreational facilities which are open to everyone;
• Provision of recreational facilities for particular groups, such people with disabilities, elderly, etc;
• Protection of heritage, where the public has reasonable access to the property;
• Protection of the environment, including prevention of pollution, promotion of better methods of dealing with waste;
• Animal charities, eg organisations aiding animals, providing homes for stray animals, promoting better standards of care towards animals etc. (But note that anti-vivisection groups cannot be charitable because achieving their objects could result in disbenefits to human beings.);
• Mental and moral improvement of the public;
• Promotion of racial harmony;
• Promotion of industry, commerce, agriculture and art, as long as the purposes are for the general benefit of the public, not for the benefit of individuals;
• Improvement of standards of craftsmanship and design;
• Relief of problems brought about by old age, sickness, disability, where there is no financial need;
• Resettlement and rehabilitation of offenders and drug abusers;
• Help for disaster victims, where help is given on the basis of proven need.