Philanthropy

Philanthropy is a topic of increasing importance for many people. In strict terms, philanthropy focuses on the wellbeing of human kind, although the term tends to be given a wider meaning, encompassing a broad range of giving initiatives. Some of those initiatives will be characterised as charitable in the relevant jurisdiction, others - albeit altruistic and benevolent in nature - may not.

Jersey can be an attractive jurisdiction in which to establish philanthropic structures for a variety of reasons. Chief among these will be that the Island offers stability (politically, economically and geographically), a robust regulatory regime, a well-respected judicial system, a depth and breadth of experience amongst its professional advisers, and a body of legislation which places a strong emphasis on the importance of flexibility, allowing for the creation of structures designed to meet an individual client's requirements.

This article uses the term philanthropy to include all giving initiatives, whether intended to promote human wellbeing or not and whether charitable or not, and gives an overview of the two principal structures used in Jersey for philanthropy: the trust and the foundation.

TRUSTS

The Trusts (Jersey) Law 1984 as amended (the "Trusts Law") allows for the creation of both charitable and non-charitable purpose trusts.

Charitable trusts

Whilst the Trusts Law allows for the creation of charitable trusts, it does not define "charity". The position is therefore covered by case law and the leading case on the topic establishes the following:

(1) There must be a clear intention on the part of the settlor to devote the whole of the property to charitable purposes.

(2) The purpose must be enforceable by the court.

(3) The purpose should be within the express terms or the "spirit and intendment" of the preamble to the English Charitable Uses Act 1601 (also known as the Statute of Elizabeth). Four principal categories have been derived from this:

(a) the relief of poverty;

(b) the advancement of education;

(c) the advancement of religion; and

(d) other purposes beneficial to the community.

(4) The purpose must be for the public benefit.

(5) The trust must be exclusively charitable.

Non-charitable purpose trusts

Non-charitable purpose trusts are expressly provided for by the Trusts Law and can be used in circumstances where particular purposes, whilst philanthropic, may nevertheless not be capable of being categorised as strictly charitable. Examples, here, would be trusts for humanitarian, ecological or research purposes.

Key Points

With a trust established under Jersey law, the following are key points to note:

(1) Duration:The trust can be established for an...