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LEGAL DEFINITIONS A "charity" is a trust, company or unincorporated association established for charitable purposes only. (Trusts or bodies established partly for charitable purposes are sometimes considered as, or treated as, charities: this is a matter of definition.) In law the concept of "charitable" purpose has a technical meaning which is not quite the same as the way that the word is used in normal language. In common law jurisdictions the concept derives loosely from the meandering list of charitable purposes in the Charitable Uses Act (also know as the Statute of Elizabeth) 1601, interpreted and expanded in a considerable body of case law. In Commissioners for Special Purposes of Income Tax v Pemsel (1891) Lord McNaughten identified four heads of charity: (1) relief of Poverty , (2) the advancement of Education , (3) the advancement of Religion , and (4) other purposes considered beneficial to the community. For a purpose to fall into the fourth category the courts will usually refer to the preamble of the Charitable Uses Act 1601, and decide by analogy to the purposes listed there. An example of this is the case of Vancouver Regional Freenet Association v Minister of National Revenue (1996), where free internet access was likened by analogy to the repair of highways found in the preamble to the Charitable Uses Act 1601. In many common law jurisdictions the common law definition has been replaced by a statutory definition, but without greatly changing the underlying concept. Charities are Non-profit Organisation s. Charities are sometimes referred to as Foundations GENERAL In many countries the charity sector is fast growing. Charities often take over services that used to be provided by the state, such as health, old age and unemployment, as the state finds it increasingly difficult to fulfill its traditional social responsibility. SUPERVISION Charities are normally subject to some form of supervision by the government. Most countries require registration of charities, and the charity is then required to report its activities (especially financial ones) to the government, usually on an annual basis. Supervision can reduce the possibilities of Charity Fraud and may be thought particularly justified where charities receive Tax Exemption s. However supervision may also allow the government to influence the scope and agenda of charities (e.g. RSPCA Told to Put Human Needs Before Animal Pain ). In the United States, because of the principle of Separation Of Church And State , Churches and other religious organisations are often exempt from this legal requirement, although they are often overseen by a church hierarchy. CHARITIES IN DIFFERENT COUNTRIES Australia In Australia , non-profit organisations and charities are registered with the Australian Taxation Office as deductible gift recipients (DGR). Canada Canada has over 75,000 registered charities, of which more than 40% are places or worship such as Churches and Mosque s. Other registered charities include institutions such as universities and libraries. About 23% of registered charities exist to help the disadvantaged. Annual giving in Canada is over $90 billion CDN , if one puts a dollar figure on volunteer time. The most charitable province is Newfoundland , which has the highest rate of individual donations per capita. Canadians give, on average, $239 dollars per year to charity. About one third of Canadians volunteer annually and 5% of Corporations make donations. In Canada , approximately two-thirds of the funding for charitable foundations comes from the government. The level of government funding has recently caused controversy as cutbacks have led to problems with such programmes as Food Bank s. Another controversy is the denial of charitable status to environmental and political groups. There have also been calls for greater regulation of the charitable sector. Recent years have seen a new breed of charities that pour most of their donations into marketing. These groups grow quickly and attract many donors but a far smaller fraction of each donation goes to help the needy.
United Kingdom There were over 200,000 registered charities in the UK at the start of 2005 .
United States In the United States Of America , the Attorney General of each state maintains a registry of charitable organizations. According to a report of Center On Philanthropy at Indiana University published by the Giving USA Foundation , as of 2005, there are 1,010,395 charities in the USA. TAX TREATMENT OF CHARITIES AND GIFTS TO CHARITY In common law jurisdictions, charities generally enjoy tax exemption for their income, and donors generally enjoy tax reliefs for gifts to charity. Details vary of course from country to country. In the United States, there are complex tax law differences between private and public charities. Donations to charities in the United States are deductible for Income Tax purposes if the organization has exempt status from the Internal Revenue Service , usually under Non-profit Organization sec. 501(c)(3) of the tax code. Any organization meeting the rules of that section can be classified a Charity in the US, including trusts, foundations, and corporations. US s that operate similarly to individual CRTs except that they receive contributions from multiple donors. This allows each donor similar benefits as an individual CRT without the expense of creating the trust themselves. The Charitable Lead Trust is essentially the reverse of a Charitable Remainder Trust ([http://www.michiganestateplan.com/CM/ResourceLinks/Glossary.asp ). In this form, the lifetime payments go to the charity and the remainder returns to the donor or to the donor's estate or other beneficiaries. Thus the two types of CLTs are CLUTs and CLATs, which are analogous to CRUTs and CRATs. Similarly named and often confused with CRUTs and CRATs are Grantor Retained Unitrusts (GRUT) and Grantor Retained Annuity Trusts (GRAT) ( {Link without Title} ). The difference is that GRUTs and GRATs do not involve charitable beneficiaries and therefore are not given the charitable deduction. LIST OF CHARITIES ''See: List Of Charities '' SEE ALSO
EXTERNAL LINKS Charity regulating bodies
News, information and services in the charity sector
International United Kingdom
Evaluations of charities United States Starting a charity |
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