Also known as: relieving poverty · poverty relief · charitable relief · poor relief
Written by attorneys — see sources below.
A charitable purpose consisting of providing assistance to individuals experiencing financial hardship.
Roberto Reyes transferred farmland and cash into a trust directing the trustee to make low-interest loans to local family farms struggling with debt. The trustee began distributing funds only to farms owned by Reyes family members. A neighboring commercial operator objected that the distributions served private interests rather than the relief of poverty for an indefinite class.
Rebecca Ross left property in trust to aid worthy persons in her hometown who had fallen on hard times. The will contained no restriction to those in actual poverty and allowed distributions based on general merit. The court held the trust invalid because the purpose was merely benevolent rather than directed to the relief of poverty.
Charles B. Henry, a resident of Winchester, Virginia, died testate on April 23, 1949. His will dated April 21, 1949, was admitted to probate and the Shenandoah Valley National Bank of Winchester qualified as the designated executor and trustee. Subject to two inconsequential provisions, Henry's entire estate valued at $86,000 was left in trust to be known as the Charles B. Henry and Fannie Belle Henry Fund. The trustee was directed to invest and reinvest the estate, collect the income, and on the last school day before Easter and before Christmas each year divide the net income into equal parts and pay one part to each child then enrolled in the first, second, and third grades of the John Kerr School in Winchester, with the payments to be used by each child in the furtherance of his or her education. The John Kerr School is a public primary school with an enrollment of approximately 458 pupils. If the school were discontinued, payments would be made instead to children in the same grades of any successor school or schools as determined by the Winchester School Board. The trustee was granted broad power and discretion to retain, sell, invest, and reinvest estate assets as it deemed in the best interest of the trust. Henry left no children or near relatives. His heirs and distributees upon intestacy were first cousins and more remote kin. One next of kin filed suit against the executor and trustee challenging the trust provisions. The bill alleged that the trust did not constitute a charitable trust and was invalid because it violated the rule against perpetuities. Other heirs joined the suit and sought to have the trust declared void with the estate distributed among the next of kin. The cause was heard on the bill and a demurrer filed by the executor and trustee. The demurrer was overruled and decrees were entered adjudicating the principles of the cause. From those decrees this appeal was awarded.
View caseRalph Richardson created a trust to maintain a city park for public recreation. The instrument limited access to a favored racial group. A court challenge asserted that the restriction prevented the trust from qualifying as one for the relief of poverty or other community benefit because it excluded an indefinite portion of the public.
In 1911 United States Senator Augustus O. Bacon executed a will that devised to the Mayor and Council of the City of Macon, Georgia, a tract of land. After the death of the Senator's wife and daughters, the land was to be used as a park and pleasure ground for white people only. Control was vested in a Board of Managers of seven white persons. The city kept the park segregated for some years. In time the city let Negroes use it. The city took the position that the park was a public facility which it could not constitutionally manage and maintain on a segregated basis. Thereupon individual members of the Board of Managers brought suit in a Georgia state court against the City of Macon and the trustees of certain residuary beneficiaries of the estate. They asked that the city be removed as trustee and that the court appoint new trustees to whom title to the park would be transferred. The city answered that it could not legally enforce racial segregation in the park. The other defendants admitted the allegation and requested the city's removal. Several Negro citizens of Macon intervened. They alleged that the racial limitation was contrary to federal law and public policy. They asked that the court refuse to appoint private trustees. The city resigned as trustee and amended its answer accordingly. Other heirs of Senator Bacon intervened seeking reversion of the trust property to the estate if the petition were denied. The Georgia trial court accepted the city's resignation and appointed three individuals as new trustees. On appeal by the Negro intervenors the Supreme Court of Georgia affirmed. The United States Supreme Court granted a writ of certiorari.
View caseThe trust must direct benefits toward persons experiencing financial hardship rather than conferring private economic advantages on selected individuals. Distributions limited to family members or repeat clients of a single business fail this test because they do not serve an indefinite class in need.
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A benevolent purpose expresses general generosity without requiring that recipients be poor. A purpose for the relief of poverty requires that the beneficiaries be selected because they lack financial resources, and failure to impose that limit renders the trust noncharitable.
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Yes. The purpose remains charitable even when some benefits reach persons who are not poor, provided the dominant intent is to assist those in financial need and the class of beneficiaries is indefinite.
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No. When eligibility is limited to repeat patients of one private clinic and the services are elective rather than essential, the arrangement primarily advances private interests and does not constitute relief of poverty for an indefinite class.
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