TRUST
Trust, in the context of charity, refers to a legal entity
established to hold and manage assets for the benefit of a specific charitable
purpose or group of beneficiaries. Charitable trusts are created by individuals
or organizations with the intention of advancing philanthropic causes,
supporting charitable organizations, or providing assistance to those in need.
Key elements and features of a charitable trust include:
Settlor or Grantor: The settlor, also known as the grantor or
donor, is the individual or organization that establishes the charitable trust.
The settlor transfers assets, such as money, property, or securities, into the
trust for charitable purposes.
Trustees: The trustees are responsible for managing and
administering the trust according to the settlor's instructions and the trust's
governing document. Trustees have a fiduciary duty to act in the best interests
of the charitable purpose and beneficiaries.
Charitable Purpose: A charitable trust must have a clear and
specific charitable purpose. This purpose can include the relief of poverty,
the advancement of education, the promotion of health, the support of religious
institutions, the advancement of science or research, and other philanthropic
objectives.
Beneficiaries: Charitable trusts do not have individual
beneficiaries like private trusts. Instead, they are established to benefit a
specific charitable cause or organization, or they may be set up as a
non-distributive trust for ongoing charitable purposes.
Tax Benefits: In many jurisdictions, contributions to charitable
trusts are eligible for tax deductions or exemptions. These tax benefits serve
as an incentive for individuals and organizations to donate to charitable
causes.
Perpetuity: Charitable trusts are often designed to operate in
perpetuity or for a specific duration. This allows the trust's assets to
continue benefiting the chosen charitable cause for the long term.
Public Benefit: Charitable trusts are required to serve a public
benefit rather than private interests. The trust's activities and resources
should be directed towards achieving the charitable purpose.
Trust Deed: The governing document of a charitable trust is
known as the trust deed. The trust deed outlines the charitable purpose,
identifies the beneficiaries or charitable organizations to benefit, and
specifies the duties and powers of the trustees.
Regulation and Oversight: Charitable trusts are subject to the laws and regulations of the jurisdiction in which they are established. In many countries, there are regulatory bodies that oversee charitable organizations and ensure compliance with relevant laws.
Charitable trusts play a vital role in promoting philanthropy
and supporting various social, humanitarian, educational, and cultural causes.
They serve as a powerful mechanism for individuals and organizations to leave a
lasting impact and contribute to the betterment of society by supporting
charitable endeavors and addressing pressing social issues.