One of the most obvious changes brought about by Charities Act 2006 has been the substitution of Lord Macnaghten’s four heads for charitable purpose as established in Pemsel with new thirteen heads. The advancement religion is included in this new list but it now contains a new definition of religion.
Section 2 (3) of the Charities Act 2006 clarifies that religion as used in the heading of advancement of religion, now includes (i) a religion which involves belief in more than one god, and (ii) a religion which does not involve belief in a god. This is precisely the section in the Act which has caused a stir in the media which seems to think that there is a brand new definition of religion that is contrary to existing case law; thus capable of dramatically changing the positions of organisations like the Church of Scientology. Closer analysis of the wording of Section 2(3) reveals that Act clarifies and consolidates existing case law. Belief systems which have a multitude of deities or no Supreme Being have been considered to be religious before. Smith takes the example of the case Yeap Cheah Neo V Ong Chen Neo, involving ancestor worship. The common perception is that it failed to satisfy the Privy Council as being a religion because it lacked the existence of a single anthromorphic being. In fact, Smith highlights that it failed on the public benefit element. Moreover, courts have accepted multi-deity religions such as Hinduism in Varsani V Jesani and the courts have generally recognised Buddhism- a belief system with no God; ‘despite the inherently philosophical nature of Buddhist beliefs and practices and the absence of a Supreme deity, it has been recognised by the courts over the years as undoubtedly a religion for the purpose of charitable status’. Moreover, the Goodman Report published in 1976 declared that account must be taken of all religion whether they are monolithic or not.
An interesting question regarding the new definition of ‘religion’ is the relevance of the worship requirement. In Ex Parte Segerdal, ‘Worship’ was characterised by ‘some at least of the following characteristics; submission to the object worshipped, veneration of that object, praise, thanksgiving, prayer or intercession’. The Church of Scientology practices did not conform to this definition. The problem is that the wording of the Act does not amount to a full definition of religion. It merely states that ‘religion’ for the purpose of being charitable includes those religions that have a supreme being and those that do not. In Scientology’s case it had already been established in the 1999 Charity Commission decision that there was a ‘supreme being’. That is not why it failed to be a religion. It was the fact that their practices did not conform to what the Commission viewed as ‘worship’ did. So it is essential to ask, because the Act does not define religion explicitly, will the courts or indeed the Charity Commission, use the ‘worship’ element?
Smith is under the view that the Act did not attempt a strict statutory definition of religion so that the courts and the charity commission retain a degree of flexibility. The Charity Commission’s answer to the consultation question regarding ‘worship’ in Draft Supplementary Guidance for Consultation published in February of 2008 suggests that qualifying as a religion under Section 2(3) of the Act will not be sufficient to be regarded as a religion, suggesting there is a further condition. However, the Commission said that instead of the word ‘worship’ it may be appropriate to use ‘terms as worship or have reverence or respect for, or have a connection with the Supreme Being or entity’. Whether auditing and training will meet this criteria is unknown and the suggestions made by the Commission are not concrete.
Another significant change brought about by the new Charities Act is the abolition of the presumption of public benefit that formerly applied to the old heads of charity. Now, each potential religious charity will have to establish on its own particular merits that its purpose does actually confer a benefit on the public. This could prove to problematic legally because there is no unitary public benefit test within English law although the Charity Commission is producing guidance material. The policy implication for this change is considerable and will be explored in the policy section which follows.
Smith has highlighted that ‘the level of public benefit may now have to be on a different character and of a higher standard to satisfy the requirement of positive proof’. Given that it is harder to provide positive proof than to rebut a presumption, this is likely to be the case.
So does the statutory removal of the public benefit presumption change the Scientology’s position? The answer seems to be; not very much at all. The problem here for the Church of Scientology is that there is no substantive change in the case law that would seriously benefit their position when it comes to judging public benefit. Unless the Charity Commission or the courts produce a brand new test of public benefit or set a low threshold for public benefit it will likely not affect the decision. Moreover, Scientology never benefited from the presumption in 1999. In 1999 they were asked to provide evidence of public benefit and they will be certainly be asked to do so again, should Scientology apply under the 2006 Act.
4. Policy Implications of Changes made by the Charities Act 2006 and Religious Charities in general
(i) The Interaction of the State and Religious Organisation
Beneath what appears to be a technical legal debate is the policy question of whether the law should be entangling itself with religious organisations and give them special treatment by bestowing upon them charitable status.
All the special treatments of new and existing charities share one thing in common; it is given at the expense of the State. As Gardner highlights sometimes these are obvious sacrifices made by the state and sometimes they are not. For example, the provision of the Charity Commission and tax relief is an obvious one. On the other hand the provisions extending the endurance of charitable trusts are less obvious. Moreover, if we are to be concerned with appearances, the position of the UK and Gift Aid looks more like a direct government subsidy. In the United States when the organisations receive tax-exempt status and when donations made results in the tax refund of individual contributors, it does appears less paternalistic.
The Charity Commission noted that in June 2005, there were around 170,000 charities on its Register and their collective total annual income at the second quarter of the financial year was at an excess of 37 billion pounds. Given these figures one is forced to ask the question, ‘do charities need favourable treatment from the government?’
Moreover, who Professor Edge takes an abolitionist’s stance with regards to religious charities, argues that by granting religious charities fiscal benefits, it raises the tax burden on the general public that may not support the views or philosophies of religions that they are essentially supporting financially no matter how indirectly. Edge asks ‘Would a Christian necessarily want to support Islamic proselytising, and vice versa?’ By allowing charitable status the state can effectively force the public to support religious organisations which individuals may ‘passionately believe to be in error’.
So what are the arguments that support the existence of religious charities? While there are many extensive legal and political arguments that may support the notion that religious groups should not have charitable status at all, there is the simple albeit controversial counter-argument which essentially amounts to saying; religion is good. King argues that ‘the promotion and sustenance of religion and the spreading of its message throughout the world is of itself beneficial to humanity’ A bold claim, he supports this by saying that ‘unlike other animals in this world, we are cerebral beings, capable of mental and moral improvement’. While this is unmistakeably a romantic view of religion and, without doubt, there are many academics and politicians who would try to tear this argument apart using historical tales of religious wrongs, it is an argument that has been voiced in the past by the judiciary. In Gilmour V Coats when Lord Reid made the statement ‘any religion is better than none’.
While not endorsing any religion over others, it is hard to deny that religion permeates almost all aspects of society today. So fundamental is the idea of religion and the freedom to worship in today’s society that it is guaranteed by the UN ICCPR, the Declaration of Human Rights as well as the European Convention of Human Rights.
King has also suggested that religion has been way standards are set in today’s society. This view is not without its supporters. Andrew Hind and Dame Suzi Lether the Chief Executive and the Chair of the Charity Commission respectively have acknowledged in their foreword for the Draft Supplementary for Consultation that ‘religion helps to provide a moral and ethical framework for people to live by and can play an important part in building social capital and community cohesion’.
(ii) The removal of the presumption of public benefit
In the days before the enactment of the Charities Act 2006, there was considerable academic debate regarding the existence of presumption of public benefit that religious charities enjoyed. This presumption had been the thorn in the eyes of many commentators who took an abolitionist stance against religious charities. Longley for example said ‘At the very least should not the current presumption…that a trust for the advancement of religion is by definition for the public benefit removed?’ Edge who takes a similar stance was seriously concerned that despite the subsidies religious charities were receiving from public money, the religious charities were ‘very light on public benefit.’ Watt has also previously argued that the move will be a sensible one but there are fresh policy issues that arise from the need for charities to provide positive proof of public benefit. Despite these opinions there are some serious policy concerns that arise from the removal of presumption. The courts and the Charities Commission in the past have preferred not to decide on the individual value of religions. It has long been accepted that the courts are unwilling to accept charities for political purpose to be charitable. This is a position that the courts have taken because they feel the legal process is not an appropriate way to determine the worth of political purpose. Now that the presumption has been removed and religious groups are required to provide public benefit, the courts are in an unenviable position of having to decide on the value of religious groups. Moreover, the difficulty in fixing the threshold of public benefit at an appropriate level is also anticipated. As Watt notes this is a ‘politically sensitive, economically complex and morally individuious to attempt to rate charities according to the degree to which they are beneficial to the public’ and ‘shifts the costs of proof on to the trust, organisation or foundation seeking charitable status.’ However, these were difficulties anticipated by legislators and the Charity Commission is providing guidance on the meaning of public benefit. Moreover given the fiscal and trusts law advantages available once charitable status has been granted, it is well worth the trouble for religious groups to meet the higher burden of proof. It is not unreasonable of the government to discriminate on basis of public benefit because the benefit of charitable status leads to direct and indirect government subsidies. It would not be far-fetched to say that cost-benefit analysis should be carried out to assess charitable status. The new positive requirement of public benefit may add to public confidence in charities as well as promoting consistency in the allocation of public resources.
(iii) Human Rights Implications
The policy implications of allowing groups such as Scientology to become a religion has to be viewed, not only in light of UK case law and social dynamics but also with regards to international human rights treaties and instruments.
Article 18 of the International Covenant on Civil and Political Rights; “Everyone shall have the right to freedom of thought, conscience and religion. This right shall include freedom to have or to adopt a religion or belief of his choice, and freedom, either individually or in community with others and in public or private, to manifest his religion or belief in worship, observance, practice and teaching.” The UN Human Rights Committee has noted that ‘religion’ and ‘belief’ is ‘not limited in its application to traditional religions or to religions and beliefs with institutional characteristics or practices analogous to those of traditional religions’.
The new definition of religion in the 2006 does serve to conform closer to these broader consideration of the definition of religion and this has been welcomed.
Moreover, the Charity Commission is a public authority under Section 6 of the Human Rights Act and therefore must act in compliance with the ECHR. The Commission claims to have acted accordingly with ECHR obligations in 1999 when deciding the Scientology case but there are wider concerns. Under Article 9, it may be possible to contend under Article 9 regarding the freedom of thought, conscience and religion, religious groups whose charitable status is withdrawn may be able to bring a case to the effect that the withdrawal of tax concessions diminishes their ability as a religious organisation concerned with teaching and giving proper facilities for worship and practical observance of their faiths’ and consequently breaching the rights of individual adherents of the religion under Article 9.
Moreover, Article 14 prohibits the discrimination in the enjoyment of the freedoms and rights guaranteed under the Convention and as Smith highlights the Article 14 permeates the whole of the convention. Following this logic, Smith notes a potential area for litigation under Article 1 and 14 of the ECHR; ‘it has been suggested that if fiscal benefits are to be conferred on some religions as a result of registration as a charity but not on others where a value judgement has been made they are not sufficient merit to justify charitable status, they it is arguable that in so far that this may amount to an unequal treatment of one religion as against another.’
(vi) Social Inclusion or Discrimination?
Church of Scientology has won some major battles in their pursuit for legal recognition as a religion in other jurisdictions. While the fiscal privileges of being recognised as a charity are obvious, it is also evident that their battle is not just for tax breaks but also for social inclusion. This argument is supported by O’Halloran who notes that historically, charity is was about social endorsement of the class or group that the organisation was aiding. Similarly, denying an organisation like the Church of Scientology charitable status can also be interpreted as a condemnation of a religious group and their practices. In the Times article Yingling, a lawyer for the Church of Scientology voiced her concern about discrimination;
“The biggest discrimination is that you are looked at as a second-class citizen because of the failure to recognise Scientology as a charity. They can call you names like ‘nefarious cult’, which you wouldn’t do to the Church of England.”
Quint and Hodkin notes that words such as ‘religion’ and ‘church’ in a social and political context has evolved over time. This is perhaps where the discussion of the relationship to public perception and granting of charitable status. The Charity Commission has formally stated that charitable basis is not decided on the basis of public opinion. However, they have recognised that public concerns based on evidence of detriment or harm then this would be taken into consideration in any public benefit assessment. So it would seem that public opinion if it can be substantiated does carry weight. Moreover, one of the reasons behind the 2006 Act’s partial definition of religion was surely to allow flexibility given that social and political definition of religion is subject to changes.
Moreover, Quint and Hodkins argue convincingly that the word ‘religion’ connotes ‘preferential treatment.’ Subsequently there are those groups that are discriminated against.
Is charitable status being used as a tool to discriminate against certain controversial groups like the Church of Scientology by the government?
Generally, English law had taken a very tolerant view of defining religion for the purposes of charitable purpose since the nineteenth century. Before the nineteenth century for the purposes of the law of charity, religion meant the Christian religion or reasonable variations of Christianity. It was not until Thornton V Howe, heralded the advent of religious tolerance. In a much celebrated dictum, Sir John Romilly MR stated:
‘In this respect, I am of opinion that the Court of Chancery makes no distinction between one sort of religion and another. They are equally bequests which are included in the general term of charitable bequests. Neither does the court in this respect, make any distinction between one religion and another….although the court might consider the opinions sought to be propagated foolish or even devoid of foundation, it would not, on that account declare it void, or take it out of the class if legacies which are included in the general terms charitable bequests’.
The common law courts had generally welcomed this approach and considering this background of tolerance, the rejection of the Church of Scientology is a stark contrast in what seems a socially inclusive tradition of granting charitable status. When the Charity Commission reached the decision that the Church of Scientology could not be granted the status of a charity, Quint and Hodkin called this decision a ‘retrograde step to revert to a Judeo-Christian oriented definition of religion, contrary to the trend towards greater diversity and pluralism seen elsewhere’. This seems a valid argument considering that the Commission did not refer to those recognised religious bodies that fail to meet this requirement and openly admitted that they had not reached the decision because of the presence of binding precedent. Moreover, the Commission rebutted the presumption of public benefit by using headings of judicial and public concern and the newness of religion. Normally only those religions that are considered ‘adverse to the foundation of all religion and…subversive to all morality’rebut the presumption. Moreover when deciding the ‘public’ requirement of the public benefit, the Commission chose to dwell on the ‘auditing’ and ‘training’ practices of Scientology without concern for some of the more public elements of Scientology which include public ceremonies.The Commission asserted that even though there were public practices of religion, unless the practice was one by which the religion advanced itself was not public, it could not be said to be of public benefit. This does not sit well with the case of Neville Estates V Madden where the exclusivity of the Jewish religion and practices were held to be charitable because the members of the religion lived in the world and mixed with others in society. Given these inconsistencies one would be forgiven for thinking that the Charity Commission had an agenda for discrimination with regards to Scientology.
It is now the hope of some academic commentators that the Charities Act 2006, containing a more inclusive definition of religion will continue the tradition of tolerance and diversity in the treatment of religions in charity law.
Now is an appropriate time to examine how other jurisdictions have treated Scientology as a religion for certain legal purposes. Especially the moderate definitions from other common law systems may be a valid approach that the UK may follow.
One country that remains at the forefront of countries that remain hostile to the Church of Scientology is Germany. The German government has taken some drastic steps to in an effort to ban the Church of Scientology.
An investigation launched by 16 interior ministers of German states scrutinises the activities of the Church of Scientology in the hopes of gathering enough evidence to ban the Church of Scientology operating Germany. In 1997, after a similar state-level report, it was concluded that "the Scientology organization, agenda and activities are marked by objectives that are fundamentally and permanently directed at abolishing the free democratic basic order."
In contrast, the Church of Scientology has been accepted as a religion and granted tax-exempt status in the United States. After a long legal battle, the Supreme Court that Scientology was a religion and qualified for tax-exempt status ruled it in 1993.
The expansive American approach to defining religion in had been a stark contrast to Germany’s hostile view of Scientology as well as England’s relatively restrictive view of Scientology as a religious charity. For comparative purposes however, it must be remembered that the American definition of religion was developed mainly under the free exercise clause rather than charitable status.
The Australian position is a more moderate approach, lying in the middle ground between the UK position and the US. In 1982, the Church New Faith was granted special leave to argue that Scientology was a religion. In their decision in Church of the New Faith V Commissioner for Payroll Tax, Mason ACJ offered an Australian version of the test of religion;
“for the purposes of law, the criteria of religion are twofold: first belief in a supernatural being, thing or principle and second the acceptance of canons of conduct in order to give effect to that belief, though canons of conduct which offend against the ordinary laws are outside the area of any immunity, privilege or right conferred on the grounds of religion’.
The High Court of New Zealand also adopted this position in the following year.
5. Conclusion
As far as Scientology is concerned it appears that the 2006 Charities Act will not have far-reaching legal implications. Given the tolerant way that the courts have been treating multi-deity religions as well as those that lack a monolithic element, the new definition of religion will not be making groundbreaking changes as the Times article suggests. Moreover, even if Scientology were to qualify under the ‘new’ definition of religion, unless a different approach to testing public benefit is taken by the Charity Commission, any application for charitable status will likely end in rejection. However, the social and policy issues arising from this debate do not seem as easy to decipher. The abolition of the presumption of public benefit with regards to religious charities has seen as departure from the judiciary’s reluctance to get involved with adjudicating value to individual religions and developments will surely provide some fascinating case law. Moreover, even after legislative consolidation of case law regarding charitable status for the advancement of religion, it remains a highly contested issue and it is evident that the debate for and against the abolition of religious charities in today’s heterogeneous society will continue. Finally, the international debate on the acceptance of Scientology, the human rights implications will be watched with interest for they are factors that can influence the laws governing charitable status in England.
Bibliography
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Edge, P., ‘Religion and Law: An Introduction’, Aldershot: Ashgate Publishing Company, 2006
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Yeap Cheah Neo V Ong Chen Neo [1875] 6 LR PC 381
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Regina V Registrar General, Ex Parte Segerdal [1970] 2 Q B 709
Re Price [1943] Ch 422
Gilmour V Coates [1949] A.C. 426
Varsani V Jesani [1998] 2 WLR 255
In Ex Parte Segerdal [1970] 2. QB, 697
Neville Estates V Madden [1962] 1 Ch 832
New Faith V Commissioner for Payroll Tax (Vic) (1982-83) 154 CLR 120
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The Charities Act 2006
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Kennedy, D. “Scientologists set to cash in on tax break” Accessed at 17/04/2008
Draft Supplementary Guidance for Consultation ‘Public Benefit and the Advancement of Religion’, Charity Commission Feb 2008
Charity Commissioners ‘Application for registration as a Charity by the Church of Scientology (England and Wales), 17/11/1999
United Nations Human Rights Committee General Comment 22 on Article 18 ICCPR
Kennedy, D. “Scientologists set to cash in on tax break” Accessed at 17/04/2008
Gardner, S., ‘An Introduction to the Law of Trust’, 2nd Edition, Oxford: Oxford University Press, 2003 at p. 100
Charity Commissioners ‘Application for registration as a Charity by the Church of Scientology (England and Wales), 17/11/1999
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Haley, M., ‘Nutshells: Equity and Trusts’, 7th Edition, London: Sweet and Maxwell, 2007 at p.101
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Smith, Op. Cit. note 16 at p. 61 See Lord Denning in R V Registrar-General, Ex Parte Segerdal. [1970] 2 QB 697 at 707 and per Dillon J in Re South Place Ethical Society [1980] 1 W.L.R.1565 at 1673
Goodman Report (1976) as quoted by Ramjohn, M., ‘Unlocking Trusts’ Oxford: Hodder Arnold, 2005 at p. 256
Smith, Op. Cit. note 16 at p. 61
Draft Supplementary Guidance for Consultation ‘Public Benefit and the Advancement of Religion’, Charity Commission Feb 2008
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Gardner, Op. Cit. note 2 at p. 103
Sanders, A., “The Mystery of Public Benefit”, (2007), 10(3) Charity Law and Practice Review, 33
Edge, P., ‘Charitable status for the advancement of religion: An Abolitionist’s View’, (1995) 3 Charity Law and Practice Review at p.32
King, M., “Charitable Status for the Advancement of Religion-The Proponent’s View”, 1995, 3(3) Charity Law and Practice Review at p. 180
Charity Commission, Op. Cit. note. 22 at p. 3
Longley, A., ‘Religion as Charity: Some Reflections”, (1992) 1(2) Charity Law and Practice Review, at p. 89
Edge, Op. Cit. note 26 at p. 32
Watt, G., ‘Trusts and Equity’, 2nd Edition, Oxford: Oxford University Press, 2006 at p. 247
Edge, Op. Cit. note 26 at p. 31
Watt, Op. Cit. note 34 at p. 237
Woodfield, S., “Doing God’s Work: Is Religion Always Charitable?”, (1996) 8 Auckland University Law Review, at p. 44
United Nations Human Rights Committee General Comment 22 on Article 18 ICCPR
Smith Op. Cit. note 16 at p74
O’Halloran, K., “Charity and Social Inclusion: An International Study”, London: Routledge, 2007at p. 15
Quint.F., Hodkin, P., “The Development of Tolerance and Diversity in the Treatment of Religion in Charity Law”, (2007) 10(2) Charity Law Review at p. 2-3
Charity Commission, Op. Cit. note 22
Quint and Hodkin, Op. Cit. note 45 at p.2-3
Quint and Hodkin, Op. Cit. note 45
Howe V Thornton, [1862] 31 Beav 14
Charity Commission, Op. Cit. note 3 at p.48
Quint and Hodkin, Op. Cit. note 45 at p. 1
(Vic) (1982-83) 154 CLR 120