Charity Trust

Here are the basics about a Charity Trust:

???? What is a Charity Trust?
A Charity Trust is a legal arrangement where a person or organization (the settlor) gives property or assets to a group of people (the trustees) to manage for charitable purposes that benefit the public.

???? Key Elements of a Charity Trust:
Settlor: The person or entity who creates the trust and donates the assets.

Trustees: Individuals or organizations who manage the trust's assets and ensure they are used for charitable purposes.

Beneficiaries: The public or specific communities who benefit from the trust's charitable activities.

Trust Deed: A legal document that outlines the objectives of the trust, the duties of the trustees, and the rules for managing the assets.

Charitable Purpose: The trust must have aims that are considered charitable under the law (e.g., poverty relief, education, health, religion, environment).

???? Common Charitable Purposes:
Relief of poverty

Advancement of education

Promotion of health

Environmental protection

Advancement of religion

Community development

???? Legal and Tax Status:
In many countries, charity trusts must register with a government body (like the Charity Commission in the UK or Income Tax Department in India).

Once registered, they often receive tax-exempt status, meaning donations are deductible and the trust may not pay taxes on income.

???? Advantages of a Charity Trust:
Long-term impact through structured giving

Tax benefits for donors

Transparent and regulated structure

Helps fulfill social responsibility goals

???? Differences from Other Charitable Entities:
Feature Charity Trust Non-Profit Organization (NPO) Charitable Company
Legal Form Trust Association/Trust Company (usually limited)
Regulation Trust law Society Registration Act etc. Company law (e.g., Sec 8 Co. in India)
Governance Trustees Governing body/members Board of Directors
Suitable For Asset-based charity Membership-based orgs Professional NGOs