Charitable and philanthropic structures in Jersey

The year 2024 marks a decade since the statutory Charities (Jersey) Law 2014 was introduced, and 40 years since the introduction of the Trusts (Jersey) Law 1984. Much has changed in this time. But what hasn't changed is the positive impact of charitable giving and the desire of donors to make a difference.

Due to its personal nature, philanthropy is an area many donors prefer to keep confidential. Consequently, private philanthropic structures continue to be attractive.

While donors have a giving goal, they often require professional support and advice to (1) achieve that goal through establishing an appropriate structure with flexibility for the donor to be involved in decision-making, including which causes to support, and (2) to ensure the good governance and administration of the structure so it can continue to support the chosen charitable causes for many years, even after the donor’s death.

Jersey is well established in the creation and administration of private structures for charitable or wider philanthropic purposes (meaning wider aims that may not fall within the strict definitions of “charitable”) in particular charitable trusts, non-charitable purpose trusts and foundations. Due to the flexibility of Jersey law, private structures can be created for a wide variety of philanthropic purposes. Jersey is particularly attractive to donors due to its stability as a jurisdiction (both economically and politically) and its robust legislation, judicial and regulatory regime, not to mention its wealth of experienced professional advisors.

Private philanthropic structures often complement larger structures which have been established for wealth preservation and succession planning or investment. They are also frequently viewed as a way to involve and unite different branches of high net worth families in a joined purpose outside of their principal business or investment activities. Philanthropy and the involvement in these structures created for charitable giving are therefore an increasingly important tool in preparing the next generation for the responsibilities and opportunities of wealth and to pass on family values.

Foundations 

Since their introduction in 2009, foundations have proven to be popular for philanthropy. Unlike a trust, a foundation has its own separate legal personality, allowing it to contract on its own behalf, and can be for charitable objects, non-charitable objects or a mixture of both. A foundation is an “ownerless” entity as there is no beneficial owner.

A foundation’s powers are exercised by its council in accordance with the powers and functions set out in its charter and regulations. A foundation must have (1) at least one council member, known as the "qualified member", who is registered under the Financial Services (Jersey) Law to carry on foundation services business, and (2) a "guardian" whose main role is to ensure the council carries out its functions in accordance with its objects. The founder can be both a council member and the guardian, allowing them to retain some control and monitor the council by virtue of being a council member or guardian.

The council may be populated with a handpicked combination of advisors, family members or persons with specialist knowledge in the philanthropic objects of the foundation.

Charitable trusts and non-charitable purpose trusts

In addition to charitable trusts for exclusively charitable purposes which satisfy the charity test, Jersey law permits the creation and enforcement of non-charitable purpose trusts (also known as “purpose trusts”).

The trustee of a purpose trust holds the trust fund upon trust to carry out specific purposes which do not qualify as exclusively charitable and are not for the benefit of beneficiaries. These can therefore be established for philanthropic purposes which do not qualify as exclusively charitable purposes under the charity test, or for a mixture of charitable and philanthropic purposes.

Under Jersey law, a purpose trust must provide for an “enforcer” whose duty it is to enforce the trust in relation to its non-charitable purposes. The enforcer must be a person different from the trustee. It's an ideal role for a donor who, having settled the trust for philanthropic purposes, wants to oversee the administration of the trust and the benefits it distributes. The enforcer can be a committee of family members or a corporate enforcer whose board is populated by family members and advisors.

Charity

The Charities (Jersey) Law 2014 provided a modern legal framework to support all types of international philanthropic and charitable enterprise in Jersey. This framework included: establishing a register of charities with a restricted section available for structures that do not solicit donations from the public (privately funded structures), reducing the amount of publicly available information, a Charity Commissioner, a statutory charity test, a modern definition of “charitable purposes”, and charitable tax reliefs.

Registering as a charity is voluntary, but the process regulates which organisations can use the term "charity" and which may be entitled to certain charitable tax reliefs. For those not wishing to register as a charity, tax neutrality is preserved for structures with no beneficiaries in Jersey and no income deriving from land and buildings in the island.

An entity will satisfy the test and be regarded as a charity if (1) all of its purposes are charitable purposes or purposes that are purely ancillary or incidental to any of its charitable purposes and (2) in giving effect to those purposes it provides a public benefit (in Jersey or elsewhere) to a reasonable degree.

Venture philanthropy

Another area developing in Jersey is venture philanthropy. For many high net worth investors, this is a natural extension of their business activities. Jersey Finance is a member of the European Venture Philanthropy Association. In addition to the structures described above, Jersey has various fund, corporate and limited partnership vehicles through which to make such investments.

How Ogier can help

We help clients achieve their philanthropic goals by advising on the creation and management of private philanthropic structures. Our Private Wealth team assists with establishing foundations, charitable trusts, non-charitable purpose trusts, and other philanthropic entities, staying current with the latest trends. We offer personal, professional, and discreet services. Contact our experienced team to see how we can support your vision.

About Ogier

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Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

Regulatory information can be found under Legal Notice