All property belonging to the yearly meeting is held in trust to be used for its charitable purposes, either generally or for specific uses as determined by the donor. Some property is in the form of land and buildings, the remainder being held in cash and investments. Land and buildings can either be functional, being held by Friends for their own occupation and use (such as meeting houses and offices), or be investment property to produce income. When property is held on a perpetual trust, commonly referred to as an endowment, the capital must not be expended, but only the income it produces.
In legal terms the constituent meetings of the Yearly Meeting of Friends in Britain are charities for the advancement of religion and, as such, are subject to the requirements of the Charities Acts 1992 and 1993, or to the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990. Each meeting in England & Wales should be either registered with the Charity Commissioners or formally recorded and notified by Friends Trusts Limited as an excepted charity. In Scotland each meeting should obtain recognition by the Inland Revenue as a Scottish charity. This will enable the meeting readily to demonstrate its entitlement to the fiscal reliefs available to charities. It will also define the meeting as a charity unit for the purpose of trusteeship of property and for reporting and accounting.
It is possible for individual trusts and local meetings to be separately recorded as charities in their own right and there may be special circumstances where this is appropriate, but it is recommended that the area meeting should normally be regarded as the charity unit. This recommendation to record the area meeting as a charity embracing all its constituent meetings takes account of the fact that individual membership lies with the area meeting and of the advice (see 15.03) that property should be held on behalf of area meetings.
The services of the Charity Commission, or in Scotland the Inland Revenue, are available to trustees of charities for advice on all matters; and particularly for the establishment of 'schemes' to facilitate the working of charitable trusts, or to provide for a variation of their objects in cases where the objects for which they were founded have become obsolete or unworkable. The duty is laid on trustees of charities to consider seeking such variations instead of allowing trust income to accumulate unspent. For smaller trusts there are provisions whereby trustees can initiate a merger with another trust or expend capital without the need for a formal scheme.
Next: 15.02
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