Case: Scottish Burial Reform and Cremation Society Ltd v Glasgow Corporation [1967] UKHL 3 ; [1968] AC 138
Outcome: considered
A case with some similarity to the present is Scottish Burial Reform and Cremation Society Ltd v Glasgow Corporation [1967] UKHL 3 ; [1968] AC 138. In that case the Society carried on a crematorium for which fees were charged. The fees were not distributed to members and were re-invested in the Society. It was held that the provision of cremation services was a charity for public benefit. It was argued against the Society that the charging of a fee for the cremation services meant that their provision could not be charitable. Lord Reid (with whom Lord Guest agreed) said, at 147-148: "[I]t has never been held that objects, otherwise charitable, cease to be charitable if beneficiaries are required to make payments for what they receive. It may even be that public demand for the kind of service which the charity provides becomes so large that there is room for a commercial undertaking to come in and supply similar services on a commercial basis. But no authority and no reason has been put forward for holding that when that stage is reached the objects and activities or the non-profit-earning charitable organisation cease to be charitable." See also at 149 per Lord Upjohn and at 156-157 per Lord Wilberforce. Lord Pearson, at 157, concurred. 36 While these cases are of assistance to Word, they do not entirely answer the question. The proposition for which they stand is that where an organisation engages in an activity that has a charitable purpose, that purpose will not be lost where a profit is made in conducting that activity, provided that the profit is not distributed to members and is used exclusively (save for allowable incidental purposes) for charitable purposes. They do not address the question whether an activity that is not in itself charitable, but that is conducted for the purpose of producing income to be used for a charitable purpose, may itself be charitable. 37 Nonetheless, I think it is clear from the above passages that the making of a profit through trade or business is not necessarily inconsistent with a charitable purpose and that the true question to be asked is the purpose of the making of the profit. If the purpose is commercial then the exclusive purpose of the organisation is not charitable; if the purpose is selfless then it may be. Prior to 1996, the sole profit-making activity engaged in by Word was the investment of moneys provided by public investors who shared Word's beliefs and aims. The profits thereby made were then provided to Wycliffe and similar organisations. If, consistent with my understanding of the passages cited above, the true focus of the enquiry is on the purpose and not the manner of the profit-making, then it is clear that Word's purposes were, up to 1996 and subject to the second matter which I will come to shortly, charitable. 50 It is clear from the passages from the Incorporated Council of Law Reporting case and the Scottish Burial case that the key to determining charitable status is motive. An investigation of motive cannot be conducted without considering the ultimate object of an organisation's activities. It follows that Word is right to argue that Wycliffe's activities are relevant to whether Word is entitled to charitable status. I also accept the corollary, namely that the location of Wycliffe's activities is also relevant.