A trust is a legal structure where the owner of an asset is different from the person or people who benefit from it. It is a common legal form for a charity, in particular for grant givers, meaning they have a huge influence on on how the whole of civil society works.
I’ve just been reading a book called Social Justice, Charity and the Law by Francis Gladstone which was commissioned by NCVO in 1982. It’s got loads of interesting stuff in it, including an account of how trusts became a popular part of English law. Initially they were called a ‘use’, but gradually the term ‘trust’ became the accepted one.
Gladstone suggests that they were probably introduced because of the influence of the Franciscan orders. St. Francis of Assisi was a monk in late 12th century Italy who preached absolute poverty and suggested it wasn’t very Jesus-like for religious people to be rich. After this it became generally accepted that monks couldn’t own anything, which was a bit awkward because obviously the monasteries were really wealthy. Pope Gregory XIV got round this by saying that monks could have the ‘use’ of properties without actually owning them. The exact link between this and the legal concept of ‘use’ in English law isn’t clear, but it appeared here shortly after the Franciscan orders arrived in 1224.
It then became popular due to the unintended consequences of several legal changes brought in by Edward I to try and protect feudal revenues. One was the law (Quia Emptores) which stopped tenants from being able to create sub tenancies, which was a common way of avoiding the mediaeval equivalent of inheritance tax. So they started creating trusts so they could pass on the ‘use’ of the land instead. The other laws (the Mortmain statutes) tried to discourage people from gifting properties to impersonal personal owners like the church. This wasn’t great for the King because the owner would never die and he would lose the dues on them, so he said you could only make this kind of gift if you bought a royal licence. So again, people started gifting the ‘use’ of a property rather than the ownership to avoid the licence fee.
Obviously trusts today work very differently to medieval ones. But understanding the origins of the legal structures that underpin much of the charity sector today highlights two things. First, they have been part of a struggle for power between the state, the church and the wealthy since their inception 800 years ago. And second, the rich have understood for many centuries the advantages that they can get from dividing the ownership of property from the people that are meant to benefit from it.
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