Charity status

Letter

Dear Sirs,

Re: Wiki UK Limited (operating name Wikimedia UK)

Your ref: [insert]

I refer to your letter dated 17 April 2009 (“your Letter”). I kindly note your apology for delays in responding to previous correspondence and that you will be writing separately to Nick Palmer MP on this point.

As regards the application of Wiki UK Limited for charitable status, I do not agree with your finding that the stated objects of the company are not charitable in law. For the reasons set out in this letter, I would ask you to formally reconsider this decision.

Advancement of education

It is stated in your Letter “the production of an encyclopaedia is not the charitable advancement of education ... in law”. This cannot, in light of the relevant authorities, be a correct statement of the law. The charitable head of “advancement of education” can cover “almost any form of worthwhile instruction or cultural advancement”: Hanbury and Martin, Modern Equity, 16th ed, p404. It will be noted that the following activities have been held to be charitable under the head of “advancement of education”:

• The production of a dictionary: Re Stanford [1924] 1 Ch 73 (see also [1971] Ch 626, 630);
• The publication of Law Reports : Incorporated Council of Law Reporting for England and Wales v AG [1972] Ch 73, Court of Appeal;
• The establishment and maintenance of museums: British Museum Trustees v White (1826) 2 Sm & St 595; Re Pinion [1965] Ch 85;

Re Shaw

Your Letter refers to the case of Re Shaw's WT [1957] 1 WLR 729 and points to the dictum of Harman J's that “... if the object be merely the increase of knowledge, that is not in itself a charitable object unless it be combined with teaching or education”.

I note, first of all, that the requirement of “teaching or education” is assumed - even according to the fragment of the dictum that your Letter cites - to be an additional requirement only where the primary object is the conduct of original research (“the mere increase of knowledge”) rather than the dissemination of existing knowledge and research. Wikipedia and other Wikimedia projects (Wikiversity, Wikibooks & Wikischools) are exclusively concerned with the public dissemination of knowledge and research, rather than with the conduct of original research projects.

However, and in any event, in Re Hopkins [1965] Ch 669, Wilberforce J held:

“I think, therefore, that the word "education" as used by Harman J. In re Shaw, decd.; Public Trustee v. Day must be used in a wide sense, certainly extending beyond teaching, and that the requirement is that, in order to be charitable, research must either be of educational value to the researcher or must be so directed as to lead to something which will pass into the store of educational material, or so as to improve the sum of communicable knowledge in an area which education may cover...”

It is therefore not correct as a matter of law to say, as your Letter appears to imply, that only direct “teaching” or instruction will be covered under the head of education. This was disapproved in Re Hopkins. Instead, in order to be charitable, the research must simply lead to something that will pass into the store of educational material or improve the sum of communicable knowledge. Returning to Re Hopkins, the decision in Re Shaw that a (highly unusual) trust to 'research the advantages' of a phonetic alphabet was not charitable, was seen as having been made on the grounds that such an object would not lead to increase “the sum of communicable knowledge”, presumably because there would not be any real public or scholarly interest in the outcome of such a project'.

For those reasons, the decision in Re Shaw, which concerned a highly unusual trust, has very little relevance to our company's objects and hence to its application for charitable status. Indeed, nothing in that decision serves to indicate that the publication of a free online encyclopaedia would not constitute a charitable “advancement of education”.

Relevant authorities

The decision in Incorporated Council of Law Reporting for England and Wales v AG [1972] Ch 73 would be applied in this situation. In that case, the Court of Appeal held that the publication of the Law Reports series was within the charitable head of “advancement of education”. By analogy, an online facility for the collection and dissemination of knowledge and other “educational, cultural and historic content” would be taken to fall within this head of charity.

In the Incorporated Council of Law Reporting case, Sachs LJ said:

“It would be odd indeed and contrary to the trend of judicial decisions if the institution and maintenance of a library for the study of a learned subject or of something rightly called a science did not at least prima facie fall within the phrase "advancement of education."

The justification for treating the publication of a free, online encyclopaedia, as within the rubric of “advancement of education” is even stronger, because the particular issue in the Incorporated Council case, of whether a resource used by professionals for the advancement of their careers could be said to be within the realm of “advancement of education”, does not arise in the case of the Wikipedia website and the other projects of the Wikimedia Foundation.

You will note, finally, that in Re Stanford [1924] 1 Ch 73, it was assumed by all parties that a gift for the completion and publication of a dictionary was charitable. This case was cited at first instance in the Incorporated Council of Law Reporting case: [1971] Ch 626 at 630. This is a very close analogy to the objects of our company. We are surprised that your Letter does not cite this case.

Conclusion

At this stage, I would ask HMRC to review their decision on the application of Wiki UK Limited for charitable status, taking consideration of the points made above.

You should note that we are confident in our view that our objects are charitable in law, and we will look to appeal any decision that we feel is based on a misapplication of the law in this situation.

Yours sincerely,