Trusts and charities are both nonprofit organizations that aim to benefit the public, but they have distinct legal structures and operational methods.
Trust
A trust is a legal arrangement where a person called the settlor transfers ownership of assets to a trustee, who manages those assets on behalf of a beneficiary or for a specified charitable purpose. The trust deed, a legal document, outlines the terms of the trust, including the identity of the trustee, beneficiary, and charitable purpose. Trusts are either private trusts, which are not subject to public scrutiny, or charitable trusts, which are registered with the appropriate authorities and subject to charity law.
Charity
A charity is a nonprofit organization that generates funds through donations, grants, or other means to provide services, advocate for causes, or support community initiatives. Charities are registered with the relevant authorities and are governed by charity law, which outlines their objectives, activities, and financial reporting requirements. Charities are subject to greater public scrutiny than private trusts.