Otago Daily Times

Cases of note for or­gan­i­sa­tions seek­ing char­i­ta­ble sta­tus

- Society · Discrimination · Charity · Human Rights · New Zealand · Social Enterprise · Philanthropy · Greenpeace

CHAR­I­TIES and so­cial en­trepreneur­s should take note of two re­cent court de­ci­sions which could make it eas­ier for so­cial en­ter­prises or or­gan­i­sa­tions which have char­i­ta­ble pur­poses to qual­ify for char­i­ta­ble sta­tus and be el­i­gi­ble for tax ad­van­tages and fund­ing.

To qual­ify for char­i­ta­ble sta­tus, an or­gan­i­sa­tion must ap­ply prof­its ex­clu­sively to char­i­ta­ble pur­poses.

Un­der the law, the char­ity can op­er­ate a busi­ness which is an­cil­lary to the core char­i­ta­ble pur­poses, so long as the prof­its are used for the char­i­ta­ble pur­poses.

Two re­cent de­ci­sions suggest that the courts are tak­ing a broader ap­proach to what kind of ac­tiv­i­ties are con­sid­ered to ad­vance the pub­lic ben­e­fit so as to en­ti­tle or­gan­i­sa­tions to char­i­ta­ble sta­tus.

Un­der the Char­i­ties Act 2005, an or­gan­i­sa­tion qual­i­fies for reg­is­tra­tion as a char­i­ta­ble en­tity if it ‘‘is es­tab­lished and main­tained ex­clu­sively for char­i­ta­ble pur­poses’’ and ‘‘is not car­ried on for the pri­vate pe­cu­niary profit of any in­di­vid­ual’’.

Char­i­ta­ble pur­poses in­clude the re­lief of poverty, the ad­vance­ment of ed­u­ca­tion, the ad­vance­ment of re­li­gion, or any other mat­ter ben­e­fi­cial to the com­mu­nity.

Twelve years ago, in 2008, Green­peace of New Zealand

In­cor­po­rated ap­plied for reg­is­tra­tion as a char­ity.

Its ap­pli­ca­tion was de­clined, and Green­peace has been fight­ing the case through the courts ever since.

The Char­i­ties Reg­is­tra­tion Board had de­clined Green­peace’s ap­pli­ca­tion for char­i­ta­ble sta­tus on the ba­sis that Green­peace’s pur­poses in­cluded ad­vo­cat­ing its own views on the pro­tec­tion of the en­vi­ron­ment and on peace, nu­clear dis­ar­ma­ment and the elim­i­na­tion of weapons of mass de­struc­tion and the board did not con­sider that th­ese pur­poses were of pub­lic ben­e­fit and char­i­ta­ble.

It also con­sid­ered that Green­peace NZ was dis­qual­i­fied from char­i­ta­ble sta­tus be­cause it en­gaged in and en­dorsed il­le­gal ac­tiv­i­ties to sup­port its pur­poses.

The High Court dis­agreed. In its judge­ment is­sued on Au­gust 10, 2020, the court ruled that Green­peace qual­i­fies for char­i­ta­ble sta­tus, be­cause its main ac­tiv­ity is ad­vo­cacy for the pro­tec­tion of the en­vi­ron­ment ad­dress­ing cli­mate change, pro­tect­ing the ocean and im­prov­ing the qual­ity of New Zealand’s fresh­wa­ter, which has a char­i­ta­ble pub­lic ben­e­fit as it con­trib­utes to the broad­based sup­port and ef­fort nec­es­sary for the end goal of pro­tect­ing the en­vi­ron­ment.

Green­peace’s goal of pro­mot­ing nu­clear dis­ar­ma­ment and the elim­i­na­tion of weapons of mass de­struc­tion would not be a char­i­ta­ble pur­pose of pub­lic ben­e­fit in it­self (as there are com­plex pol­icy de­ci­sions in­volved in de­ter­min­ing whether peace is bet­ter achieved by dis­ar­ma­ment or bar­gain­ing by strength), but the court ac­cepted Green­peace’s ar­gu­ment that it had al­ready ‘‘won’’ on th­ese is­sues when New Zealand in­sti­gated its nu­clear­free leg­is­la­tion and was no longer fo­cused on th­ese is­sues. The High Court ruled that Green­peace NZ was en­ti­tled to be reg­is­tered as a char­ity.

The other re­cent de­ci­sion re­lates to the char­i­ta­ble sta­tus of Fam­ily First, the ‘‘fam­ily val­ues’’ ad­vo­cacy and ed­u­ca­tion group. Fam­ily First, which states on its web­site that it ‘‘seeks to pro­mote strong fam­i­lies, mar­riage, and the value of life . . .’’, holds so­cially con­ser­va­tive views on is­sues such as LGBT rights, abor­tion, euthanasia and drug re­form, and its cam­paigns have in­cluded op­po­si­tion to the an­ti­smack­ing and same­sex mar­riage law changes.

Fam­ily First was first dereg­is­tered as a char­ity in 2013, and then again in 2017, the Char­i­ties Reg­is­tra­tion Board hav­ing de­cided that Fam­ily First’s pur­poses were not ex­clu­sively char­i­ta­ble and its core pur­pose of pro­mot­ing its con­cep­tion of the ‘‘tra­di­tional fam­ily’’ was not in the pub­lic ben­e­fit in the char­i­ta­ble sense un­der the Char­i­ties Act.

The Court of Ap­peal dis­agreed, with two of the three judges de­cid­ing that de­spite its fo­cus on the ‘‘tra­di­tional fam­ily’’, Fam­ily First’s ad­vo­cacy for the im­por­tance of fam­ily and mar­riage nev­er­the­less has a char­i­ta­ble pub­lic ben­e­fit.

The dis­sent­ing judge found it more dif­fi­cult to see how Fam­ily First’s pro­mo­tion of its par­tic­u­lar view­points on the ‘‘tra­di­tional fam­ily’’ and is­sues such as di­vorce, pros­ti­tu­tion, euthanasia, pornog­ra­phy and abor­tion was of pub­lic ben­e­fit.

Fam­ily First’s bat­tle may not be over yet, as the At­tor­ney­gen­eral has ap­plied for leave to ap­peal the de­ci­sion to the Supreme Court.

How­ever, th­ese wins for Green­peace and Fam­ily First may en­cour­age more not­for­prof­its and so­cial en­ter­prises, es­pe­cially those which have an ad­vo­cacy fo­cus, to con­sider ap­ply­ing for reg­is­tra­tion as a char­ity. Th­ese or­gan­i­sa­tions should first en­sure that they have clearly ar­tic­u­lated their char­i­ta­ble pur­poses so as to qual­ify them for char­i­ta­ble sta­tus. This can­not be mere lip ser­vice — the Green­peace and Fam­ily First cases are im­por­tant re­minders that char­i­ties can be in­ves­ti­gated at any time to check that they are act­ing in ac­cor­dance with the char­i­ta­ble pur­poses.

Rachel Laing is a se­nior solic­i­tor with Marks & Worth Lawyers and spe­cialises in in­tel­lec­tual prop­erty and pri­vacy law.

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