We all know charity when we see it. Whether it’s a person at the supermarket collecting coins for Hospice Care, the family donating cans of food to the City Mission, or the group of friends covered in dirt and sweat after a hard day of planting trees in a reserve.
Charity is easy to identify, or so we might think.
The recent Supreme Court decision of Attorney-General v Family First New Zealand highlighted that it is not always so easy to discern whether your actions and purposes are actually charitable in nature for meeting the legal “definition” of a charity.
“Family First” is a relatively well know organisation in New Zealand that aims to promote traditional views of marriage and family in society, and advocates on a variety of political issues. Family First became a registered charity in 2006, but in 2013 the Charities Registration Board (CRB) resolved to deregister Family First as a charity on the following grounds:
This deregistration sparked a prolonged battle in Court by Family First, culminating in the recent Supreme Court decision which confirmed that the CRB was justified in deregistering Family First as a charity.
The Supreme Court looked at section 5 of the Charities Act 2005, which provides the meaning of charitable purpose and describes the effects of having an extra non-charitable purpose. That section states:
“… charitable purpose includes every charitable purpose, whether it relates to the relief of poverty, the advancement of education or religion, or any other matter beneficial to the community.”
“…if the purposes of a trust, society, or an institution include a non-charitable purpose (for example, advocacy) that is merely ancillary to a charitable purpose of the trust, society, or institution, the presence of that non-charitable purpose does not prevent the trustees of the trust, the society, or the institution from qualifying for registration as a charitable entity.”
The Supreme Court based its finding that Family First’s purposes were not principally charitable on the following core reasons:
Advancement of Education
The material developed and produced by Family First was for the greater purpose of political advocacy than education. The Supreme Court found that educational material is generally neutral in its information, whereas the material produced by Family First did not provide this objective balance and instead served to persuade people of a specific point of view.
The Supreme Court did say that advancing a specific viewpoint would not necessarily disqualify an entity from being educational, but that it must be considered whether the entity’s purpose is genuinely to educate rather than advocate and that the means of providing that education should be balanced and have general objectivity.
Benefit to the Community
The Supreme Court also found that, while the promotion of the family as foundational to a stable society may be a charitable object, Family First’s more specific advocacy of the role and importance of their particular interpretation of family was not self-evidently beneficial in the charitable sense.
The Supreme Court noted that most charitable purposes are able to be widely recognised as charitable purposes in and of themselves (the protection and promotion of human rights, protection of the environment and the promotion of amenities that make communities pleasant being specific examples used by the Court). Family First’s purposes, however, were not advocacy for ends that were themselves charitable but were rather advocacy for free-standing political issues.
This case illustrates the importance of clearly defining your charity’s objects and activities so that your core purpose does not cross the line to being a non-charitable activity. Not only must you satisfy the CRB that your objects are charitable upon registration, you must ensure that your objects and actions continue to be so throughout your charity’s life.
If you are thinking of creating a charitable trust or organisation, or if you are a member of an existing charity, you will need to carefully turn your mind to whether or not your objects truly fulfil the requirements of the Charities Act.
The team at Mortlock McCormack Law act for numerous charities and is well equipped to help you with these processes. Please do not hesitate to contact Andrew Logan, Principal (021 222 4646 / email@example.com) or Matthew Hastings, Solicitor (03 343 8582 / firstname.lastname@example.org).