Lessons on Political Activity – From New Zealand
By: Adam Aptowitzer
Over the past few years the charity sector has become used to Federal budget announcements designed to put increased restrictions on its operations. Budget 2012 was exceptional only in that it provided an additional $ 8 million over two years to ensure compliance with these restrictions – in a year in which new spending was otherwise minimized. The budget made it clear that these funds were to be used primarily to enforce the rules surrounding political involvement. In our practice, we are starting to see the results of this additional budgetary room with reports from our clients of detailed audits into their ‘political’ activities beginning to take place.
An interesting comparison with the Canadian approach to charities engaged in political activities arises from a case recently decided in New Zealand dealing with the well-known Greenpeace organization. Due to recent changes in the New Zealand charity system Greenpeace was required to re-register for charitable status. This gave the Charities Commission occasion to review the grounds upon which Greenpeace was originally registered in the first place.
Despite those changes, the court found that the 400 year old case law giving legal meaning to the term charity in Canada was generally applicable in the Greenpeace case. In conducting its review the Court found that one of Greenpeace’s objects was political in nature and so conducted both a quantitative and qualitative analysis to determine if the object was incidental to the organization’s charitable ones.
Measuring an organization’s involvement in political activities is necessarily difficult and there the Court held that “..it is the way in which the philosophy is championed that must be measured against the relevant charitable purpose to determine whether, as a matter of degree, it is merely ancillary.” This is opposed to simply measuring the number of pages in a book or pages on a website to determine how much of a charity’s resources are dedicated to political activity.
This analysis compares quite favourably to Canadian law which simply states that charities cannot use more than 10% of their resources for political activity; a test which is almost impossible to measure when ‘resources’ such as volunteer hours are taken into account.
Similarly, the qualitative analysis the court undertakes is quite interesting if for no other reason than it cites recent Australian law that there is a difference between “.the promotion of a particular point of view is different from the purpose of generating public debate”. We imagine this kind of reasoning will be popular with charities here, even if it is untested here at home.
The new focus on compliance for charities involved in political activities will focus the sector, the CRA and Parliament on the law involving charity involvement in the political system. And it may be that the restrictions placed on charities in the 1800’s will be judged inadequate for charities in the 21st century. Unfortunately, this is a determination made by Parliament and in the meantime it is far more likely that many of Canada’s charities will be making arguments similar to those made by Greenpeace – hopefully with more success.
 The High Court of New Zealand’s decision is available at http://www.nzlii.org/nz/cases/NZHC/2011/77.pdf