OPINION: When I was young, I was taught that charity was a good thing. My old clothes would be thrown into bins for children in Africa. I still feel sorry for the poor kid in Gambia or Togo who had to wear my awful purple nylon polo-neck skivvies, fawn flared slacks with a built-in elastic belt, and embroidered kaftans. But at least we knew what a charity was.
Today things are a little more confusing. Though the legislation covering charities is based on principles stretching back more than 400 years, some charities are occasionally deemed “non- charitable” by Charity Services, part of the Department of Internal Affairs, because they are seen as engaging in advocacy more than operating in the public good.
That is why Greenpeace and the Sensible Sentencing Trust are not registered charities. You may, like me, think that the National Council of Women is an excellent organisation that works in the public interest, yet until recently it did not qualify as a registered charity. But does it really matter if an organisation is registered or not?
It does when it comes to tax, as registered charities enjoy tax-free status. That’s why multi-million dollar organisations as diverse as Sanitarium Foods, the Anglican Church, and the Ngai Tahu trust don’t pay tax on their “charitable” activities. But if Charity Services decides that an organisation like Greenpeace spends most of its money on advocacy rather than charity then it doesn’t get the tax break.
I can see the logic in deregistering charities that are too political. You think you’re giving money to help the poor and you discover it is being spent on political campaigns that you may not agree with.
Then there’s the “costs” of running charities. A recent government investigation into the Wellington Foodbank Service alleged that it spent only 4 per cent of its donated income on the needy, yet the other 96 per cent included junk food, alcohol and movie tickets, not to mention commission payments to its “fundraiser”.
But should legitimate organisations like the Wellington City Mission, which deals with poverty daily, have the right to comment on political issues – for example, when John Key says people who use foodbanks have made “poor choices”? I think they should, and so does Charity Services, provided advocacy is not the charity’s sole purpose.
But what about organisations like the ‘New Zealand Health Trust’. Apparently it wants to promote education and well-being, relieve poverty and promote “other charitable objectives”. This qualifies it for tax-free status.
Yet according to scientist and pro-fluoride blogger Ken Perrott, the New Zealand Health Trust is a political lobbying organisation funded substantially by the natural health-care product industry. Last November, through their organisation New Health New Zealand, they took expensive High Court action against the South Taranaki District Council over the council’s decision to fluoridate water supplies.
I thought charity was meant to begin at home, not in the High Court. Though I’m no fan of the anti-fluoride lobby, they should be allowed to have their say. But should their say be tax-free? I find it incredible that the New Zealand Health Trust is a registered charity yet the National Council of Women struggled to qualify.
A charitable trust is also a good way to avoid debt. Climate change deniers the New Zealand Climate Science Education Trust recently took the National Institute for Water and Atmospheric Research (Niwa) to court, claiming Niwa had misinterpreted data. The case was thrown out and the Climate Science Education Trust was made to pay Niwa’s costs. But it is a charitable trust, so has been liquidated, as it couldn’t pay its debt. So who will pay NIWA’s more than $100,000 in costs? The taxpayer. I look forward to the newly formed Taxpayers’ Union getting their teeth into that one.
There are many excellent charities in this country that, aware that government has abdicated its responsibility for the poor in some areas, have stepped in. But as for some of the others – you may have had the experience of being accosted by a vagrant who asks for money for “food” yet spends it on alcohol. I’m not sure that some of our charities are very different. And at least the vagrants pay tax on the alcohol they buy.
Story by Dave Armstrong. 20 January 2013
Fairfax NZ News