August 2014. . .If you are contemplating registering an organisation as a charity you should give careful consideration to your organisation’s main purposes. These purposes should be:
Two recent examples illustrate just why this is so important.
For some organisations the most significant hurdle in obtaining charitable status is proving to the Charities Registration Board (“the Board”) that they have a charitable purpose.
Four key themes are recognised as being charitable. These are:
Within each subset the Courts have carved out rules and limitations on what might qualify. Consequently, this has become a complex area of the law.
Example 1: The Foundation for Anti-Aging Research (“FAAR”)
FAAR’s research focusses on cryopreservation and reanimation of human bodies. In layman’s terms this means freezing bodies in the hope that science might bring them back to life in the future.
The Board decided that FAAR’s area of research lacked sufficient academic credibility and was too speculative to have an educative purpose. As to whether there was a broader benefit to the community, the Board decided that the cost of cryopreservation (upwards of $150,000 for whole body preservation) was sufficiently expensive that such a service would be narrowly available and essentially private. FAAR is appealing this decision.
Example 2: Greenpeace
Greenpeace’s application for registration was declined on the basis that its key purposes were viewed as political and therefore not charitable. Greenpeace appealed this decision and the Supreme Court has recently departed from existing case law and decided that a political purpose is not automatically excluded from being a charitable purpose. This case marks a significant development in charities law and a win for Greenpeace.
However, this is not the end of the road for Greenpeace. The matter has been referred back to the Board for consideration in light of the Supreme Court’s finding that political purpose and charitable purpose are not mutually exclusive. The challenge for Greenpeace will be two fold: