Partisan Promotions Rule out Charitable Status

In re Draco Foundation (NZ) Charitable Trust (2011) 25 NZTC 20-032

The High Court refused an application by this foundation to be registered as a charitable entity. The Foundation argued that its primary objectives were charitable, being in pursuit of education and objects generally beneficial to the community. The Court held that its functions seemed to be the running of two websites and the organisation of conferences from which it appeared that partisan material was being promoted in a way that could not be considered to be ancillary to charitable objects.

Points to draw from the decision include:

1. The existence of activities which were clearly not charitable made it essential that the Foundation be able to establish that they were undertaken in support of charitable activities and that connection could not be made. Establishing the connection between ancillary non charitable objects and charitable objects is essential to success.

2. Material provided to show support of education was too vague and generalised to allow a conclusion to be made that it was to advance education or was otherwise beneficial to the community. The requirements for an educational charitable objective require specific application to learning often in a systematic or structured way.

3. Research work will not automatically be regarded as supporting education if it is simply made available for people to access if they wish to. This may be a problematic finding because the product of research is often simply published and research directed objects are often charitable.

4. The Court marked out a difference between the charities position in NZ and Australia concerning political objectives. It was required to follow long standing authority in Bowman v Secular Security Limited [1917] AC 406 which excluded political objectives form being charitable under NZ law even though the High Court of Australia had recently noted that no absolute exclusion existed under its laws.

© G D Clews  2011   

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