Did you know Greenpeace fought the Charitable Registration Board for 12 years to be able to register as a charity? 12 whole years of legal fees. They only just got the OK in August 2020, but not before the case was bounced between the Charities Registration Board, the High Court (twice), the Court of Appeal and the Supreme Court.
It all boiled down to whether protecting the environment is a public good worthy of being considered a charitable purpose. To us, it seems obvious that it should be.
In our case, we don't have the kind of resources to be dragged through the courts for years. So we want to be upfront with our supporters - we are a nonprofit but we are not a registered charity.
How is Co-Benefits structured?
We are a company with a charitable constitution.
We registered as a company on the Companies Register, but have been established and must operate as a charity. This type of structure goes further than the concept of a ‘social enterprise’, something you may have heard about before. Our constitution strictly binds us to:
- Operate only to further our mission, which is to encourage and empower New Zealanders to reduce global greenhouse gas emissions.
- Use 100% of the profits to further the mission.
- Not distribute any income to our members other than to pay for any expenses/goods/services provided for the company to further the mission.
- Regularly report with full transparency.
So why isn’t Co-Benefits a charity?
1. We don’t strictly fit with what the Charities Act 2005 (the Act) considers to be a ‘charitable purpose’.
To be covered by the Act and considered a charity, an organisation needs to meet one of four very outdated and specific purposes. These are the relief of poverty, the advancement of education, the advancement of religion, and other purposes beneficial to the community. Purposes like addressing the pandemic risk, human rights violations, gender inequality, animal rights and climate change, aren’t expressly considered charitable - which we think is crazy in 2020.
That being said, this is where Greenpeace New Zealand has paved the way. In the ruling, the High Court decided that ‘environmental protection is a charitable purpose’. So watch this space.
2. We send our donations overseas.
To be a charity under the Act, the purpose of the charity needs to focus predominantly in New Zealand.
Unfortunately for us, we send 100% of our donations overseas to fund low carbon projects in low-income countries. The atmosphere and our emissions problem are truly global. The climate doesn’t care if we act to reduce emissions within New Zealand, or whether we do so in another part of the world. It just happens to be more cost-efficient to reduce a tonne of emissions overseas plus, we can have a vast socio-economic impact over and above the reduction of emissions if we act in parts of the world vulnerable to the effects of climate change.
Even though Co-Benefit’s isn’t a charity, why can’t I get my tax back on my donations?
Tax-exempt or donee status applies to charities and businesses with charitable constitutions (such as ours) who can apply for a special exemption.
The problem is, the exemption only applies to business income used within New Zealand for charitable purposes. Any income used for charitable purposes overseas is taxed. As we spend 100% of our income overseas, even if we did obtain a tax exemption, there wouldn’t be any income to claim it on. So we’re sorry, but you won’t be able to get your tax back on any of your donations to us this year, but don’t worry, we’re working on it.