Over-reaction to the Greenpeace Supreme Court decision (or Would the Taxpayers’ Union please shut up)

Following the passing of the Charities Act 2005, the Charities Commission began declaring war on charities that had a political purpose that was more than “ancillary”. Essentially, political advocacy was deemed to be beyond the pale, and groups like Greenpeace found themselves deregistered.

It was all the fault of s 5(3) of the Act, which reads:

To avoid doubt, if the purposes of a trust, society, or an institution include a non-charitable purpose (for example, advocacy) that is merely ancillary to a charitable purpose of the trust, society, or institution, the presence of that non-charitable purpose does not prevent the trustees of the trust, the society, or the institution from qualifying for registration as a charitable entity.

The Charities Commission saw s 5(3) as providing a political purpose exclusion – that if a political purpose was more than ancillary to the charitable purpose, the charity could not be registered.

Well, Greenpeace has spent years working its way through the Courts, and the Supreme Court has now ruled that s 5(3) does not enact a political purpose exclusion. (A copy of the judgment is attached here.) In effect, it’s a common sense decision by the Court that s 5(3) does exactly what it says – it clarifies that if a political purpose is merely ancillary to the charitable purpose, the political purpose is not a bar to registration.

Some of the commentary on the Supreme Court’s decision has been a little hysterical. For instance, the Taxpayers’ Union put out this press release:

“If they are we are,” says Jordan Williams, Executive Director of the Taxpayers’ Union, responding to the Supreme Court’s bold decision to allow political advocacy to be considered charitable, if the underlying purpose is of benefit to the wider public.

“This is a significant decision. Not only is Greenpeace and the Taxpayers’ Union now likely to be considered charitable, I wonder if even some political parties could fit the criteria by making their underlying objects charitable.”

“Arguably this is the most significant tax cut this election year, and it has come from the Supreme Court rather than Parliament.”

“All parties would claim they want to relieve poverty, some by sound policy, others by taking from Peter to pay Paul. We’ll wait for close legal analysis to know whether the Supreme Court has left it open only to left wing political causes to claim the tax benefits of being a charity.”

One gets the feeling that Mr Williams hasn’t actually read the judgment. After all, the Supreme Court exhaustively analyses whether simply promoting an idea can be considered charitable, and in the ‘Conclusion’ section of the judgment, the Court states:

[114] Since charity is generally concerned with matters of tangible public utility, it will be difficult to show that the promotion of an idea is itself charitable. But “charitable” and “political” purposes are not mutually exclusive if the political purpose is itself charitable because of public benefit within the sense the law regards as charitable. A “political purpose exclusion” as a matter of law is not necessary.

[115] Section 5(3) of the Charities Act does not enact a political purpose exclusion, codifying the common law. It provides that non-charitable purposes do not affect charitable status if no more than ancillary and includes “advocacy” as an example of such ancillary non-charitable purpose. It does not deal with the case where promotion of views is properly regarded as charitable in itself. Such cases are likely to be unusual.

[116] If the object of an entity is the promotion of a cause which cannot be assessed as charitable because attainment of the end promoted or the means of promotion in itself cannot be said to be of public benefit within the sense treated as charitable, the entity will not qualify for registration as charitable. That is because it will not be “established and maintained exclusively for charitable purposes”. Even if an end in itself may be seen as of general public benefit (such as the promotion of peace) the means of promotion may entail a particular point of view which cannot be said to be of public benefit.

The Supreme Court is not declaring open season on the ability for political lobby groups to register as charities. In fact, the Court is specifically stating that lobby groups (such as the Taxpayers’ Union) would generally find it extremely difficult to show that they meet the charitable purpose test, pursuant to the Act. Obviously Jordan Williams and the Taxpayers’ Union prefer not to let the facts get in the way of a good press release…


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