Thursday, May 09, 2013

Again, who should pay for political advocacy?

In an editorial not dissimilar to my post earlier in the week about who should fund political advocacy, the NZ Herald says, not taxpayers. There should be no rebates for donations for political advocacy and there is no need for a debate.

A problem remains and I've commented to this effect.

What would you do then about an organisation like the Salvation Army, which does charitable work by your definition but also a good deal of political advocacy?

The issue is not as clear-cut as the writer would have us believe.


Bob said...

If Family First and Sensible Sentencing have to go, so too should the 'darlings' of the left - Action For Children And Youth Aotearoa, Amnesty International New Zealand Inc, Caritas Aotearoa - New Zealand, Child Poverty Action Group, EPOCH, Te Kahui Mana Ririki, UNICEF, Human Rights Foundation Of Aotearoa New Zealand, Humanist Society of NZ, Agender Christchurch Inc, QSA Network Aotearoa, Waikato Queer Youth, Rainbow Youth Incorporated, Save Animals From Exploitation (S.A.F.E.), The Vegan Society of Aotearoa, NZ Aids Foundation

JC said...

Take a reasonably small charity with "revenue" of $100,000 that looks after sick people, ie arthritis, MS, Epilepsy etc.

The revenue comes from donations, some from Govt which requires the organisation to sign a contract to use the money for "Support and *Advocacy*", local authorities (same sort of contract), the general public, donations, cake stalls and bequests.

The organisation has two part time field workers and an office administration/fund raiser.. these people are paid and their total costs amount to $80,000. The other $20,000 goes in disbursements.. office rent, phone, office equipment, cars and the actual costs incurred by the 10-20 volunteers who run the organisation.

Here's the thing.. the $80,000 paid to the employees of the organisation are taxed at 17%.

So 20% of the revenue goes in stuff that would be used to reduce tax in a normal company anyway and the other 80% wages is taxed in the normal way as well.

Several other points:

1. There is no "profit" in a charity.. only a surplus that must be used for the benefit of the people who are sick or have a disease.

2. Govt and local authorities may give a grant but you sign a contract to use the money for "information and advocacy" so there is already an implication that some of the money will be used to advocate not only on behalf of individuals but also for the whole group of individuals.

3. When a charity applies for funds from Govt, Local Authorities, Pub Charities, businesses etc its usually a requirement that you present your last year's accounts so the prospective funder can see how you used the donations of the previous year.. so the Pub Charity will look for an item that says "Pub Charity, donation $5000, spent $2000 on Field Worker, $2000 on office costs, $1000 on vehicle costs, $zero funds remaining.
Because thats the other thing.. the funder expects you to spend *all* his money on the items which you applied for.. he doesn't want you have surplus funds.

Finally, most charities do discreet political advocacy, some are overtly political and a line has been crossed.