Greenpeace gets in trouble

Seeing Greenpeace Specifically, [charity watchdog group] PIW accuses Washington-based Greenpeace of shifting tax-deductible donations from Greenpeace Fund — its reputedly educational, public-interest-oriented 501(c)(3) — to Greenpeace, Inc., a more directly political and activist unit. As such, the Internal Revenue Code designates the latter as a 501 (c)(4). "Greenpeace has devised a system for diverting tax-exempt funds and using them for non-exempt — and oftentimes illegal — purposes," Hardiman said in unveiling the grievance. "It's a form of money laundering, plain and simple." ... If Greenpeace runs afoul of tax authorities, it will not be the first time. Revenue Canada withdrew the tax-free status of the Greenpeace Environmental Foundation in 1989. The Canadian federal tax unit ruled that tax-exempt organizations there had to provide some public benefit, and that Greenpeace did not. "I do not think it can be assumed that remedying any and all forms of pollution always conveys a public benefit," wrote Carl Juneau, assistant director of the charities division, according to Stewart Bell's account in the June 5, 1999 National Post [story here]. "At the least, the possibility of countervailing detriment to the public has to be entertained and competing interests weighed. For example, closing down a polluting mill may make for a cleaner town and a healthier population, but it may also propel that population into poverty."

If PIW's charges are correct, Greenpeace seems to be in trouble. But it's a different kind of trouble than the trouble that they apparently encountered in Canada. The US challenge is based on the idea that money taken in by the non-profit arm of the organization was used for political activity, which is not allowed to be tax-exempt. The Canada challenge appears to have been based on a judgement that Greenpeace's activity was not beneficial to the public. The political versus nonpolitical activity distinction, while slippery and questionable, seems on the whole more neutral and less subjective than the benefits society versus doesn't benefit society distinction.

Perhaps it's just my ignorance of Canadian law, I'm a bit disconcerted by the idea that the government can revoke a charity's status based on whether it was benefitting the public. It seems like that's a determination that the charity's funders ought to be making, and enforcing according to whether they donate money or not. I'm a bit skeptical myself of whether Greenpeace's activities, on the whole, are beneficial to the public (it's a milder version of my complaint against direct-action tactics in the case of ELF). At best, the government can step in when an organization actively harms society in a substantial way -- that is, when it commits a crime. But civil society should have wide latitude to pursue different ideas of what benefits society.

On the other hand, preventing an organization from moving money about from fund to fund is necessary to make that private vote of dollars work. If I were to contribute money to Greenpeace's education fund, believing that those activities were beneficial to society, I'd be a bit upset if they were using that money to fund direct action that I see as detrimental to society.