Canada Leaves Greenpeace Red-Faced

It's official: Greenpeace Serves No Public Purpose.

No less a green haven than Canada just dealt the Dutch-based environmentalist group a massive blow to its credibility and fundraising efforts by denying it the charitable status it had sought for a decade.

Revenue Canada, the tax-collecting arm of the government, has refused to recognize the new Greenpeace Environmental Foundation as a charity, saying its activities have "no public benefit" and that lobbying to shut down industries could send people "into poverty."

By doing this, Revenue Canada has performed a useful service. Its decision has sent a strong signal to the world's green pressure groups that their tax and other benefits resulting from their status as "charities" deserves reconsideration. Canada is the first country to implicitly recognize Greenpeace as the most successful of the multinational anxiety corporations. Whether any EU country has the guts to follow Canada's lead, and strip Greenpeace of its charitable facade, is alas another matter.

Greenpeace was launched in Vancouver nearly 30 years ago with an anti-nuclear 'Don't Make A Wave" campaign and was registered as a charity in 1976. Since then it has grown into a multi-national, multi-million dollar operation devoted to promoting green causes around the world. But in 1989, Greenpeace lost its Canadian charitable status amid concerns that it was not a true charity-that is, that it was not providing a discernible benefit to the public. As such Greenpeace was no longer able to claim tax exemption on its revenues and donors could not claim deductions, which resulted in some donors switching to real charities that did give tax breaks.

The organization responded by setting up the Greenpeace Canada Charitable Foundation, legally (thought not really functionally) distinct from Greenpeace. But according to court records made public in June by John Duncan, the Reform MP from British Columbia, the federal charities division found the group's activities "have not complied with the law" on charitable organizations.

"This opinion resulted from an audit which raised serious concerns about the charity's compliance with the Income Tax Act. The audit revealed that the charity had failed to devote all its resources to charitable activities," Mr. Duncan said recently in a public statement. Of particular concern were the financial links between the Greenpeace International and Greenpeace Canada. Hundreds of thousands of dollars were transferred between the organizations, which may violate Canadian laws on charitable activities. Officials were also concerned because the charity appeared to be a fund-raising conduit for Greenpeace, which is not permitted in Canada.

Consequently, the second Greenpeace venture lost its charitable status in 1995. The group launched a court appeal, which was dismissed in September 1998. But by then a new charity called the Greenpeace Environmental Foundation had sprung forth like the regenerated head of a Hydra. Revenue Canada called the latest charity "a

convenient way to avoid the consequences" of its past troubled charities and declined to register the group. Greenpeace appealed against the decision but eventually threw in the towel.

Revenue Canada explains that preserving the environment is recognized as a charitable activity, but that the Greenpeace foundation does not qualify because its stated purpose is "public awareness." According to a spokesman from Revenue Canada this poses a problem since "we have no evidence that the distribution to the public of a pamphlet on, for example, the destruction of forests (along the Amazon or the B.C. coast) or on the various pollutants emanating from smokestacks has any measurable impact on the environment."

However it is widely believed that the decision against Greenpeace has more to do with its extensive lobbying against Canadian forestry exports, than Revenue Canada's 'Public Awareness' issue.

Without charitable status, Greenpeace cannot offer tax receipts to its donors. The Canadian Greenpeace Charitable Foundation is already running at a loss (over $250,000 in 1996-97 and slightly less last year), and non-tax exempt donations will be harder to come by in the future.

Greenpeace made light of the Canadian decision however. "I don't think Greenpeace is going to be made a charitable organization, and we seem to be doing okay without charitable status," said Peter Tabuns, Greenpeace's Canadian executive director. Mr. Tabuns can be sanguine about the decision since the financial dealings described by Revenue Canada suggest Greenpeace's Canadian operations are increasingly being funded from its much richer European operation. Greenpeace world-wide receives over two thirds of its funding from Germany and Holland, and Canada does not appear on Greenpeace's summary chart of donations (but it does appear on the expenditure chart in recent years). Therefore, Revenue Canada's decision will not cause a big cut in Greenpeace's global coffers.

Nevertheless, Canadians seem less inclined these days to go along with Greenpeace crusades. In an effort to curtail Canada's lucrative logging business, activists placed a giant sign for Home Depot, the United States-based hardware giant, in a recently