By Andrew Egri, Lawyer
The Australian Charities and Not-for-profits Commission (ACNC) acknowledges the difficulty in applying this area of the law to all charities. In an attempt to assist charities navigate this complex area during the course of the election campaign, the ACNC publicised the need for charities to be wary of the public’s perception that they are promoting a particular candidate or party.
Ahead of the election, the ACNC Commissioner said that “in the lead up to an election there are increased risks that, in the minds of the public, charity advocacy or campaigning can be associated with a particular party.”
Traditionally, there has been a division between politics and charity. Over many years, the Courts found that gifts for objectives achievable only through legislative action are not charitable. Courts have denied charitable status to gifts to the Conservative Party, the Communist Party and for education in accordance with Labor Party policy.
However, the division between politics and charity underwent a significant shift as a result of a High Court decision in 2010. Aid/Watch Incorporated (Aid/Watch) is an organisation concerned with promoting the effectiveness of aid provided in foreign countries. Aid/Watch also campaigns for changes to the way in which aid is delivered through media releases and public events, which are designed to influence the relevant agencies to alter the way aid programs are administered. The Commissioner of Taxation revoked the charitable status of Aid/Watch on the grounds that its activities were primarily political in nature.
The High Court held that there is no general doctrine in Australia which excludes from charitable purposes “political objects”. Without commenting on when a political object will exclude an organisation from being a charitable institution, the High Court overruled previous decisions that a charity with political purposes will never be a charitable trust or a charitable institution. In particular, the generation by lawful means of public debate about the efficiency of foreign aid directed toward the relief of poverty was a charitable purpose beneficial to the community.
The Charities Act 2013 (Cth) (Act) provides a definition of charitable purposes and reflects the position of the High Court in Aid/Watch regarding the political activities of charities.
Section 12(1)(l) of the Act includes “the purpose of promoting or opposing a change to any matter established by law, policy or practice in the Commonwealth, a State, a Territory or another country” as a charitable purpose where that change is related to one or more of the other charitable purposes listed in section 12(1).
As well as providing a definition of “charity”, the Act also outlines what purposes are not charitable. Reflecting the longstanding position in Australia, section 11 provides that the purpose of promoting or opposing a political party or a candidate for office is a “disqualifying purpose”. As its name suggests, a “disqualifying purpose” is any purpose held by an organisation which disqualifies that organisation from being a charity (even if the other purposes are charitable).
In determining whether an organisation has a purpose to promote or oppose a candidate or political party, considerations include: