By Andrew Egri, Lawyer
The 2016 Federal election again brought attention to the issue of political lobbying.
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.
The Aid/Watch case – background
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.
Charities Act – the current approach
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:
- whether the focus of the organisation is on promoting or opposing a particular candidate or a political party in general, rather than on their policies that are relevant to the charitable purpose;
- the direct nature and extent of engagement and association with a candidate’s or a party’s campaigns or publications; and
- lack of balance in promoting or opposing the policies of another political party or candidate with similar policies relevant to the charitable purpose.
What is not allowed
- Political parties are not charitable and a purpose of promoting or opposing a political party or a candidate for political office is not a charitable purpose.
- A charity must not have a purpose to engage in or promote activities that are contrary to public policy (which, in this context, means the rule of law, the constitutional system, the safety of the public or national security).
- Directly funding a political party is prohibited under the Commonwealth Electoral Act 1918 (Cth). In addition, the electoral law contains rules about activities that could be seen as election-related campaigning by organisations, including charities. Party political activities could put charities in conflict with, or allow them to circumvent, the strict regulation of political parties, elections, and funding and disclosure requirements and limitations.
What is allowed
- The Act notes that a purpose of promoting or opposing a change to any matters established by law, policy or practice in the Commonwealth, a State or Territory or another country may be a charitable purpose in certain circumstances.
- The Act does not prevent organisations from distributing information, critiquing or comparing policies in order to further the achievement of their charitable purpose. Charities may engage with candidates or representatives of political parties to lobby, debate or seek explanation of their policies relevant to their purposes. They may also assess and critique their policies.
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