Charity Law and the NFP Reforms - Australian Council of Social

Australian CouncilAustralian
of Social Council
Service of Social Service
Charity Law and the NFP Reforms
Dr Tessa Boyd-Caine, Deputy CEO, ACOSS
ACOSS Charity Law Briefing
Sydney, 10 August 2012
Supported by NAB
Australian Council of Social Service
Principles to define a charity,
Charity Definition Inquiry 2001
That the term `not-for-profit' be adopted in place of the term `non-profit'
for the purposes of defining a charity.
That a charity must have a dominant purpose or purposes that are
charitable, altruistic and for the public benefit.
That the public benefit test continue; that is, to be of public benefit a
purpose must:
be aimed at achieving a universal or common good;
have practical utility; and
be directed to the benefit of the general community or a `sufficient section of the
That the public benefit test be strengthened by requiring that the
dominant purpose of a charitable entity must be altruistic.
Australian Council of Social Service
CDI recommended charitable purposes as:
the advancement of health, which without limitation includes the prevention and relief of sickness,
disease or of human suffering;
the advancement of education;
the advancement of social and community welfare, which without limitation includes:
the prevention and relief of poverty, distress or disadvantage of individuals or families;
the care, support and protection of the aged and people with a disability;
the care, support and protection of children and young people;
the promotion of community development to enhance social and economic participation; and
the care and support of members or former members of the armed forces and the civil defence forces and
their families;
the advancement of religion;
the advancement of culture, which without limitation includes:
the promotion and fostering of culture; and
the care, preservation and protection of the Australian heritage;
the advancement of the natural environment; and
other purposes beneficial to the community, which without limitation include:
the promotion and protection of civil and human rights; and
the prevention and relief of suffering of animals.
(Advancement is taken to include protection, maintenance, support, research, improvement or enhancement.)
Australian Council of Social Service
Current status of definition reform
Treasury released a discussion paper in November 2011.
Key issue from ACOSS perspective remains protecting advocacy as
legitimate charitable activity, in line with Aid/Watch decision.
The argument for a legislative basis is to enshrine the legitimacy of advocacy
and to ensure that advocacy organisations are able to access the tax
concessions that show society’s support for this charitable purpose. Without
a strong framework legitimising advocacy within charitable purpose we
undermine. the viability of advocacy organisations and reduce their access to
non-government sources of funding, particularly philanthropic.
Joint COSS submission on Treasury discussion paper, Nov 2011:
Modernised definition scheduled for introduction by 1 July 2013.
Australian Council of Social Service
New approach to public benefit?
Consideration of new approach to the public benefit test: attracted different
views across the sector. COSSes argued for CDI 2001 recommendation, and
that the presumption of public benefit should remain as is until the ACNC is
established and operational to explore the potential of removing the
presumption of public benefit if necessary.
The most important recommendation from the 2001 Inquiry was not the statutory definition of
charity itself; it was the proposed reform of Public Benevolent Institution (PBI) status as that
subset of charities whose main purpose was to assist the most disadvantaged in the community,
regardless of whether this was via direct service provision. From a taxation standpoint, PBI
status is much more important than charitable status alone, as it includes gift deductibility.
Ironically, although this was first established with 'traditional charities' in mind, the scope of gift
deductibility in the community and social services sector has lagged behind developments
elsewhere, such as environmental organisations .
(Joint COSS submission on Treasury consultation paper, ‘A definition of charity’, Jan 2012)
Australian Council of Social Service
Right to housing
• CDI 2001 recommended reforms to ensure consistent
treatment of charitable activities of child care and
• Child care has been legislated for.
• Housing remains without recognition as legitimate
charitable activity.
o Key issue is capacity to attain tax concessions and
consistency of application of those tax concessions. Likely to
be contested issue in this reform, particularly as policy
directions no longer seem to be grounded in the CDI report.
Australian Council of Social Service
Outstanding questions
• What appetite for another significant reform?
• Is it enough to codify common law definition as
currently stands, ie on basis of AidWatch case
and other principles as outlined?
• How do we ensure that the support provided to
charitable institutions, including through tax
concessions, flows fairly across the sector?
Australian Council of Social Service
Thank you
• [email protected]
• For more information, visit ACOSS sector
development materials at,
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