Treasury has released for comment a draft Charities Bill 2013 which will introduce a statutory definition of “charity”, applicable across all Commonwealth laws for the first time.
The definition is:
charity means an entity:
(a) that is a not-for-profit entity; and
(b) all of the purposes of which are:
(i) charitable purposes (see Part 3) that are for the public benefit (see Division 2 of this Part); or
(ii) purposes that are incidental or ancillary to, and in furtherance or in aid of, purposes of the entity covered by subparagraph (i); and
Note 1: In determining the purposes of the entity, have regard to the entity’s governing rules, its activities and any other relevant matter.
Note 2: The requirement in subparagraph (b)(i) that a purpose be for the public benefit does not apply to certain entities (see section 9).
(c) none of the purposes of which are disqualifying purposes (see Division 3) ; and
(d) that is not an individual, a political party or a government entity.
The definition will apply from 1 January 2014.
As a result of the introduction of a definition of charity and charitable purpose in the Charities Bill 2013, a number of consequential amendments to Commonwealth legislation and transitional arrangements are required. These are set out in the draft Charities (Consequential Amendments and Transitional Provisions) Bill 2013.
An entity must be not-for-profit and have only charitable purposes that are for the public benefit. An entity may have incidental or ancillary purposes that further or aid the charitable purpose.
An entity must have only charitable purposes and must not have an independent, non-charitable purpose.
An entity may have incidental or ancillary purposes that may be noncharitable when viewed in isolation but which aid or further the charitable purpose.
The purposes of relieving poverty, illness and the needs of the aged, advancing education and advancing religion are presumed as being for the public benefit, not just presumed as beneficial, unless there is evidence to the contrary.
An entity that directs benefits to related individuals generally fails the public benefit test unless the relationship is incidental to the common characteristic which the charitable purpose addresses.
The public benefit test does not apply to open and non-discriminatory selfhelp groups and closed or contemplative religious orders.
A purpose of engaging in, or promoting, activities which are unlawful or contrary to public policy is disqualifying.
A purpose of promoting or opposing a political party or candidate is disqualifying.
Categories of charitable purposes are:
• advancing health;
• advancing education;
• advancing social or public welfare (including relief of poverty);
• advancing religion;
• advancing culture;
• promoting reconciliation, mutual respect and tolerance between groups of individuals in Australia;
• promoting or protecting human rights;
• protecting the safety of the general public;
• preventing or relieving the suffering of animals;
• advancing the natural environment;
• any other purpose beneficial to the general public that may be reasonably regarded as analogous to, or within the spirit of the above purposes;
• promoting or opposing a change to any matter established by law, policy or practice in the Commonwealth, a State , a Territory or another country, in furtherance or protection of one of more of the above purposes.
In addition, charitable purposes include caring for and protecting young people and providing child care services.