New definition of “charity”

The Government has issued a Consultation Paper – A Definition of Charity as part of its proposal to introduce a single national statutory definition of charity, applicable across all Commonwealth laws from 1 July 2013.

The proposed core definition being discussed contains the following broad elements that an entity must meet to be a charity:
• the entity must be a not-for-profit entity;
• it has a dominant purpose that is charitable;
• it is for the public benefit;
• it does not engage in activities that do not further, or are not in aid of, its dominant purpose;
• it does not have a disqualifying purpose;
• it does not engage in, and has not engaged in, conduct that constitutes a serious offence; and
• is not an individual, partnership, a political party, a superannuation fund or a government body.

The Government is seeking the views of charities and other stakeholders on a definition of charity and charitable purposes. The consultation builds on a range of previous inquiries including the 2001 Report of the Inquiry into the Definition of Charities and Related Organisations, the Charities Bill 2003 and recent court decisions including the High Court’s decision in Aid/Watch Incorporated v the Commissioner of Taxation.

Submissions are due by 9 December 2011.

Introduction of draft legislation into Parliament is expected in mid-2012 with the definition to come into effect on 1 July 2013.

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