Last updated 9 September 2022
In this Insight, we explore whether a vital advocacy role prevents a Charity from benefiting from Public Benevolent Institution (PBI) status.
The case of Global Citizen Ltd and Commissioner of the Australian Charities and Not-for-profits Commission [2021] AATA 3313 in the Administrative Appeals Tribunal on 17 September 2021 dealt with whether a vital advocacy role prevented a Charity from benefiting from Public Benevolent Institution (PBI) status.
This case concerned an appeal of a decision made by the ACNC.
The Charity was already registered under the sub-type of “advancing education” but wanted the ACNC to accept their application for PBI status.
The Commissioner had rejected that application, finding the Charity (“GCL”) had an independent purpose of education or advocacy, which prevented it from being a PBI, bringing light to this appeal.
Common benevolent purpose and how it affects a charity’s advocacy
However, the Tribunal found [at paragraph 98] “GCL has only one purpose – the relief of global poverty – and that it engages in educational and advocacy activities to achieve that purpose.”[1]
The question then turned on whether the Charity ‘organised for’, or ‘conducted for’ or ‘promotes’ poverty relief.
Referring to Hunger Project Case[2] and Australian Council for Overseas Aid[3], the Tribunal noted [at paragraph 113]
These two cases are clear authority for the proposition that relief can be provided by a PBI indirectly. In both cases it was accepted others would provide the relief, although few details are provided of how that would occur. However, the cases do not suggest it is necessary to require proof of the link between the activities of the entity and the provision of relief. Nor are the cases prescriptive about the relationship between the relevant entities. In the Australian Council for Overseas Aid case, the entity was the coordinating entity for its members and in The Hunger Project case the entity was a member of a global organisation, based in the United States. In The Hunger Project case, the Court spoke of an entity conducting ‘itself in a public way towards those in need of benevolence however that exercise of benevolence may be manifested’ and in Australian Council for Overseas Aid, Connor ACJ said the relationship between the parties should be one that shows they have ‘a common benevolent purpose.’
In applying this law to these facts, the Tribunal looked to the Charity’s governing documents and its activities. Citing the Hunger Project Case, the Tribunal also considered reports and statements from partner organisations that tracked the impact of aid they delivered from the applicant’s funding.
The Tribunal found those reports alone weren’t conclusive and that correspondence between the organisations was most helpful in revealing their common benevolent purpose [at paragraphs 124, 126].
On the question of political advocacy, the Tribunal noted [at paragraph 125]:
One of the issues raised in the case was whether advocating for changes in government policy (e.g., concerning levels of aid or legislative change relating to gender discrimination) would be concrete enough to amount to relieving poverty. We do not need to decide this matter because it is clear the activities of GCL go beyond mere advocacy for policy change. The activities of GCL in seeking specific financial commitments from government and philanthropists to particular projects is sufficient to satisfy this nexus. We should add there is nothing unusual in this for charities: as Rev Tim Costello and Paul Ronalds, CEO of Save the Children (Australia), said in their evidence that advocacy and awareness-raising are becoming increasingly important tools in their efforts to address issues of poverty.
The Tribunal’s findings: How charities might be excluded from advocacy
Still, the Tribunal’s decision showed it had rejected the Commissioner’s argument that education/or advocacy should be treated as an independent purpose, or overriding purpose, even where it contributes to a Charity’s benevolent purpose.
Further, the Tribunal provided obiter comments which appear to be directed to the legislature [at paragraph 128]:
We acknowledge our decision on the law – a decision which we have concluded is required by reference to the state of the authorities – raises potentially important and difficult questions of public policy. The evidence clearly established that most large PBIs engage with the political process as a regular and indispensable part of their work because governments are invariably key players in delivering the relief that is sought. Once that reality is accepted, there is potentially a blurring of the distinction between a PBI that participates in the political process as part of its activities in providing benevolent relief and an entity that is pursuing political outcomes for their own sake. If the line needs to be more clearly defined, there may be a need for the Parliament to refine the definition of ‘public benevolent institution’ in the legislation. As we have explained, the expression was itself introduced to narrow the range of organisations that were entitled to the valuable concessions in question after court decisions made nearly a century ago.
Here, the Tribunal indicates that while the common law is quite straightforward in determining benevolent purpose, if government or regulators intend to discourage or exclude Charities that engage in advocacy, they may well have to pursue that change openly and deliberately through legislation.
What is the importance of being registered as a public benevolent institution (PBI)? You can read more about this is on our earlier insights:
Public Benevolent Institutions: When is a charity benevolent? | Birchgrove Legal
What is the “Benevolence” in a Public Benevolent Institution? | Birchgrove Legal
If you are unsure about whether or not your organisation is appropriately characterised as a Public Benevolent Institution (PBI), or if any questions arise from this case, please get in touch for a confidential discussion with Birchgrove Legal NFP Team today on (02) 9018 1067.
[1] Global Citizen Ltd and Commissioner of the Australian Charities and Not-for-profits Commission [2021] AATA 3313
[2] Commissioner of Taxation v The Hunger Project Australia [2014] FCAFC 69; (2014) 221 FCR 302
[3] Australian Council for Overseas Aid v Federal Commissioner of Taxation 1980) 33 ACTR 496
