ACNC Moves on Single Charity Definition

The Australian Charities and Not-for-profits Commission has proposed a new model to deliver a single definition of charity across all states and jurisdictions in Australia.

The ACNC has prepared a discussion paper on the implications of moving to a new model of a single charity definition in which it would take on the role of determining an organisation’s charitable status.

ACNC assistant commissioner David Locke said the new model of regulation would have significant benefits to the charity sector.

“At present there is no single definition of charity across Australia. In addition to the common law definitions, the terms ‘charity’, ‘charitable purpose’ and ‘charitable status’ occur in 172 pieces of Commonwealth, state and territory legislation, of these acts, 45 of them define these terms,” Locke said.

“Numerous inquiries and reviews have advocated for the harmonisation of charity regulation across Australia, based principally on the need to reduce the regulatory burden on charities, particularly for those that operate across state jurisdictions. One of the harmonisation strategies recommended, has been for all jurisdictions to adopt a common charity definition.”

He said the paper put forward a particular focus on the state revenue environment and suggested that the definition of charity be considered separately to any entitlement to concessions.

“It is posited that the first stage in revenue assessment is the determination of charitable status, and that the second stage is determining the particular tax benefits which accrue to particular types of charities,” Locke said.

“It is proposed that the first stage, the charity determination, be conducted by a central regulator using a common statutory definition of charity applicable in all Australian jurisdictions. The second stage, the tax assessment, will remain the province of the states.”

Locke said that under the proposed model, charities would remain eligible for Commonwealth benefits under the existing arrangements.

The paper also explores the revenue environment in each state in order to understand the breadth of complexity in having multiple definitions and applications.

“Whilst the model proposed will not address all complexities, it is argued that its implementation will have significant benefits for Australian charities, the wider community and also for all relevant local, state, territory and federal government agencies engaged in any form of charity regulation,” Locke said

He said the the recommendation for a new model also had legislative, revenue and constitutional implications and that further engagement with the state governments and regulators, as well as the sector, was required to test and refine the application of this model.

David Locke will present the discussion paper the Charity Law Association conference at the University of Melbourne on Friday 26 August.