Charities Bill Passes Through Senate

The Statutory Definition of Charity Bill passed through the Senate on Thursday night which means the Not for Profit sector now has a single statute which clearly defines what is and isn’t charity, breaking away from the previous 400-year-old definition.

The Bill was passed with the support of the Greens and key independents who voted in favour of the legislation.

Senator Ursula Stephens said the Bill would allow for better use of time and less red tape for the sector.

“The consequent savings in time, energy, and other resources will be enormous,” she said.
“The flow on reductions in red tape, duplication and compliance costs will translate into better services for the community.”

The Australian Council of Social Service Deputy CEO Dr Tessa Boyd-Caine welcomed the support of the Government and the Greens in the enshrining of the definition of charity in statute.

“Clarity in the definition of charity and its consequent regulation is vital for the effectiveness of the over 57,000 registered charities in Australia and ACOSS has long called for a definition to be legislated,” she said.

“While the community’s notions of what is charitable have changed significantly in that time, the taxation structures that show society’s support for charitable work have struggled to keep pace with this change.

“While this reform does not broaden the access to tax concessions that leave many charities still struggling, it is a critical first step.

“It is the latest piece of an important reform agenda to ensure that our charities and Not for Profit organisations are given the support they need to provide effective support in turn for the millions of Australians who rely upon them.”

Changemakers Australia Grantmaking Development Manager Esther Abram said she was pleased to see the Bill passed as it was a ‘key reform promise’ of the Federal Government.

“Replacing out-of-date case law with a single statute has enormous benefits including greater certainty, reduced red tape and costs and a stronger framework to encourage philanthropic and individual giving,” she said.

“A key benefit of the legislation is that charities can advance their missions through advocacy, without risking their charitable status.

“The Bill is faithful to the Australian High Court decision on Aid/Watch v Tax Commissioner and will guide the advocacy activities of Australian charities.”

A Statutory definition of charity was recommended by an independent inquiry 12 years ago, with resounding support from the Not for Profit sector. The Charities Bill 2013 has taken two years to develop and has been the subject of extensive consultation.

The new Charities legislation will:
• Expand the current ‘four heads’ of charity to 12, explicitly codifying some important charitable purposes in their own right such as ‘advancing the natural environment’ and ‘promoting or protecting human rights’;
• Integrate the 2010 High Court of Australia decision on Aid/Watch v Tax Commissioner, clearly articulating a role for charities and foundations in promoting informed policy debates and advancing civil society in Australia;
• Resolve a number of anomalies which stymied particular charities such as the definition of disaster relief which has been expanded to enable charities to go beyond the relief of individual distress after a disaster, by including rebuilding, repairing or securing Not for Profit community assets after a disaster. 

The ACNC Governance Standards were also passed yesterday after the disallowance motion was defeated in the Senate.

It will come into effect on July 1, 2013 while the Statutory Definition of Charity will come into effect on January 1, 2014.