Charity Inquiry - Who Will Benefit?

As a ‘small avalanche’ of submissions from both Not for Profits and business groups are being considered by the Federal Government’s Inquiry into the Definition of Charities, questions are being asked about just who will benefit from the outcome!

Media reports in recent days suggest that the ‘charities’ may be the losers.

The financial pages of the daily newspapers have reported how cereal manufacturer Kellogg’s has in its submission criticised competitor Sanitarium, which is owned by the Seventh Day Adventists, suggesting that charities should not have any tax privileges.

ABC Radio National featured a discussion on whether the Inquiry was being hijacked by business, and instead of protecting churches and charities, the concern is that the inquiry may result in legislation that may ultimately disadvantage the Not for Profit sector.

An edition of the ABC’s Religion Report interviewed the Executive Director of Catholic Health Australia, Francis Sullivan over his concern that the Inquiry could spell disaster for the provision of Church-funded health care.

Sullivan told the ABC that the Federal Treasurer is looking at administrative reform of the charitable sector, so once they decide on what will and won’t be a charity, then there will be certain administrative applications to that.

He says we don’t need to go down the path of a legislative outcome, because Acts of Parliament become too restrictive, they don’t give the community enough flexibility to grant the charitable status that will be required as things change.

Charitable organisations are currently determined by their purpose.

Francis Sullivan told ABC radio that a purpose-based definition goes to the heart of the issue of charity, and charity is caritas, it is about the goodwill and intention between fellow human beings.

He says a charitable organisation is simply a way of organising that, and therefore to shift to an activity base would be to diminish the whole meaning of charity, the whole intent.

Sullivan used the example of investor-owned hospitals versus church hospitals and the claims that they both supply hospital services so why should one be considered charitable?

He told ABC radio that if you take a purely commercial investor-first attitude, you will not run services that provide low-return or no-return. However, Catholic private hospitals and other church based hospitals can’t take that position. They have to carry services that give little or no return, because that is something local communities need as part of their social fabric.

In the Catholic Churches submission to the Inquiry it says it supports the Common Law approach to charity that expresses human generosity and creativity, in a non-prescriptive manner.

The submission says that the Church favours neither legislation to establish a broader definition of ‘charitable organisation”, nor the establishment of a Charities Commission similar to the one now operating in the United Kingdom.

However, in its recommendations it suggests the Government establish a specialist advisory body, that draws upon experts within the community to make recommendations about charitable status. As well policy makers should develop a broader interpretation of what constitutes a ‘charitable purpose’ and the Australian Tax Office be directed to adopt this.

It concludes that using legislation to bring about this end would be unnecessary and probably counter productive.

The Inquiry is continuing. If you have any comments to add on this latest debate on the Inquiry, please join the discussion on our Forum page.