Snapshot on the new Charities Act 2013 (Cth)

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On 28 June 2013, the Government announced that the long-awaited Charities Act 2013 (Cth) had been passed, and is set to commence on 1 January 2014.

The concepts and definitions relating to Charities and the not for profit sector have been developed by the Courts over the past 400 years. The aim of the federal parliament was to condense this complex and longstanding area of law into a single statute, the Charities Act.

Some of the key aspects of the Charities Act 2013 (Cth) are as follows:

  1. To be a Charity, an organisation must be a not for profit entity with a charitable purpose that is for public benefit.  The purpose of the entity must be for all purposes charitable, not an incidental or ancillary purpose.
  2. A charitable purpose includes a purpose that is for:
    • the advancement of health, education, social or public welfare, religion, culture, the security or safety of Australia or the Australian public, or the natural environment;
    • the promotion of reconciliation, mutual respect and tolerance between groups of individuals that are in Australia;
    • promotion and protection of human rights;
    • prevention or relief of the suffering of animals;
    • any other purpose beneficial to the general public that may reasonably be regarded as analogous to, or within the spirit of, the above purposes;
    • promoting or opposing a change to any matter established by law, policy or practice in the Commonwealth, a State, a Territory or another country, in furtherance or protection of one or more of the above purposes.
  3. A charitable purpose for public benefit is for:
    • The purpose of preventing and relieving sickness, diseased or human suffering;
    • The purpose of advancing education;
    • The purpose of relieving the poverty, distress or disadvantage of individuals or families;
    • The purpose of caring for and supporting the aged or individuals with disabilities;
    • The purpose of advancing religion.
  4. A purpose which is not a charitable purpose, and will disqualify an organisation from being a charity is when:
    • the purpose of the organisation is for engaging in, or promoting, activities which are unlawful or contrary to public policy.  In this context, Public policy means matters such as the rule of law, and our system of government.  It does not refer to government policies;
    • the purpose of the organisation is for promoting or opposing a political party or candidate.

Although this area of law has now been placed into a single statute, it does not prevent this body of law from developing further. The Charities Act 2013 (Cth) has been legislated to introduce consistency and framework to the charitable principles. The common law from this area will still be employed to interpret and build upon this legislation.

If you are thinking of establishing a charitable organisation, and would like advice in relation to your charitable structure or the purpose of your organisation, do not hesitate to contact me.

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