In Australia, for an organization to be recognized as a charity, it must be registered as a charity with the Australian Charities and Not-for-profits Commission (ACNC). All charities must be registered under one or more charity subtypes, which reflect the purposes of a charity.
Charity subtypes are categories that reflect the 12 charitable purposes Charities Act 2013 (Cth) (Charities Act). In this article, we explore the charitable purpose of “Promoting social or public welfare”.
What are the requirements for registration as a charity under the “promotion of social or public welfare” subtype?
The Charities Act sets out the eligibility criteria for an organization to apply to become a charity, including that it:
- must be a non-profit organization;
- may only have charitable purposes in the public interest (or any non-charitable purpose incidental or incidental to its charitable purposes);
- cannot be an individual, political party or government entity; and
- may not pursue any disqualifying purpose.
Disqualifying purposes include participating in or promoting activities that are illegal or contrary to public order, or promoting or opposing a political party or candidate for political office.
Once registered with ACNC, a charity will be included in the public register of charities. The Charities Registry includes various information about registered charities, including their subtype(s).
What is the charitable purpose of “Promoting social or public welfare”?
The purpose of a charity is the reason for its existence, that is, its objective or “why”. All charities must demonstrate how their activities will serve their purposes. A charity can have more than one purpose. In fact, the ACNC reports that approximately 30% of charities are registered with more than one subtype, demonstrating the complexity and often intersecting nature of the social, economic and environmental issues that charities address. to answer.
Upon receipt of an application for charitable registration or sub-type review, ACNC will determine an organization’s purpose by considering a range of sources, including its constitution, activities, its website, its business or strategic plans and even its social media platforms.
The charitable purpose of “promoting social or public welfare” is a broad category, which includes purposes historically recognized under charity and the common law, such as the relief of poverty, the support of disabled and alleviating the needs of the elderly.
Without limiting what constitutes this objective, the Charities Act sets out examples of what may be considered the enhancement of the social or public welfare of the community. These include the purpose of:
- to relieve the poverty, distress or disadvantage of individuals or families;
- caring for and supporting the elderly;
- caring for and supporting people with disabilities;
- care for, support and protect children and young people; and
- help rebuild, repair or secure assets after a disaster.
The explanatory memorandum to the Charities Act (Explanatory memorandum) also provides additional examples, including:
- alleviate the disadvantages experienced by people with special needs, such as refugees;
- help and support disadvantaged people in the labor market;
- provide housing and accommodation support for people with special needs or who are otherwise particularly disadvantaged in terms of access to housing;
- overcoming disadvantages through international development, for example, overseas aid; and
- assist and support First Nations peoples, including advancing economic opportunity in disadvantaged communities, reducing the disadvantages experienced by First Nations peoples and improving their general well-being.
Here are some examples, provided by the ACNC, of charities registered in this sub-type: soup kitchens, residences for the aged, day care centres, night shelters for the homeless, service providers for the disabled and services for employment, respite care centers, social services, community and affordable housing providers and support groups for people living with specific disabilities.
According to the Australian Charities Report 8th Edition, which compiles data from charities’ annual reports over the 2020 reporting period, just over 3% of charities are registered under this subtype only, making them the third most common recorded subtype behind advancement in religion and advancement in education. .
What is meant by suffering in poverty in the context of the law of charity?
When an organization applies to be registered under the sub-type “Promote social or public welfare” through the alleviation of poverty, ACNC will consider whether the beneficiaries of the charity have a need attributable to their status. socio-economic or poverty, which cannot be alleviated on their own or they would find it difficult to relieve themselves. For example, people from a lower socio-economic background may have difficulty accessing housing and risk becoming homeless. A charity can alleviate this need by providing community and affordable housing.
The explanatory memorandum clarifies that the people the charity is trying to benefit need not necessarily be destitute or on the verge of destitution. However, they must lack the resources to obtain what is needed for a modest standard of living in the Australian community. Poverty can be alleviated by the provision of money, housing, legal or medical aid.
What types of activities does a charity pursuing this subtype undertake?
The activities a charity undertakes must support and further its charitable purposes.
Activities contemplated under the explanatory memorandum and by the ACNC that support the advancement or achievement of “improvement of social or public welfare include”:
- providing accommodation services for homeless people;
- provide food, clothing and other essential items to homeless people and others who cannot afford these items for themselves;
- management of international aid programs;
- providing activities for residents of residential care facilities to promote their physical and mental health;
- community services which provide food, home visits, home maintenance, social and recreational activities and shopping assistance for the elderly;
- provide funds for disadvantaged young people to be educated at an Australian primary school, secondary school or higher education institution, through scholarships and other means;
- work participation programs for refugees, the unemployed, or people with physical or mental disabilities, including training services and assistance with travel to and from work;
- raise funds to repair non-profit community buildings or other property damaged by a cyclone, bushfire or other disaster; and
- provide temporary accommodation, money and goods to people who have lost their homes due to bushfires or other disasters.
Are there any additional considerations for charities that fall under this subtype?
While this article does not go into the specifics of Deductible Grant Recipient (DGR) approval, overseas operations, or community disaster relief, there are additional considerations that certain types of organizations charities registered under this subtype may need to be considered.
Some charities registered under the “Promote social or public welfare” sub-type may be eligible for registration as a public charitable institution (PBI), a category approved by the DGR under the Australian Charitable and Not-for-Profit Commission (Cth) Act 2012 (ACNC Act) and Income Tax Assessment Act 1997 (Cth) (ITAA). For more information on DGR approval and eligibility for registration as a PBI, read our previous article, “Could your organization be approved as a deductible donation recipient?” “.
Where a charity operates an overseas aid program and operates or otherwise undertakes activities overseas, there are additional compliance obligations under the ACNC Act’s External Standards of Conduct. External standards of conduct aim to ensure that overseas operations reach intended beneficiaries and are used only for charitable purposes, while promoting transparency. For more information on these obligations, read our previous article, ‘Where in the world do you operate? Five Considerations for Charities Operating Abroad”.
Finally, the Charities Act includes a specific provision for the purpose of assisting in the reconstruction, repair or securing of assets after a disaster, in other words, community disaster relief. Importantly, this is recognized as different from disaster relief for individuals (which are also likely to be for charitable purposes registered under this subtype) or Australian disaster relief funds. The intent of this provision is to expand charitable purposes to include the restoration of nonprofit community assets after a disaster, independent of the relief of individual distress. This reflects the important role and contribution that nonprofit community assets hold in a community. Charities wishing to register and pursue this objective will need to meet additional criteria under the Charities Act regarding eligibility and the types of activities they may engage in.
