‘Charity’ has a technical legal meaning. When we decide whether to register an organisation as a charity, we apply the law taking relevant legislation into account.
Charities Act – the statutory definition of charity
The Commonwealth Parliament passed the Charities Act 2013 (Cth) (the Charities Act) and the Charities (Consequential Amendments and Transitional Provisions) Act 2013 (Cth) (the Charities Consequential and Transitional Act) on 27 June and they came into effect on 1 January 2014. The Charities Act clearly sets out the legal meaning of charity. The ACNC must apply this law.
The Charities Act restates the existing (judge-made) law in modern language and also recognises charitable purposes such as the protection of human rights, the promotion of reconciliation and tolerance, and by recognising that many modern charities advance causes by preventing, educating, researching and raising awareness. The Charities Consequential and Transitional Act supports us to administer the Charities Act. For example, it contains a table that sets out how the previous table of ACNC charity subtypes match up with the new list of charity subtypes.
Find out more in the Charities Act, the Charities Consequential and Transitional Act and the Explanatory Memorandum, and the background to the Act.
The Charities Act clarifies that to be a recognised as a charity, an organisation must:
- be not-for-profit
- have only charitable purposes that are for the public benefit
- not have a disqualifying purpose
- not be an individual, a political party or a government entity.
The Charities Act confirms that an organisation must only have charitable purposes. It can have other purposes, but these must only be incidental or ancillary purposes that further or assist the charitable purpose or purposes. Read more about charitable purposes and charity subtypes.
The Charities Act does not change the meaning of public benefit. The definition maintains that certain purposes (for example, advancing education or religion, relieving poverty) are, in the absence of evidence to the contrary, for the public benefit. The Charities Act doesn't change the way the ACNC determines public benefit in other cases. Read more about public benefit.
ACNC Commissioner Interpretation Statements
These set out the approach we take to interpreting the law relating to our role of registering and regulating charities.
Previous tax rulings on charitable status
The Australian Taxation Office (ATO) produced tax rulings on charitable status which set out the ATO Commissioner's opinion about the way the tax law will be interpreted and applied. Taxation Ruling (TR) 2011/4 sets out how the ATO interprets the meaning of charity. This and other ATO rulings are not binding on the ACNC. However, we will have regard to what was previously considered by the ATO to be a charity, including what is set out in taxation rulings.