Statutory Definition of Charity

1. Statutory Definition of Charity Dr Joyce Chia, Not-for-Profit Project, Melbourne Law School Australian Charity Law Association 6 December 2011

2. Why the definition matters • Access to Commonwealth tax concessions • New regulatory requirements • Harmonisation of definition across States/Territories • Rationalisation of tax concessions in the long term? www.law.unimelb.edu.au

3. Key themes • Different ideas about what ‘is’ charity • Privileges and tax • Power • Flexibility, certainty and feasibility

4. Overview of debate • longstanding, but especially prominent since 2001 • public policy reports and academic commentary • engaged in UK & Ireland, NZ, Canada, South Africa • different reform proposals characteristic of different historical periods www.law.unimelb.edu.au

5. What’s wrong with the definition? www.law.unimelb.edu.au

6. Types of reform proposals www.law.unimelb.edu.au

7. Reform timeline • Statutory definition of charity debate: interactive timeline • Early proposals focused on contracting the definition • Middle part of 20th century focused on clarification and codification • From 1970s, shift towards ‘public benefit’ • After Sheppard Inquiry, shift to ‘enact and clarify’ www.law.unimelb.edu.au

8. Current context of reform • Australian Government NFP Reform agenda • Accountability and transparency agenda • ‘Finishing’ off earlier reform processes • Political context – fast and furious • On the reform agenda • statutory definition for 2013 • ACNC for July 2012 • Unrelated business income tax • ‘In Australia’ • PAFs and PAFs www.law.unimelb.edu.au

9. Guiding principles • Coherent contemporary vision of the sector • Principle of autonomy • Goal of facilitatation • Four aims of statutory definition to replace common law: • accessibility • clarification • modernisation • correction www.law.unimelb.edu.au

10. Charitable purposes What other purposes should be on this list? Are there any emerging issues in practice that the list should address? Are there any contested issues that are not addressed? www.law.unimelb.edu.au

11. Public benefit Are there other factors in determining ‘public’ that are relevant? Are there issues with the principles relating to ‘benefit’? Where do you stand on the issue of presumptions? www.law.unimelb.edu.au

12. Purposes/activities Can anyone come up with a better phrase than ‘charitable purposes only’? Would it be helpful to refer to common law principles regarding activities? Is there any advantage to having ‘disqualifying’ activities? www.law.unimelb.edu.au

13. Political and illegal purposes Options for dealing with political purposes? Should there be any reference to illegality or public policy? If so, is there any way to qualify this rule appropriately? www.law.unimelb.edu.au

14. Particular bodies Why should we exclude government bodies? Should there be a ‘control’ test? Are there practical examples of such bodies? Would peak and infrastructure/support bodies be adequately covered by the charitable purpose of promoting effectiveness/efficiency of charities? www.law.unimelb.edu.au

15. Other issues Should the definition of ‘charity’ be the same for all purposes? Are there examples of State/Territory legislation which would be broader than that proposed? Will a general education campaign help or hinder? Are there any other issues of transition? www.law.unimelb.edu.au

16. Useful resources http://tax.law.unimelb.edu.au/notforprofit (and Resources page) Defining Charity: A Literature Review (2011); Ann O’Connell, ‘Defining Charity—Where to from Here?’ Matthew Harding, ‘Distinguishing Government from Charity in Australian Law’; Matthew Harding, ‘Trusts for Religious Purposes and the Question of Public Benefit’. Source: Wikimedia (Cannedcat) www.law.unimelb.edu.au