Could the Charities Act 2013 Pose a Problem for Advocacy Charities?

Krystian Seibert raises concerns about an aspect of the Charities Act that could have major implications for how the act can be used to challenge charities which have advocacy as a purpose.

The Australian government has agreed to a recommendation by the Religious Freedom Review that section 11 of the Charities Act 2013 (Charities Act) should be amended to clarify that advocacy of a “traditional” view of marriage would not, of itself, amount to a “disqualifying purpose”.

Although the review did not believe that charities which advocate for a traditional view of marriage were likely to be at risk of losing their charitable status, it recommended the amendment to put the issue beyond doubt.

The concern of some religious charities which led to the recommendation is driven by the Family First decision in New Zealand, where an advocacy group opposed to same-sex marriage was denied charitable status partly because its views may be inconsistent with human rights law.

As the review pointed out, the law in Australia is different and so a similar outcome here is unlikely.

For this reason, I don’t think that legislative change is necessary, and it is also likely to be controversial.

That said, I also don’t believe that a very minor amendment to the Charities Act is particularly problematic.

Rather than making an exception to section 11 of the act specifically in relation to advocacy for a “traditional” view of marriage, instead a new “example” or “note” should be added to the section.

Examples and notes are used in legislation to illustrate how a particular provision operates, and are binding. The relevant section, extracted below, already includes some examples and notes, so adding one more shouldn’t be a big issue.

In reviewing the Charities Act over the last few days, I’ve actually become uncertain and concerned about another aspect of the act and how it relates to advocacy by charities more broadly.

I hope that I’m wrong about this (and I don’t often hope to be wrong about something!), but if I’m right then it could have major implications for how the act can be used to challenge charities which have advocacy as a purpose.

In the Family First decision in New Zealand, one of the key reasons it was denied charitable status was because of the way charity law in New Zealand treats advocacy.

Following the Greenpeace decision there, the regulator and the courts need to assess what the charity is advocating for, and make a decision about whether it’s good or bad and if on balance it is for the public benefit.

In both the Family First and Greenpeace cases, the decision has been that the organisations can’t show that what they’re advocating for is for the public benefit. They have therefore been denied charitable status.

The New Zealand position is complex, highly subjective and therefore unworkable in my view.

It’s generally agreed that the law in Australia has taken a different approach.

In the Aid/Watch decision, our High Court held that if a charity has an advocacy purpose and undertakes advocacy in furtherance of another recognised charitable purpose, then the advocacy purpose can itself be charitable.

Our approach differs to that of New Zealand because our High Court held that you don’t need to consider whether what is being advocated for is for the public benefit – meaning that you don’t need to weigh up the possible benefits and detriments from what is being advocated and work out whether on balance there is a net public benefit. Rather, the public benefit is derived from the fact that the generation of public debate about important issues is itself beneficial in a democracy.

Until very recently, I thought that this was codified in the Charities Act, which lists advocacy as charitable purpose in subsection 12 (l), extracted below.

However, section six of the Charities Act still requires any purpose (including an advocacy purpose) to be for the public benefit.

Extracted below, the section involves the balancing of benefits and detriments from the purpose. It would appear that this requirement is inconsistent with the Aid/Watch decision, and that our law may actually not be that different to that of New Zealand.

My reading of section six of the Charities Act is that the Australian Charities and Not-for-profits Commission (ACNC) could adopt the following approach in the case of a hypothetical environmental charity that opposes coal mines in order to protect the environment by addressing climate change.

The ACNC could argue that it is compelled by section six to assess the public benefit derived from the charity’s advocacy. These benefits could be in the form of less carbon emissions if coal mines are not producing coal to burn for energy. But it would also need to assess any detriment. The ACNC could argue that the loss of coal mining jobs and other matters are a form of detriment.

The ACNC could decide that in its view, it’s not possible to determine with sufficient certainty that less carbon emissions from fewer coal mines is a benefit which exceeds the detriment from the loss of jobs because the coal mines aren’t operating. On that basis, it could argue that the purpose of the environmental charity isn’t for the public benefit, and hence that it’s not entitled to be registered as a charity.

This could have major implications not just for environmental charities, but any charities which have advocacy as one of their purposes. It could also include religious charities in a similar situation to Family First in New Zealand for example.

Now, I may be wrong. Perhaps the ACNC will issue a clarification to state that this is not how it views the operation of the Charities Act. But I do think this is an issue which would benefit from clarification, possibly through an amendment to section six of the Charities Act to make it clear that as per the Aid/Watch decision, no assessment is needed of the benefit and detriment of what is being advocated for when determining whether an advocacy purpose is charitable.

Because of the potential impacts of this, I think it’s much more important than the clarification proposed to section 11 of the Charities Act by the Religious Freedom Review.

About the author: Krystian Seibert is an industry fellow at the Centre for Social Impact at Swinburne University of Technology and has a strategic advisory role with Philanthropy Australia.