ACNC up for the fight on contested charity status ruling

ACNC Commissioner Sue Woodward said the regulator welcomed the chance to test the definition of the public benevolent institution (PBI) charity sub-category in the Federal Court.

She said a ruling would provide more clarity for charities and the regulator around the contentious topic.

The Administrative Appeals Tribunal (AAT) recently affirmed an ACNC decision to refuse PBI status – which allows registered charities to claim tax deductions for donations - to Equality Australia.

According to the ACNC website, a charity registered as a PBI can apply for a range of Commonwealth tax concessions, including:

• Income tax exemptions and franking credits;

• Goods and services tax concessions; and

• Fringe benefits tax rebates.

They may also be eligible to be endorsed as a deductible gift recipient (DGRs) by the Australian Taxation Office.

Equality Australia is currently registered as a charity under a different sub-type known as "advancing public debate' but is appealing the AAT ruling in the Federal Court on a date yet to be fixed.

Ms Woodward said defining PBI status was important to the sector.

"We welcome the opportunity for this issue to be tested in the Federal Court,” she said.

“As we raised in our submission to the Productivity Commission inquiry into Philanthropy, the term ‘Public Benevolent Institution’ is not defined in legislation and there remains an opportunity for clarification of the term.

“This is a challenge for charities applying for this subtype and the associated benefits, and for us as the regulator in deciding if a charity meets the description of a PBI.”

Ms Woodward said tax benefits and concessions assist charities in their fundraising efforts, but those benefits are not assigned to all types of charities.

“The appeal is an opportunity for further clarification of the law.”

Equality Australia appealed the original ACNC decision to the AAT which in a split decision, ruled in favour of the regulator on June 30.

At the heart of the dispute are questions around whether Equality Australia is entitled to be registered as a PBI organisation for the “relief of distress” and whether members of the LGBTIQ+ community are persons in need of “benevolence.”

The ACNC argued in the AAT that the activities of Equality Australia were conducted to achieve changes to laws and government policies that apply to all LGBTQIA+ people.

The regulator said this does not constitute the direct and immediate relief to people suffering poverty, sickness, destitution, helplessness, misfortune, or distress which is required for an entity to be a PBI.

The ACNC also believed that Equality Australia’s political advocacy and lobbying activities disqualified it from being a PBI.

More information

Federal court stoush looms over charity status