To be recognised as a charity in Australia, an entity must have all of its purposes as charitable purposes for the public benefit. The Charities Act 2013 (Cth) (Charities Act) provides for twelve charitable purposes, including the purpose of ‘advancing religion’.
What is the charitable purpose of ‘advancing religion’?
While the term ‘advancing’ is defined under the Charities Act to include protecting, maintaining, supporting, researching and improving a purpose, the term “religion” is not. The High Court in Church of the New Faith v Commissioner for Pay-roll Tax (Vic) provides a useful construction of advancing religion to include two key requirements, namely the “belief in a supernatural Being, Thing or Principle; and second, the acceptance of canons of conduct in order to give effect to that belief”.
In the same case the Court added three further characteristics of a religion, being:
- its “ideas relate to man’s nature and place in the universe and his relation to things supernatural”;
- its adherents “constitute an identifiable group or identifiable groups”; and
- “the adherents themselves see the collection of ideas and/or practices as constituting a religion”.
What kinds of activities does a charity pursuing this subtype undertake?
The Explanatory Memorandum for the Charities Bill 2013 (Cth) states advancing religion involves “the promotion of spiritual teaching and the observances that act to promote and manifest it.” In order for this to be charitable, the purpose “must be directly and immediately religious and involve ways of advancing religion, including providing and maintaining facilities for worship; supporting religious clergy; missionary bodies; and religious associations.”
The Australian Charities and Not-for-profits Commission (ACNC) provides the following examples of charities which advance religion:
- religious congregations;
- religious education bodies; and
- funds for establishing and maintaining religious buildings.
It is insufficient if a purpose arises out of or has a connection with a faith, church or denomination. If the purpose is not immediately or directly religious, it is not charitable. For example, social or recreational activities are not charitable even if membership for these entities are limited to followers of a particular religion.
Furthermore, a purpose conveyed as advancing religion must not be used as a way to promote or express aims or opinions which are not charitable and would not be for charitable purposes if conveyed by a non-religious organisation.
In the absence of evidence to the contrary, the purpose of advancing religion is presumed to be undertaken for the public benefit.
What are the additional considerations for charities registering under this subtype?
Irrespective of an entity’s subtype, any not-for-profit wishing to register as a charity must meet certain requirements. As codified under the Charities Act, to meet the definition of a charity an entity must:
- be not-for-profit;
- have all of its purposes as charitable purposes for the public benefit (or any non-charitable purposes are incidental or ancillary to, and in aid of its charitable purpose(s));
- not have a disqualifying purpose (i.e. engaging in or promoting activities which are unlawful or against public policy, or promoting or opposing a political party or a candidate for political office); and
- not be an individual, political party or a government entity.
What is a basic religious charity?
A basic religious charity is a type of charity registered with the ACNC, which has the charitable purpose of advancing religion and meets certain other specific criteria. Please note: not all charities under the subtype of advancing religion will be considered a basic religious charity. A basic religious charity must satisfy the following requirements:
- Charity subtype: A basic religious charity must only be registered with the charity subtype of 'advancing religion'. If a charity is registered, or is eligible to be registered, with an additional charity subtype, i.e. it has more than one purpose, it is not a basic religious charity.
- Incorporated under certain legislation: A charity cannot be a basic religious charity if it is registered under certain laws, being the:
- Corporations Act 2001 (Cth);
- Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth);
- Companies Act 1985 (Norfolk Island); and
- or any state and territory incorporated associations legislation.
Note: If the entity is a charitable trust, having a trustee registered under the Corporations Act 2001 (Cth) (for example) does not prevent the entity (as a trust) from being a basic religious charity.
In practical terms, this generally means a basic religious charity must be unincorporated.
- Reporting to the ACNC as part of a group: If a charity has received approval from the ACNC to report as part of a group for a particular reporting period, it is not a basic religious charity for that reporting period. That is, if it is part of an ACNC reporting group for the relevant period it will not be a basic religious charity.
- Deductible gift recipient (DGR) endorsement: If a charity, as a whole, is endorsed as a DGR, it is not a basic religious charity. However, if the charity is endorsed as a DGR in part for certain funds, institutions or authorities that it operates (e.g. a scholarship fund for completion of an approved Australian course in theology or a public fund for religious instruction in government schools), it may be a basic religious charity. In this situation, the charity can only be a basic religious charity if the total revenue from all of these funds, institutions and authorities is less than $250,000 for the particular reporting period.
- Government grants: If a charity receives more than $100,000 in government grants in the reporting period or in the previous two reporting periods, it is not a basic religious charity. This figure includes all Commonwealth, state, or territory government grants.
- Participation in the National Redress Scheme: From 17 March 2021, a charity identified as being involved in the abuse of a person, either:
- in an application for redress under section 19 of the National Redress Scheme for Institutional Child Sexual Abuse Act 2018 (Cth) (Redress Act); or
- in response to a request for information from the National Redress Scheme Operator (Secretary of the Department of Social Services) under section 24 or 25 of the Redress Act,
cannot be a basic religious charity if:
- it has failed to join the National Redress Scheme for Institutional Child Sexual Abuse (Redress Scheme) by not being a ‘participating non-government institution’ within 6 months of the application being made or the response to the request for information was given; and
- the application for redress relating to it has not been withdrawn under section 22 of the Redress Act.
A basic religious charity has different obligations to other charities registered with the ACNC. In particular, a basic religious charity does not have to provide financial information in its Annual Information Statement, submit annual reports or comply with the ACNC Governance Standards under the Australian Charities and Not-for-profits Commission Regulation 2013 (Cth) (the ACNC Regulations). In addition, the ACNC does not have the power to suspend or remove a member of a basic religious charity’s governing body. Basic religious charities must still meet all other ongoing obligations to the ACNC, including submission of an Annual Information Statement (in relation to activities and operations), compliance with the ACNC External Conduct Standards under the ACNC Regulations (if operating or sending money overseas) and notifying the ACNC of changes to certain details.
How can we help?
If you would like to establish a charity with a purpose of advancing religion, if you would like to amend the subtype for your existing charity or otherwise review your current compliance, please get in touch with our specialist Charities + Social Sector lawyers.