On 7 July 2021 the Australian Charities and Not-for-profits Commission (ACNC) announced changes to the requirements around the disclosure of political and electoral expenditure for registered charities.
These changes, which are reflected in the Australian Charities and Not-for-profits Commission Regulation 2013 (Cth) (ACNC Regulation), will require the ACNC Commissioner to publish and maintain information on the ACNC’s public Charity Register about where to find details of electoral expenditure and political donations of registered charities.
While these changes will not have an effect on what registered charities are required to report to the ACNC, from 30 July 2021, if a charity has reported expenditure to the Australian Electoral Commission (AEC) which is published on the AEC’s Transparency Register, the ACNC will be required to publish links on the Charity Register to where the details of that expenditure can be found.
In light of these changes and the upcoming election year, this article looks at the key things charities should keep in mind when considering whether to undertake political activities.
Can charities partake in political activities?
While some charities may engage in political activities (such as by advocating for a change in law or public policy), charities cannot have a purpose of promoting or opposing a particular political party or candidate. Activities that are likely to lead to a determination that a charity has a purpose of promoting or opposing a particular party or candidate, and therefore activities that charities should not undertake, include:
- delivering how-to-vote cards for a particular candidate or party;
- donating money to a particular candidate or political party’s campaign; and
- attending fundraising events for a political party or candidate.
Charities can however undertake ‘advocacy activities’ in furtherance of their charitable purpose(s). That is, advocacy activities which are aimed at securing, supporting or opposing a change to law, policy or practice which is consistent with that organisation’s charitable purpose is permissible (as opposed to securing or opposing a political party or candidate). This means that whilst a charity can advocate for a particular policy or law, it cannot advocate for the particular party or candidate that supports that policy or law.
Advocacy activities can include:
- encouraging public debate about or requesting explanation of current or proposed laws, government policies or practices;
- making submissions or giving evidence in relation to existing or proposed laws, government policies or practices;
- developing and publishing research on current or proposed laws, government policies or practices;
- collating and publishing information on, analysing, or comparing party policies as they relate to a charity’s purpose(s);
- directly promoting the charity’s purpose, or the interests of their beneficiaries, to elected representatives and public officials; and
- hosting, promoting or participating in public debates on law or policy matters.
An example of an acceptable political activity would be a charity with a purpose of advancing the environment using its website to publicise its preferred policy on renewable energy. However, if that same charity also asked its supporters to vote for a political party that supported its preferred renewable energy policy, the ACNC may determine it has a disqualifying purpose of promoting or opposing a particular political party or candidate and could deregister the organisation as a charity.
Not all situations are clear cut and charities should think carefully about their purpose, how the activity will advance its purpose and whether the activity will (or could be perceived as) promoting or opposing a particular political party or candidate before engaging in political activities.
Can representatives from charities attend political events?
Sometimes charities will be invited by political parties or political candidates to attend events, such as a gala or rally. Before representatives from a charity attend such an event, the ACNC’s Guide on Political Campaigning and Advocacy by Registered Charities recommends the charity’s representatives and responsible persons consider the following questions:
- What is the reason or purpose for attending the event? Would attending the event further the charity’s charitable purposes?
- Are the people attending in their own personal capacity or as representatives of the charity? Where the charity is funding the attendance fee, the latter will be assumed.
- How will attendance be perceived by the public? Is there a risk by attending the event, the public may infer that the charity is partisan and therefore has a purpose of promoting a particular party or candidate?
- Is attending such events in the best interests of the charity?
- Is the event raising funds for the political party or a candidate for office? If this is not clear, further enquiries should be made about the nature of the event.
While a one off attendance at an event may not demonstrate a disqualifying purpose of promoting or opposing a particular political party or candidate, the considerations around any decision to do so should be documented to evidence that the activity is an appropriate action for the charity in pursuing its purpose, through advocating for a particular policy or law.
What information will be published on the ACNC register?
For all organisations, including charities, expenditure on political advocacy can enliven disclosure requirements under the Electoral Act (1918) (Cth) (Electoral Act).
Under the Electoral Act, where an individual or organisation (who is not a political entity or politician) incurs federal electoral expenditure of more than the disclosure threshold of $14,500, it must disclose details about such electoral expenditure to the AEC, which then may be published on the AEC’s Transparency Register.
If a charity has reported electoral expenditure to the AEC which is published on the AEC’s Transparency Register, the ACNC will be required to publish links on the Charity Register to where the details of that expenditure can be found.
Electoral expenditure is defined as “expenditure incurred for the dominant purpose of creating or communicating electoral matter.” Electoral matter is matter communicated or intended to be communicated for the dominant purpose of influencing the way electors vote in a federal election.
Charities engaged in local government or state or territory based elections should also be mindful of applicable regulations and reporting regimes of the respective state or territory electoral commission.
Given charities risk having a disqualifying purpose if they promote or oppose a particular political party or candidate, charities should seek legal advice before making any electoral expenditure to help ensure that doing so will not jeopardise their charity status.
Importantly, communications that have the dominant purpose of educating their audience, raising awareness of, or encouraging debate on a public policy issue are unlikely to be considered electoral matter. Therefore, any money spent on such communications would unlikely be considered electoral expenditure.
For more information about charities and political activities see:
- the ACNC Guide on Political Campaigning and Advocacy by Registered Charities;
- the ACNC Podcast, Can Charities Get Involved in Advocacy?; and
- the AEC, Charities Electoral Expenditure and Disclosure.
How we can help
For more information regarding your charitable purpose and political activities, please get in touch with our specialist Charities + Social Sector lawyers.