Case citation: Global Citizen Ltd and Commissioner of the Australian Charities and Not-for-profits Commission [2021] AATA 3313
Recent cases concerning the type of charities considered to be PBIs (Public Benevolent Institutions) have shown that the term ‘benevolent’ is slowly being interpreted to have wider scope.
Background to case
Global Citizen Ltd v Commissioner of the Australian Charities and Not-for-Profits Commission [2021] AATA 331, heard in the Administrative Appeals Tribunal (AAT), involved GCL, a charity that engages in education, advocacy and securing commitments from the government and philanthropists to provide aid to international organizations that relieve poverty. Recently, they applied to change their charity sub-type from ‘advancing education’ to ‘PBI’ in order to become a Deductible Gift Recipient (DGR) and apply for grants from ancillary funds. However, the ACNC rejected this application on the basis that: to be a PBI, a charity must only have one main benevolent purpose, and GCL had independent purposes of their benevolent purpose; it must also provide benevolent relief, and GCL’s activities were too remote from the actual delivery of this relief.
What did the AAT rule?
However, the AAT ruled that GCL could be considered a PBI, satisfied that GCL had only one purpose – the relief of global poverty – and that it engaged in educational and advocacy activities to achieve that purpose. It added that even if these activities were in fact purposes, they were incidental to the main purpose of the relief of poverty.
AAT’s reasons for this ruling
To arrive at this decision, the AAT broadened the contemporary meaning of ‘benevolent.’ They considered a variety of cases concerning this and stated that a PBI did not need to provide relief directly. They also affirmed that relief efforts require collaboration between “a variety of entities working with governmental and other NGOs to achieve positive results, using advocacy and awareness-raising as an integral part of that process to achieve their goals”, i.e., a PBI may be part of a process of provision of relief carried out by several entities. The Tribunal stated that though a PBI may have other purposes, its benevolent purpose must be predominant. These interpretations may have implications for ACNC’s criteria for PBIs in the future, in that to identify as one, a charity may not need an exclusively benevolent purpose, although it is important that it be its main one.
The Tribunal also noted the difficulties of a PBI being involved in the political process. Though the engagement in this area is indispensable in a PBI’s day to day as governments are key players in delivering relief, the lines can become blurred between engagement to serve its main benevolent purpose, and engagement to pursue political outcomes for the PBI’s sake.
The interpretation of what a PBI is in today’s world is constantly evolving, and this case indicates a clearly progressive disposition towards defining the requirements to become a PBI.
Case Note:
Facts
- Global Citizen Limited (GCL) is a charity with the sub type of ‘advancing education’ registered with the ACNC, and operates as part of the Global Citizen Network
- Works in partnership with NGOs to secure commitments from Governments and philanthropists to give money to international aid organisations that have projects to relieve poverty
- GCL wanted to change its subtype to a PBI so it could qualify as a DGR and apply for grants from ancillary funds. A PBI is an institution that has benevolent relief as its main purpose, and that relief is provided to people in need.
- ACNC rejected this request. GCL took this matter to the Administrative Appeals Tribunal, and ACNC disputed whether GCL qualified as ‘benevolent’. Highlighted problems –
- 1 – purpose/s of GCL
- Relief of poverty was not GCL’s only purpose, as it had independent purposes of education and advocacy. ACNC Commissioner – ‘The ‘main purpose’ requirement means that any other purpose must be incidental or ancillary to the benevolent purpose.’ Therefore an independent non-incidental purpose would disqualify this org from being a PBI
- 2- link to the provision of aid.
- GCL does not provide relief directly, or through related entities, to those in need and this prevents it from being a PBI. Their work is too remote from the organizations that run projects actually providing relief.
- 1 – purpose/s of GCL
- GCL’s argument:
- 1 – their only purpose is the relief of poverty, meaning it can qualify to be a PBI
- 2 – Their activities directly provide aid orgs with the facilities to engage in poverty relief
- The AAT ruled that GCL could be considered a PBI. They were satisfied GCL had only one purpose – the relief of global poverty – and that it engaged in educational and advocacy activities to achieve that purpose. It added that even if education/advocacy were purposes, they were incidental to the main purpose of the relief of poverty.
Procedural history
- GCL applied to the ACNC to change its charitable subtype on 3 August 2018. The application was refused by the Commissioner on 6 September 2019. GCL objected to the original decision on 5 November 2019. The objection was disallowed by the Commissioner on 27 February 2020. The AAT’s decision was delivered on 17 September 2021 by Deputy President Bernard J McCabe and Professor Ann O’Connell, Senior Member.
Legal reasoning
- GCL’s purpose – The relief of poverty as GCL’s main purpose – ‘main’. Tribunal – The ordinary meaning of ‘main’ in relation to an object or purpose does not preclude an entity from having other objects or purposes, provided the benevolent purpose was predominant.
- GCL’s link to aid – The Tribunal agreed with the Full Federal Court in Commissioner of Taxation v The Hunger Project Australia [2014] FCAFC 69 that in the ordinary contemporary meaning or understanding of the term ‘benevolence’, a PBI did not need to provide relief directly. The contemporary context suggests relief efforts require collaboration between “a variety of entities working with governmental and other NGOs to achieve positive results, using advocacy and awareness-raising as an integral part of that process to achieve their goals” (p 118). The tribunal was satisfied it engaged in activities that provided money to organizations involved in direct delivery of poverty aid. Applied and rejected directness test drawn from the judgement of Street CJ in Australian Council of Social Services v Commissioner of Pay-roll Tax (1985) 1 NSWLR 567, citing the Full Federal Court in Commissioner of Taxation v The Hunger Project Australia [2014] FCAFC 69, and considered Australian Council for Overseas Aid v Federal Commissioner of Taxation (1980) 33 ACTR 496. They concluded a PBI may be part of a process of provision of relief carried out by several entities.
- Considered Australians for Indigenous Constitutional Recognition Ltd v Commissioner of the Australian Charities and Not-for-profits Commission – acknowledges possibilities that the less direct an institution’s activities are to the relief of poverty, the less likely the entity is to be regarded as a PBI. Didn’t apply here
- GCL showed evidence as to their activities and involvement with relief of poverty, such as is its own reports, endorsements from international organisations and government ministers.
- Involvement of political process in activities of PBI – most large PBIs engage with the political process as a regular of their work because governments are key players in delivering the relief that is sought – potential blurring of the distinction between a PBI that participates in the political process as part of its activities in providing benevolent relief and an entity that is pursuing political outcomes for their own sake
- Analysis of purposes of a PBI: The Tribunal explains that a PBI may have other purposes additional to its main benevolent purpose, and that it should not apply an ‘exclusivity of purpose’ test in relation to PBIs. This shows the ACNC Commissioner’s statement on PBI’s purposes and their incidental purposes which may require re-thinking with this ruling
