Change Makers

Changemakers takes action

After releasing the Freedom to Speak – Capacity to Act report in April 2011, Changemakers has been working to progress the recommendations in the report.

This includes:

Responding to Australian Tax Office consultations, resulting from the Aid/Watch decision. Changemakers welcomed the draft Charities Tax Ruling, but made recommendations to improve clarity for charities around advocacy issues. The final Charities Tax Ruling is expected to be released in mid October.

Advocating for the ATO to review the Tax Ruling which applies to Public Benevolent Institutions (PBIs). These charities face higher levels of restriction on their advocacy as they are required to ensure advocacy is minimal in relation to direct relief work.

Commencing work on a campaign to advocate for the extension of Deductible Gift Recipient status to all charitable institutions, to provide access for advocacy organisations to philanthropic funds. We are currently undertaking desktop research on fundraising and tax concession issues. Later in 2011 we will run a forum to plan a collaborative campaign.

Background of the Charity Law Reform project

The Charity Law Reform project emerged out of Changemakers’ concern that not for profit organisations must have the capacity to pursue public policy reform, if they are to effectively address the underlying causes of social ills.

However, charities have faced legal restrictions on their advocacy and the tax concession framework is biased against many advocacy-focused organisations. There has been much at stake for charities which rely upon tax concessions to support their work, yet also see the need to undertake or fund advocacy for public policy reform.

In mid 2010, Changemakers commenced research into the way charity law restricts the doing and funding of advocacy and reforms needed to improve the situation. The project has been supported by the Victorian Legal Services Board.

Through interviews with people from a mix of community based organisations, philanthropic organisations and legal / sector experts, the project has highlighted the impacts of charity law upon the charities, both “doing” charities and “funding” charities. It analyses the impacts the High Court decision on Aid/Watch v Tax Commissioner 2010 has on the law and makes recommendations to remove barriers.

What did the Aid/Watch decision do?

In December 2010 the High Court brought down its decision in the Aid/Watch v Commissioner of Taxation case. The High Court found in Aid/Watch’s favour, but most importantly made a decision which overturns the conventional legal view that “political” activity is not charitable.
Changemakers would expect that the new Tax Ruling would include the following provisions:

• Charities with public policy reform objects to be eligible for Tax Concession Charity status;
• Existing charities to be able to further their charitable objects through advocacy, with no common law restrictions;
• Philanthropic organisations to be able to fund advocacy which is consistent with their Trust deed and the funded charity’s charitable purposes.
In addition, charity status may be extended to “watch dog” organisations which seek to benefit the community through monitoring government activities and generating lawful debate.

Modernisation of the charity sector

The Gillard Government is reforming the not for profit sector, commencing with the establishment of the Australian Charities and Not for Profit Commission and a statutory definition of charity. Changemakers welcomes these initiatives and will work to ensure their implementation does not result in advocacy restrictions.

This detailed statement of the CmA position on the reforms that are needed was prepared in 2010 and is available by clicking the link below.